Banks Enhancing the Digital Experience — FinTechtris

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Banks Enhancing the Digital Experience — FinTechtris

By the time banks and credit unions started updating their digital experience, fintechs had established a strong footing in this area. Ultimately, the delay to change wasn’t due to lack of awareness (the ‘why’) but more so in cutting through the layers of management and bureaucracy in choosing the ‘how’. It’s commonly held that change in banks takes time and the pace is slow. Other compelling factors are forcing these institutions to pick up the level of urgency.

remote workforce

This is the ‘new’ driver in delivering a digital experience. While banks started the journey in restructuring technology in the last 5-6 years, they were not prepared for the the impact from COVID-19. Their core distribution and engagement channel of retail bank branch banking was turned upside almost overnight. Clients were unable to walk into their local branch to transact with a teller or speak to a personal banker (or adviser) about their account. Customer walk-in traffic already declining since 2012, is coming to a standstill.

Banks and credit unions needed to quickly switch gears in how their workforce operated during lockdown. There was now a new ‘digital-only’ mindset for sales, service, advice, and operations. Working from home meant new security risks in protecting customer data and access on non-bank networks. Solutions and applications had to become cloud-based to accommodate the changing needs of the new banking workforce.

As banks and customers adjusted to the ‘new normal’ and the COVID-19 threat subsided somewhat, retail branches have re-opened to operate “business-as-usual”. However, most clients are still staying with digital channels, opting not to go into a branch.

digital accounts for today’s business client

The sector for B2B payments and banking has taken on a life of its own over the past decade. The growing demands of businesses to quickly transact across multiple payment rails (ACH, wire transfer, card processing, checks) and jurisdictions (domestic and international needs) — has hit hard on corporate banking by financial institutions. Banks need to optimize for efficiency and safety in addressing the needs of business clients.

This comes down to a flexible suite of solutions for companies to pick from, especially when it comes to invoicing, account structure, payments, and reconciliation. The fintech companies able to provide virtual accounts, real-time money movement, accounts receivable/payable bookkeeping, and payroll are finding success and taking market share from banks.

Business banking is a low-user, high-volume revenue segment where banks have had an advantage through treasury services and lending. Unfortunately, the lack of innovative features and account controls is causing financial institutions to play catch up.

RISING EXPECTATIONS FROM CUSTOMERS

The sum of these trends points to meeting customer expectations with the right digital experience (based on the latest products and services). Any gap in experience causes a client to quickly switch to a banking alternative to fill their need.

For financial institutions, working with technology partners and other 3rd parties is the new norm in rapidly overcoming legacy system issues. New services, features, and access are being pushed forward through application programming interfaces (APIs) that allow banking services to be embedded outside of financial institutions and onto customer platforms themselves.

the path forward requires api integration

Go to Publisher: Articles – FinTechtris
Author: William Morales, Founder