Community Financial Institutions Whistling Past The Graveyard

Community banks and credit unions may not be as frightened as they should be about the gap between what consumers expect and what they get when banking digitally.  In The Financial Brand (TFB) article, “Lack of Personalization Puts Banks at Odds with Consumer Expectations,” those gaps are quantified, and the data is scary.

For example, 83% of consumers are concerned about their long-term finances. Still, only 32% of financial institutions believe it is significantly more important to focus on the financial well-being of their customers and members.  And 66% of consumers expect companies to understand their unique needs and expectations, but 73% of customers and members feel the financial services industry is not customer-centric.

66% of consumers expect companies to understand their unique needs and expectations.

While understanding how such gaps can occur is important, the more interesting question is how they remain in place year after year.  It might be evidence of a zombie apocalypse, the root of which is the acceptance of these conditions by some financial institutions.  Usually, this acceptance is based on the idea that “our digital banking could be more customer or member-centric but compared to the other institutions in our market, we are competitive.”

If you hear such a statement, run.  You are amongst the living dead who assume their competition is the bank or credit union down the street.  In the digital age, data shows that consumers are leaving their primary financial institutions for one of the digital-only options known for their focus on customer experience.  This includes customers of even the largest banks.

Community banks and credit unions not yet among the living dead are approaching things differently.  These institutions have committed to being leaders in offering customers and members an experience designed uniquely for them.  To achieve their goal, they are not being tricked by the narrative that says new technology is too risky and expensive.

Instead, they are reaching into the candy bowl and coming away with the treats that only new technology, such as AI, can deliver. And they dare to apply the new technology to support a digital transformation strategy that goes beyond personalization to create a segment of one digital experience for consumers.

It is possible to achieve such a goal, but first, we should stop whistling past the graveyard, pretending there is nothing to fear.  Those content with a substandard customer experience because it is “no worse than anyone else’s” have no fear and thus no courage.  Without the courage to embrace technology that delivers a competitive advantage, an institution will ultimately become another of the living dead.