Growth Beyond 2022: Stop Guessing and Start Knowing

by Tim Klatt, Director of Retail Strategies & Head of Vivalociti

Published: August 15th, 2022

While the growth of fintechs is nothing new, the grace period for traditional financial institutions to respond to their prowess is coming to an end. Inaction at this point could cost your financial institution its reputation, and its future. Instead of viewing fintechs solely as a threat, forward-looking financial institutions have accepted the fact that fintechs rose from an unmet consumer need, and are carving out their own place to more directly address that need.

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, stay the course and hope for the best? Or, will they embrace change, find opportunity in evolution and gain momentum towards a new and better future? The choice is yours - but it should be an easy one to make: most, if not all, of the 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.

Lean Into the Changing Landscape To Power Growth

Today, many traditional financial institutions are in survival mode, 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 surviving to thriving.

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

For the opportunity areas, lean into the learnings fintechs have provided us, and where possible, put your own spin on them. Your own tailored approach to a proven fintech formula allows you to maximize your 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 your organization. When financial institutions double down on serving consumers over selling services, they bring something to the table that fintechs can’t.

Invest In A New Toolbox; And Curate Its Contents Carefully

While there are go-to resources and approaches that will always hold value, it is likely your toolbox needs an upgrade. We’ve established that serving over selling is a game changer for financial institutions - but what if you took what is largely relational and backed it up with some tech tools?

Lift and Shift

By leveraging technology to streamline operations, you build efficiencies 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! Consider:

  • 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 your staff to be more present and attentive when interacting with individuals in-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 chat box 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 financial institutions have even added ITM-only branches to maximize consumer convenience.

 

Stop Guessing: Unlock The Power Of Data, And Put It To Work

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 you 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-and-future-term 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 intel to inform future initiatives?

Making Data Driven Decisions

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.

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 their branch space. 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.

Data and facial recognition in consumer banking

Data In Action

Data fuels interactive brand experiences, which serve to educate, entertain and engage your consumers. Informed by data, the creation of custom content placed in interactive displays and kiosks throughout your 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.
  • Showcase your story: History / local news walls invite visitors to be a part of your story with branded interactive walls that signify rich roots and demonstrate a connection to the community.
  • Give a warm welcome: Welcome visitors and capture necessary information in a modern, interactive way with digital check-in stations.

Digital game center in a credit union   History wall in a credit union office

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.

 

Final Thoughts

The landscape has changed, and will keep shifting. The time for action is now; articulate what you do best and identify where you can do better, then let data guide your plan to double down and add additional value. As we step into the final months of 2022, financial institutions that are ready to not only own their strengths and weaknesses, but use them both as fuel to move forward and better serve consumers will see success in 2023 and beyond.

 

Tim Klatt | Director of Retail Strategies

Tim Klatt | La Macchia Group

As Director of Retail Strategies & Head of Vivalociti at La Macchia Group, Tim Klatt believes in the power of data supported by in-market intelligence to predict viability of new branch locations. Tim is an expert in the industry, participating in colloquiums, focus groups, and round tables.

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