Digital Opens Door to Banking Growth and Opportunities

While digital technologies and the mobile consumer present challenges to financial institutions, some organizations have leveraged the power of digital to streamline processes, boost productivity and enhance the consumer experience.

Banks today face a myriad of threats and challenges, including increased regulatory burdens and competitive pressures from credit unions, disruptive peer-to-peer lending groups and other institutions. Yet, technology and changing customer behaviors and expectations – particularly the trend of increasing mobility – open the door to growth and opportunities.

Consider for a moment the following points:

  • In 1995, the typical banking customer visited the branch 2.21 times per month; but by 2012, those visits dropped significantly to just .26 times per month.
  • More than 90% of the U.S. adult population currently has a mobile phone and approximately 55% of Americans use their phone for mobile banking.
  • While it took almost 12 years for Internet banking to surpass branch banking in terms of number of visits, mobile banking has surpassed internet banking in less than seven years.
  • JPMorgan Chase & Co. recently marked a significant milestone when it became the first bank in the U.S. to report more than 20 million total active mobile users.

Mobility has entered every part of our lives from the professional to the personal, and the financial services industry is no exception.

Embracing Enterprise Mobility to Boost Productivity

Financial institutions must leverage mobile technology across the entire enterprise to empower employees and free them from their desks and branch-only interactions.

No longer is it sufficient to simply offer mobile banking. Instead, financial institutions must leverage mobile technology across the entire enterprise to empower employees and free them from their desks and branch-only interactions. Financial institutions that embrace mobility will boost productivity and operational efficiency across business channels and be able to serve customers where they live, work and play.

Imagine if your bank employees had the ability to open a deposit account while at a customer’s business, participate in a loan committee meeting while working from home, or approve a loan securely on their phone while traveling. It is this mobility that provides the means for operational agility and ongoing business value.

When you think of a company who has effectively embraced mobility, Uber, a six-year-old company now valued at roughly $40 billion, is likely the first that comes to mind. At its core, Uber is a taxi service, the likes of which have been around for millennia. However, what has differentiated Uber from other standard transportation companies and enabled its explosive growth is on-demand mobility – for customers in requesting a ride, for the drivers who provide the service, and for the back office employees who help manage it all.

This is exactly how banks need to be thinking. Every technology platform should be evaluated to determine its mobile capabilities. New systems purchased must be mobile optimized and provide the highest level of data security.

The number of systems banks have should be reduced so that employees managing a loan file are all working on the same virtual loan file with a single virtual document set regardless of the device and their location. Over time, this mobile technology model will also empower regulators to perform exams remotely and more efficiently, creating an even better relationship between the bank employee and regulatory examiner.

A recent study of small business owners by ath Power Consulting found that 93% of business customers would prefer a commercial loan process that used mobile technology and allowed them to interact directly with a lender without having to visit the branch. Two institutions serve as exceptional examples of banks that have successfully applied this mobile framework to their business lending processes.

Taking a Netflix Approach to Banking

“Banks need to integrate or bend their business models to the requirements of customers and that systems need to be able to connect to customers through mobile interactions.”

Univest Bank, a $2.2 billion institution based in Souderton, Penn., needed to find a way to deliver lending solutions with decreased opportunity costs, reduced risk and shorter loan cycle times. They looked to mobile-enabled technology to help solve the ‘riddle’ of small business banking. By providing small business owners with on-demand access to the products and services they wanted through a subscription-based model – akin to a Netflix for financial services – Univest was able to meet the needs of its customers while increasing profitability for the bank.

“Mobile solves the equation,” said Hugh Connelly, president of Univest Capital, a subsidiary of Univest Bank. “Now you have a credit committee in a button. It’s just, ‘click,’ and there’s the decision. Prior to this, it was hard to profitably and efficiently serve this market.”

Connelly acknowledges that today’s banks need to integrate or bend their business models to the requirements of customers and that systems need to be able to connect to customers through mobile interactions. Univest Bank has expedited its delivery mechanism by arming bankers in the field with iPads.

The combination of a cloud-based system with mobile devices, eSignature capabilities and instant issuance makes serving small businesses more cost effective for the bank and frictionless for the customer. Deploying a mobile strategy has enabled every part of the loan process to become more efficient; Univest’s loan approval rate is now in the mid-90 percentile. The bank has learned small businesses are not afraid to pay fees – they just want value for what they pay.

Mobile Banking Fuels a Nationwide Leader in Small Business Lending

Few banks have doubled in size over the past five years. Even fewer can achieve that growth while maintaining non-performing assets at just .4% of total assets and a 50% efficiency ratio.

The nation’s second largest U.S. Small Business Administration (SBA) lender, $723 million Live Oak Bank in Wilmington, N.C., has experienced significant growth in assets, loans, deposits and earnings during the last five years all through organic growth. To what then can Live Oak Bank attribute its success?

“Live Oak’s employees are able to present relevant products and services that customers need – at the time they need them, anywhere they need them.”

According to founder and CEO James (Chip) Mahan III, “We service our customers efficiently throughout the loan process and monitor their performance by means of a highly automated, cloud-based, mobile bank platform. We have leveraged this technology to optimize our loan origination process, reporting metrics, servicing activity and most importantly, customer experience.”

Live Oak Bank successfully built a sales pipeline and enhanced customer relations through a mobile-enabled bank operating system, equipping employees with secure technology across any device that provides an instant snapshot of its customers and their banking relationships. As a result, Live Oak’s employees are able to present relevant products and services that customers need – at the time they need them, anywhere they need them – while simultaneously bolstering the bank’s portfolio. This has allowed Live Oak Bank to build a customer portfolio in every state in the U.S. with only a single bank branch.

Enterprise mobility offers distinct value to both the bank employee and the customer. Customers can be provided with innovative communication channels and access to products and services while institutions can use enterprise mobility to reduce operating costs, increase productivity and create a highly efficient and collaborative work environment.

It is time for banking to occur where the people are: at home, in the office and online. Leveraging this model will supercharge customer engagement, enhance organizational effectiveness and give your bank a competitive advantage.


Jonathan Rowe_smJonathan Rowe, Ph.D., is director of research and marketing at nCino. He brings a unique combination of technology and academic experience to the team, having been a professor in the Cameron School of Business and the director of the Entrepreneurship Center at the University of North Carolina Wilmington prior to joining the company. Before his academic career, Rowe was a project manager at IBM Global Services for enterprise software integrations in the United States and Europe.

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