If Your Digital Strategy Avoids Humans, It’s Already Broken
By Jake Martin, President and Chief Operations Officer at Invo Solutions
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For more than a decade, community banks and credit unions have heard the same story: go digital or get left behind. The theory was simple and not altogether flawed. More technology would lead to better efficiency, better experiences, and better competitiveness against national and global banks. The stats are undeniable:
- 75% of consumers prefer managing their bank accounts through a mobile app or computer
- 85% of consumers prefer financial institutions with easy-to-use mobile apps
Yet despite the massive benefits of technology for customers and the millions of dollars financial institutions invest in platforms and technologies, many smaller banks and credit unions are still asking the same uncomfortable question: Why are we losing to the big banks?
The answer isn’t a lack of effort, but effectiveness. According to The Financial Brand’s Jim Marous, 51% of financial institutions say they’re going digital, but only 7% are getting the results they want. The problem isn’t that financial institutions are failing to adopt technology; it is that, in doing so, many remove the key aspect that makes community banks and credit unions different: people-centric service.
In a business built on trust, that is a fundamental miscalculation.
Need to Know:
- Many community banks and credit unions adopted digital tools to keep up with the industry, but failed to improve outcomes because technology replaced, rather than supported, human service.
- Customers want digital convenience for routine tasks, but they expect fast, knowledgeable human help when complexity arises.
- Community banks and credit unions should leverage their relational advantage by deploying high-tech solutions that empower employees and deliver high-touch service to customers at critical moments.
When More Technology Doesn’t Make Banking Better
There is no argument to be made that banks or credit unions would be better off without technology, nor is there an argument that consumers are desperate for the good ol’ days of banking. Consumers like that can handle most of their financial affairs from their couch or desktop.
However, most digital transformation efforts among financial institutions followed a similar, predictable path. Community banks and credit unions mapped the feature sets of larger banks, selected comparable tools, and implemented them as quickly as they could.
New systems are layered on top of old ones. Customers are pushed into self-service journeys that assume confidence and clarity that isn’t there yet. Employees are expected to support more channels and more tools.
The result? Deployed features that don’t have any meaningful impact.
Digital transformation has become something institutions do rather than something they achieve. Success was measured by launch dates and adoption percentages, not by whether consumers would be better served, and employees made it more efficient.
When technology is deployed for its own sake, it doesn’t improve customer experience.
Community Banks and Credit Unions Should Lean into Community
Large banks had a clear incentive to automate aggressively. With millions of customers and thin margins per relationship, removing human interaction at scale made economic sense. It was a no-brainer to deploy next-gen technology quickly and at scale.
Let’s be honest. Community banks and credit unions can’t operate in that way. In fact, they don’t have any incentive to operate in that way. But in many ways, that’s exactly what they’ve done. They rushed to deploy the same automated, self-service offerings as big banks, and in doing so, diluted their greatest advantage: accessibility to real people who know the customer and the community.
So, here is a question. Why are community banks and credit unions copying big banks, which offer a vastly different experience? Customers don’t gravitate towards banks and credit unions with better digital offerings because they like shinier things. They gravitate towards offerings that make their lives easier and better.
For community institutions, that means authenticity.
Modern Banking Still Needs Humans, Just Not the Old Way
This isn’t an argument against technology. It’s an argument against using technology in a cookie-cutter way. More often than not, that looks like removing the human element from the customer experience.
Customers don’t want to visit a branch for every need. They don’t want human interaction at every turn. But they do want reassurance, clarity, and responsiveness, especially when the situation is unfamiliar. And their frustration when they can’t find it is bigger than most financial institutions care to admit.
Did you know that over 60% of consumers report that their mobile banking app doesn’t provide quick, adequate customer service? How about better service being the top reason why consumers opened a new account at a different bank, to the tune of nearly 40% of new customers. Automated service is not enough.
So, the future of community banking isn’t high-touch or high-tech. It’s high-tech that enables high touch at the right moment.
That means:
- Allowing customers to move fluidly between digital and human support
- Giving employees full context when they engage, regardless of channel
- Designing digital experiences that anticipate when self-service stops being sufficient
The digital offerings financial institutions deploy offer the convenience consumers want but stop short of offering the service consumers ultimately need. Why? Financial institutions used technology, perhaps unintentionally, to silo the employee and customer experiences.
Instead of embarking on a digital transformation to make employees more efficient and improve customer service, financial institutions sacrificed one for the other. In other words, technology was deployed in place of employees; financial institutions didn’t have staffing shortages or to replace roles altogether.
But that methodology is a band-aid. Worse, it’s a band-aid that will hurt efficiency and customer satisfaction in the long run. Community banks and credit unions must see digital transformation as a gateway to better human interactions, not just a replacement. Technology must work for the employee and the customer. How does that look in real-time?
1. Technology Should Reduce Friction for Employees
Here is the inconvenient truth: customer experience rarely improves unless employee experience improves first.
Simply put, technology intended to replace employees will fail in the long run. Are there ways that technology can automate and make staffing more efficient? Of course. More often than not, however, removing human interactions in the name of efficiency makes staff less efficient.
Because eventually, that end-user is going to need their situation escalated to a real person. It is the handoff from digital to human that is causing so many technological gains to be lost.
70% of people are frustrated with a company before they even get on the phone with an agent. Those same 70% of customers expect the person they eventually reach on the phone to have a full understanding of their problem.
The “I need to talk to a person” moment is where digital transformation can crumble, if it doesn’t empower employees. When the employee and customer are not directly tied together, employees absorb the burden of what digital solutions can’t solve and often endure the customer’s ire on the other end of the line.
2. Technology Should Provide Tangible Value for Customers
From the customer’s perspective, it all comes down to value. Community banks and credit unions can copy what they see their more innovative competitors doing all day long, but if it doesn’t help their real-life customers, it won’t take root.
Most consumers are perfectly happy using digital tools for everyday banking. They value speed, convenience, and independence. But the moment they need something more, the data shows that they want immediate help, not just immediate response.
Technology isn’t the frontier anymore. Customers know when a response is automated and when it is from an actual employee. That isn’t what they want when they ask a question or need help.
And it’s time for community banks and credit unions to lean into that moment. It is why customers choose them over bigger competitors. If they wanted the shiny new thing, they would go find it.
The reality is that people still want people. They want their mobile banking app and easy access to their accounts, sure, but those are low-hanging fruit. When it comes to service, people want answers fast. And that’s what community banks and credit unions can provide. These institutions are uniquely positioned to deliver more personalized and authentic service.
Digital transformation for the sake of playing catch-up is doomed to fail. Use digital transformation to empower your staff and serve your customers. Be about people in 2026.
