Banks Must Leverage Their Data Strengths to Grow in 2023

Relationships are financial institutions' superpower. As they come to grips with the lasting transformational impact of fintechs, banks and credit unions should shift focus from transactions to interactions, playing up their strengths by using data to serve consumers, not sell services.

While the growth of fintechs is nothing new, the grace period for traditional financial institutions to come to terms with fintechs’ undeniable prowess is coming to an end. Inaction at this point could cost a bank or credit union its reputation and its future.

Instead of viewing fintechs solely as a threat, forward-looking financial institutions have accepted that fintechs rose from unmet consumer needs and have carved out their own place to more directly address those needs.

Financial institutions have a choice to make. Will they let fear of the unknown win, and throw in the towel? Will they let the industry evolve around them and simply hope for the best? Or will they embrace change, find opportunity in evolution and gain momentum towards a new and better future?

Most financial institutions that are thriving today have firmly aligned their strategy and resources behind careful and considerate evolution to stay true to their brand, while meeting the needs of today’s consumers. The rest have some decisions to make.

Lean Into the Changing Landscape to Power Growth

Many traditional financial institutions today are struggling with reconciling the “way they’ve always done things” with what has long been referred to as “the consumer of the future.” Unfortunately for these institutions, the future is here and now, and today’s consumers want something different and something more. But it’s not too late to flip the script and bring your financial institution from merely surviving to thriving.

How? By taking a deep dive into every “what” and “why” that makes their financial institution special and also by identifying the gaps. Evaluating the strengths and opportunities thoroughly is important here. But if we’ve learned anything from the way fintechs are revolutionizing the industry, it’s that consumers need and want financial institutions to offer more.

A Missed Opportunity:

Many financial institutions are sitting on a treasure trove of data that, when activated appropriately, can help target and maximize growth efforts.

For the opportunities, lean into the lessons fintechs have taught, and where possible, put your own spin on them. A tailored approach to a proven fintech formula allows banks and credit unions to maximize their biggest superpower: relationships. That is one component that a fintech simply can’t compete with.

While the banking industry has traditionally identified transactions as the key business driver, recent consumer preferences and best practices have shown us that relationships and brands are not built on transactions. This is a philosophical shift that will change the future of financial institutions. When a bank or credit union doubles down on serving consumers rather than selling services, they bring strengths to the table that fintechs can’t match.

Invest In a New Toolbox and Curate Its Contents Carefully

While there are go-to resources and approaches that will always hold value, it’s likely your institution’s capabilities need an upgrade. If serving rather than selling is a game changer for financial institutions, what if they took what is largely relational and backed it up with some new tech tools?

By leveraging technology to streamline operations, efficiencies are built that create space and time for staff to focus on relationship-building beyond the transaction. Ever wonder how your staff spend their time and what aspects of their work bring the most value to your consumers? Ask them!

In addition, consider these three questions:

  • What tasks are your team members doing now that are not directly consumer-facing that could be done more efficiently through an investment in new or even fintech-driven tools and technologies?
  • What functions of the transaction itself could be automated without compromising the human element?
  • Is there an investment to be made in software, platforms or web-based tools that empower staff to be more present and attentive when interacting with individuals in the branch?

We’ve seen many financial institutions find success in offering value-added technological support that doesn’t replace human contact, but creates space to make those interactions more valuable. Examples include incorporating artificial intelligence (AI) like chatbot functionality and machine learning that automatically learns insights and recognizes patterns to proactively present consumers with helpful resources based on their actions.

Great examples of the practicality of this technological evolution in practice are Coastal Credit Union and Eglin Federal Credit Union. Both institutions have added branches with only interactive teller machines (ITMs) to maximize consumer convenience.

Stop Guessing: Unlock the Power of Data

Many financial institutions are sitting on a treasure trove of data that, when activated appropriately, can help target and maximize growth efforts. With AI-powered data solutions, data works for you instead of sitting unused in a system collecting proverbial dust.

Data drives action, offering valuable insight into consumer behaviors, preferences and needs. Maximizing and mobilizing data starts when institutions stop guessing and start knowing. Begin by asking the right questions:

  • How can you achieve higher market value in the most efficient way?
  • How can you attract and meet the near-term and future needs of consumers without alienating customers who have put their trust in you for decades?
  • What questions do you have about consumer behaviors?
  • How can you turn data-driven insights about those behaviors into actionable intelligence to inform future initiatives?

Using Data to Meet Customer Preferences

Data powers the creation of target demographic profiles, which can be used to create dynamic content that resonates with your audience. Data solutions provide valuable insight into your customers’ behaviors, preferences and needs, allowing you to meet them exactly where they are and invite them on a unique journey you’ve crafted just for them.

Putting Your Resources to Good Use:

Data powers the creation of target demographic profiles, which can be used to create dynamic content that resonates with your audience.

We’ve seen organizations like Landmark Credit Union have great success by integrating intelligent sensors with their cash management systems, allowing financial institutions to obtain demographic information about people coming in and out of branches.

That information — like a person’s age and gender — is then mined through camera feeds installed in a digital display kiosk, allowing them to capture real-time feedback on consumer experiences and adapt to meet their evolving needs.

facial recognition allows capture of real time demographic and transaction satisfaction

Putting Data Into Action

Data fuels interactive brand experiences, which serve to educate, entertain and engage consumers. Informed by data, the creation of custom content placed in interactive displays and kiosks throughout the branch can offer something for everyone, including:

Opportunities to be playful: Entertain children and adults alike with fun, interactive games and experiences that bring your brand to life.

Give the opportunity to be playful and entertain kids and adults with fun games to build your brand

Showcase your story: Interactive walls showing local history and news invite visitors to be a part of a financial institution’s story and demonstrate its connection to the community.

Interactive news walls engage members in the history of the credit union and the community strengthening their relationship with your brand

Give a warm welcome: Welcome visitors and capture necessary information in a modern, interactive way with digital check-in stations.

Virginia-based C&F Bank is a great example of a financial institution that went all in on data to turn transactions into interactions. By prioritizing an intensive market study, C&F Bank was able to transform its branch network of over 30 locations, providing unique content deployments to serve different markets in rural and urban communities that each had substantial socioeconomic variances.

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