THE DIGITAL BANKING INDUSTRY LEADERS FORUM ™

A strong customer relationship stands as the greatest asset for community banks and credit unions. That distinct affinity is so valuable that fintechs and large banks are spending billions of dollars to emulate the kind of emotional connections and personalized relationships smaller banks and CUs have in spades. Meanwhile, those same smaller financial institutions feel pressured to launch significant digital transformations out of fear their customers will turn to the tech-rich big guys and neobanks in search of the level of self-service and immediate gratification they have come to expect from today's online retail transaction experiences.

It’s a combination Catch 22-FOMO scenario that can cause community banks and CUs to run to tech for tech’s sake and potentially undermine the relationships they’ve worked so hard to build.

Striking The Balance Between Convenience & Quality Interaction

Nearly 50 percent of banking customer respondents in the 2022 CapGemini World Retail Banking Report said their current banking relationships were neither rewarding nor emotionally connected. If the importance of that connection is in question, consider the link between people’s finances and sense of well-being. In the end, the vast majority of transactions are emotional.

So, how do smaller banks and credit unions strike the balance between the high-touch customer service they are known for, and the convenience of self-service options people have come to expect and appreciate as well?

Break out the transactional from the relational. When empathy and problem-solving are required, like the inability to make loan payments or overdraft issues, it should be easy to connect directly with a live person, even if the account holder started with a digital channel. It’s important for organizations to map out the customer journey based on type of transaction and prioritize self-service options such as digital and phone automation for those that don’t require or desire high-touch assistance, like making or scheduling payments, checking balances, or making transfers.

Integrate across experiences. This is one of the biggest challenges financial institutions face: capturing the data that help create a good experience in self-service channels and then making the information actionable. Creating consistent capabilities across channels is difficult if there are multiple solutions involved because there will be different sets of rules, regulations, and security layers. In an ideal scenario, someone who started a transaction in a self-service channel should always be able to access a live customer service person, have that person immediately see exactly what the customer was trying to accomplish, and help them complete the transaction. There should also be communication designed to help customers, including payment due-date reminders, and messages that make them feel valued, such as a simple thank you note for making a payment or completing a payoff transaction.

Three Ways Tech Can Humanize Customer Experience

1. Make it easy to open a new account. It is the start of the customer relationship, the first impression, so it should be simple and frictionless, but too often it isn’t. Entering information and moving money to fund new account sounds easy, but many account-opening platforms create jarring experiences with lots of random steps. People can send money to friends with just a couple of taps. Why then should it be so difficult to transfer money between financial institutions?

2. Send text messages that are friendly and helpful, such as “Would you like to sign up for proactive reminders and make payments when you need to?” Send both reminders and thank yous, but don’t bombard customers and make sure to give them an easy, fast way to opt out.

3. Create embedded experiences across channels. Omnichannel experiences shouldn’t be monolithic. In fact, they should be broken down with specifically built experiences across channels on the front end. While the front-end experiences are distinct, reconciliation capabilities need to be consistent on the back end. Risk mitigation, operational preferences, and reporting need to be cohesive functions smoothly running behind the scenes. This is where financial institutions can hit the system-integration wall. Thankfully, API development for core integration across legacy banking systems has come a long way, allowing fintech partners to deploy modular solutions without the need for extensive customization.

Ignore Hype & Focus on Delivering The Best Experience

Prioritizing rollouts and picking the partners to implement them keeps FI decision-makers up at night. The sheer volume of news and investment around fintech creates so much noise that it is difficult to know what will have staying power and provide genuine value to both financial institutions and their customers. Industries benefit from innovation and options, but shiny new object syndrome abounds in fintech. Thousands, yes thousands, of fintech companies have shuttered over the last 15 years, according to Crunchbase. Many recently crashed and burned because of economic shocks, such as Fast, which shut down in early 2022 after riding high as a fintech-innovation darling set to revolutionize online check-out. While some run out of money, others go down because of compliance and regulatory issues. The numbers are truly staggering. Seventy-five percent of VC-backed fintechs don’t make it. To put that in further perspective, the average failure rate of restaurants is 30 percent.

It is a cautionary tale, but one that should also give FIs some comfort because it reinforces the importance of creating a detailed roadmap with concerted prioritization and a thorough vetting of strategic partners and of the strategy itself.

As institutions consider rolling out new self-service capabilities, they need to figure out what will genuinely help customers and the team members who service them. Singularizing a great experience for every customer across every channel should be every financial institution’s north star.

Jason O’Brien is CEO of SWIVEL Transactions, LLC., a financial technology and services company providing specialized, integrated transaction enablement solutions that remove friction for account holders, borrowers, and departments across financial institutions, as well as collections agencies and offices, while also mitigating risks associated with payments processing in the digital environment and moving funds in digital domains. More than 850 financial institutions use SWIVEL's payment processing solutions across the United States. The company is a wholly owned subsidiary of SWBC, headquartered in San Antonio, Texas. For more information about SWIVEL and its innovative solutions, visit www.getswivel.io