Are You Digitally Ready For What’s Next in Banking?
My youngest son just started Boys Scouts and he was asked to help his family prepare “ready bags” for first aid and other emergencies. For those not familiar with “ready bags”, the concept is that you put a few emergency items in a back pack that can be ready to go in a minute. Well, having had older sons do this same exercise we just took the old ones and thought we would update them with a few minor things. I was shocked however when we had to change almost everything because it turns out 10 years have gone by since we did the bags last time. For example, there was no way that my older kids would have been able to wear the change of clothes in their ready bag and thank goodness, my family had matured out of the stage of me having to carry diapers in my bag for the younger kids. We clearly were not ready if we would have needed them for an emergency.
When it comes to digital strategies and readiness, the reality is that too many banks and credit unions are in that same situation. Over the past four months alone we have seen such an increase in the transition to a digital landscape and adoption that if you have not jumped on that wagon, you may be in operational risk for the future. The question is are you ready, set, go or more ready, set, oh no! when it comes to being digitally ready. Fortunately, there are a few things you can do right away to assess your current state.
Ask yourself, what digital expansion projects have you pushed out over the past several months during quarantine with COVID-19? McKinsey Consulting did a recent study on e-commerce and found that in the last three months alone, the adoption of digital commerce has doubled! For comparison, it took 10 years from 2009 to the end of 2019 to see that kind of growth. Your customers are adapting at breakneck speeds, but are you? Accessibility to your bank with online applications, digital portals for secure documents, and messaging are just a few of the areas that are must-haves in the new digital landscape.
Working remotely, sometimes with a smaller team, is a common challenge for your bankers today. The ability to make life easier for them is also paramount for your bank’s success. I recall back in the days when you had a credit file room with those annual reports printed out and on your desk. It might sound like this is reminiscent of years ago but for some of your banks that was just way back in February 2020. The new landscape is such that you cannot operate that way anymore. You need to innovate and escape the paper jam like never before. Imagine how more efficient your underwriters would be with automated spreading coming directly from your borrowers accounting software packages, or by scanning PDFs of tax returns. Again, examine your current process and ask if you are ready to go fully digital. If not, what do you need?
When every business in an industry digitizes its processes and operations, the question for leaders becomes how to differentiate their organization from competitors. This can lead to answers that would require capabilities that your financial institution has not yet leveraged in your current processes and operations. These decisions, especially in today’s economy, might be difficult to justify, as so much is unknown around the business outcome. But inaction or delay in action empowers your competitors to position themselves as the trusted banking partner that your customers should migrate to. There are endless studies that have been done, that call out how today’s consumers are willing to switch banks just because of enhancements or more accessibility to modern digital platforms.
At this time with the rapid changes in digitalization, now is the time to make sure you are ready so that you can be prepared for what the future deals our industry.
You might also like:
E-book - Digitizing the Lending Experience
Whitepaper - Digital Banking: Maximizing Technology
Posted on Friday, August 7, 2020 at 9:45 AM
by Mike Horrocks