We recently had a conversation with Whitney Loe to discuss the future of retail banking, digital transformation, and the role of people in banking. As Director of Business Development at Ignite Sales, Whitney has gained a unique perspective of consumer behavior and preferences uncovered by analyzing data gathered by the platform.
Read Part 1, “Why Are Financial Institutions Still Investing in Branches?”
Momentum: As the shelter in place orders lifted, did people the people who adopted digital banking go back to the branch?
Whitney: We thought online conversations would stay online, but our clients’ data showed that digital banking adoptees flooded back to the branch when they could.
Based on our own research as well as outside research, we were surprised to see how much branch traffic went back up after the pandemic. One of our clients actually saw branch traffic higher than it was before the pandemic. There was another study that I was reading that said branch traffic after the pandemic went back upwards to eighty percent of what it was before.
How will digital transformation impact the people who work in branches?
This data is reinforcing and emphasizing that people still want that human interaction, but what staff are doing in those branches may be changing. All this digital technology is great, and artificial intelligence is going to play a huge role in the near future, but let's not forget that no matter what we throw out there, you cannot replace personal experiences. You can enhance them, you can make them stronger and can give your employees tools to better help members, and you’re going to see a lot more things come forward like chat bots, digital engagement platforms, and guided conversations, where consumers can do some self-service. But personal interaction is never going away.
I think there's a lot of controversy or debate right now around “are these new technologies and all these digital platforms trying to replace me and my job.” The answer is that it's not trying to replace employees, but their job functions may change, or their responsibilities may change. Technology is not going to replace human interaction all together because that would never be successful.
Bank branches aren’t going away, they’re just going to be different.
What about small business services?
Credit unions are definitely uniquely positioned to help small businesses. We saw that with the Payroll Protection Program, right? It was a big deal that credit unions were very much there to help their small business members.
With small business members comes a level of complexity that is different than when you're helping your consumers. Most of us can have conversations with our members about checking accounts and loans and what products and services are good for them, but when you start talking to a small business member and start uncovering their needs it's a lot more complex.
It goes back to that experience where a business owner can walk in and have those conversations, but the financial institution is going to need some form of digital engagement to deliver the best experiences and services. There are a lot of questions and moving parts, and you can’t just sit there asking all these questions without gathering that data and turning it into a better experience that can help that small business grow.
As credit unions are getting more and more small business members, it’s important that they are hitting the mark on that engagement and using digital channels and digital platforms to get these small businesses where they need to be. If you want to talk about where branches are going, a lot of the focus is going to be helping small business owners.
Do you see people hesitating on investing in digital transformation?
We're still seeing a lot of hesitation. Part of it is because we're all still trying to come out from underneath everything that has happened as a result of the pandemic, and part of it depends on where you are in the market with different impacts.
The pandemic showed all the cracks and where we are missing in digital and experience and engagement. I think it just became very clear that there are some things that we are lacking that we need to start doing, but I think it's taken some people time to make a road map. I mean, this is not something you can just decide overnight.
Yet we were talking to one credit union the other day, and their road map is as clear as day. They're doing exactly what they need to be doing. They understand that you can no longer not have some form of digital engagement and digital experience, and that it has to merge with physical so you're talking about consistency across all channels.
Do you think there’s a risk by financial institutions holding off right now?
You can't sit back anymore. You can't wait to see what everybody else is doing, and I think there's been some of that within the financial institution arena which is kind of “lets, you know, see what the other big players are going to do or let's see what our competition is going to do.” And we absolutely cannot afford to do that anymore. We have to be up and ready.
Sometimes if you sit there and do nothing it is absolutely worse than if you acted, if you got out there and tried something. And I'm a big believer of that. I'm not saying go and reinvent your entire financial institution from top to bottom overnight, but you got to pick an area and you've got to start working towards it.
This is especially true when it comes to this idea of digital, because digital is a journey. There is no end to it, you're going to be on this path forever and it's going to be changing because consumer needs are always going to be changing. Different generations are going to be coming up and the way my generation interacts is different than my daughter's, but my grandparents do something totally different. We have to remember that this is an ongoing process.
The amount of FinTechs coming into our space is really high, and a study predicted that in the coming years that 35% of banking revenue would be interrupted by FinTechs. That’s a lot of revenue to be interrupted.
Everybody's doing it. You've got Walmart, Google, Amazon, you name it, everybody's trying to take part of that wallet share. So if you sit back and you do nothing, and you're not finding a way to improve that experience and to help your customers and your members get back on the path to financial wellness, you’re going to be in trouble. You have to stay relevant.
Thanks again to Whitney for joining us!
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