As people begin to travel to business meetings again, I have been able to catch up with hundreds of financial institution executives from across the country in multiple small and large settings. It is amazing to be able to meet face-to-face again, as opposed to simply being part of the slightly impersonal, and always hurried, Zoom call. After over a year of being sequestered to different degrees, the flow of thoughts and ideas, and the joyfulness of genuine interactions, is energizing.
During my travels, I have made it a mission to ask questions about what is going on in the industry. While this is part of what I do as the owner and CEO of the Digital Banking Report, getting perspectives as part of conversations greatly enhances what can be generated from a 15-25 question survey. While there were several similarities in some of the answers to my questions, there were also some surprises.
Here are some of the trends that I was able to hear from the people actually living the new realities of post-pandemic banking.
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1. Keeping Pace With Change Impacts Work Every Day
While it is not discussed much in trade publications and isn’t revealed in banking surveys, many bankers said that the experience of the pandemic has impacted the pace of work and highlighted the need to acquire new skills as others became obsolete. When the economy shut down, the response to new market realities required immediate attention. From supporting customers who needed to transact and engage entirely on digital devices, to learning new communication and team building skills, most bankers moved to ‘crisis mode’. Many are still working at that pace.
All bankers and credit union executives understand the components of digital banking transformation and are setting priorities based on performance gaps that need the most attention. The challenge is moving beyond the requirements of daily tasks to more strategic initiatives that are needed to better future-proof their organizations.
Unlike any time in the past, the feeling is that the marketplace is setting new expectations at a pace that many organizations aren’t organized to meet. One banker I met said, “I come to work every day with great ambitions around how I will move our organization forward, then the day starts and I am buried in tasks that need immediate attention.”
The good news is that many of the bankers I met believe that they are moving out of the crisis mode of the past 18 months. This has been achieved through the combination of very long hours, some work/home life imbalance, and the ability to leverage third-party solution providers to address immediate needs.
2. Flexibility and Ability are Essential
When the world shut down last March, nobody had a choice but to learn new ways to work and respond quickly to the needs of the marketplace. As we continue to navigate the new realities around us, it is clear that flexibility will not only impact success moving forward but is also essential for an organization’s survival.
The people I have met said that a ‘surprise’ seems to be around every corner and impacts every day. More importantly, the concept of ‘business as usual’ and the ‘way we have always done things’ are no longer applicable. Most organizations have changed the date of coming back to the office multiple times, and are working to rethink back office processes and operations that have been in place for decades.
At the same time, almost every organization is evaluating their branch delivery model and the way they meet the accelerated move to digital.
Proactive and progressive thinking, with a willingness to embrace change, are some of the most important traits of both leaders and organizations. One banker said, “It became clear over the past year that I had to learn new skills to be prepared for a future far different from the past. At the same time, our organization realized it had to train almost every employee for digital skills and new opportunities across the organization.”
3. Searching for Strong Third-Party Partnerships
Every banker I have spoken with over the past two months is looking for third-party solution providers that can help move them along the digital banking transformation continuum as fast as possible. From partners who can assist in building better new account opening and digital lending processes, to solution providers who can improve data and applied analytics maturity, banks and credit unions realize that the only way to meet the needs of more demanding customers is through collaboration with firms that specialize in the areas of need.
One banker said, “I am looking for a partner that doesn’t require daily hand-holding to achieve what we need done yesterday. I can’t hire three people to manage a partner. I need a firm that has the same vision as we do and is always working on my behalf.”
Another banker referenced the need to make changes quickly when she said, “I would rather select a partner I feel good about today than spend 18 months going through a long evaluation process that puts our credit union further behind our competitors.”
4. Back-Office Processes Are Being Rebuilt
Before the pandemic, most organizations were working on the user experience of branch, online and mobile engagements. In my discussions with bankers and credit union executives, it’s clear that the focus has shifted to rebuilding the internal processes and operations that support these engagements to improve speed, simplicity and customization.
A banker from the Midwest said, “We needed to start with a clean sheet of paper and rethink the way everything was done behind the scenes. Making manual processes digital was not acceptable. We needed to build leveraging automation, new technologies and a digital mindset.” He also added that the team assigned to the mission of rebuilding legacy processes needed to ‘let go’ of how they did things for decades.
5. Financial Success Has Resulted in Complacency
The common thinking is that positive financial results will have a correlated positive impact on investment in innovation, data and advanced analytics maturity, new technologies, and new hires. In my meetings there seems to be a consensus that the strong financial results of the past couple years has resulted in varying levels of complacency — especially at the highest levels of the organization.
At a time when a ‘challenger mindset’ is most needed, many legacy leadership teams — who have been in the same organization for more than 30 years — have little incentive to make aggressive investments that could move an organization beyond the mainstream. This is reflected in conversations I have had with solution providers.
One vendor said, “A bank I work with knows exactly what is needed to move their organization forward, and that we have the best solution for their firm. The challenge is having them actually invest in the solution. The top of the organization doesn’t feel any ‘pain’, so nothing is done.” There is almost universal agreement from the banking side of the equation, however, so most mid-level bank and credit union executives feel frustrated that initiatives that have been fully evaluated don’t move forward.
6. Enthusiasm for the Future Is High
Despite the challenges that were shared in many small and large meetings, there is an overarching enthusiasm for where the industry is headed and the prospects for success in the future. Some of this positive vibe can be attributed to the energy of meeting in person again, but most bankers and credit union executives share a belief that banking has never been so fun.
As one credit union executive said, “I am challenged every day beyond what I thought I could achieve. The challenges of real life made me realize that I enjoy trying to meet the expectations of a member that demands more. I think our organization is up for the challenge as well.”