3 Ways Financial Institutions Can Stay Relevant in a Digital World

Financial institutions of every size are facing a brave new world. We’ve seen a massive shift toward online banking, digital payment tools, and neo/challenger banks in the past couple years, with more and more people choosing digital first for their finances. If you’re caught flat-footed, it’s easy to get left behind… but let’s not forget this is also a massive opportunity for trailblazers.

Relevance is key to success in a digital world, whether it’s banking or any other industry. Here are three ways to stay relevant as we sprint into the future.

1. Embrace simplicity in the online experience

It’s a cautionary tale that financial institutions won’t soon forget: In the early days of the pandemic, FI’s that hadn't invested in their digital experience lost the ability to gain new customers because they didn't have basic functionalities like online account opening. Clunky and time-consuming processes like multi-step enrollment drove away people who suddenly wanted to do all their banking and payments online. Meanwhile, FI’s that had recognized the importance of digital banking services were able to keep up with the sea change.

Creating a frictionless experience is key. It has to be simple and easy to give people a reason to do business with your institution, whether they’re opening an account, applying for a loan, moving money, or making payments. If you can meet the consumer where they want to be, if you can personalize their experience, and if you make everything as convenient as possible, your engagement and retention numbers will improve. 

2. Use technology to support financial well-being

Banking is traditionally about checking, savings, and loans. But how do you build a long-term relationship that supports a customer's goals and ambitions? My son is 23 years old and he wants to start building credit. Guess what? He’s looking at digital banks like Chime and MoneyLion because they make it easier for him to get started, and offer tips on how to begin building his credit. Banks and credit unions should be the ones owning that space by playing the advisory role and building relationships.

Technology makes the difference. My son is looking at those digital banks because they offer simple tools to help him achieve his goals. Every bank and credit union needs to assess itself on those same standards. How are you improving the financial well-being of your customers? What are you offering that helps them manage their money?

You can start by tackling one of the biggest customer frustrations — yep, I’m talking about tracking, managing, and paying bills. There’s significant friction in tracking, managing, and paying bills across financial institution sites, biller sites, auto-debits, etc. It’s no wonder that X% of consumers get anxious when it comes time to pay their bills.

People overwhelmingly want to handle all of their bills in a single place, they want to be able to use their debit and credit cards (point junkees), and they want real-time assurance the bill has been paid. That’s why we launched Bill Center, a fully-unified payment hub that gives customers a 360º view of their bills with payment choice across debit, credit, and digital wallets. And by making it easier for customers to manage their bills, you won’t just drive greater engagement and customer loyalty by improving their financial lives — you’ll also gain critical insight into their payments and behavior.

3. Think platform, not product

The technology you implement has to be open and flexible. We don't know what's going to happen in the future, so you need to have a system you can maneuver when the times and consumer behaviors shift.

That’s easier said than done, but the right technology partners can help. You need to find the best partners to provide the best experience that aligns with your long-term vision — not just some run-of-the-mill solution to check the box. Here’s an example: Several of our digital banking partners are opening up their platforms with APIs and SDKs so that technology partners like Payveris can integrate their value-added financial experiences to the overall digital banking customer experience. That’s a win-win-win. The customer gets a better experience, the bank or credit union gets more customer engagement, and the tech companies get long-term clients.

When you make your technology open, it’s easier to control and add value to the customer experience. That’s what drives so much of our work at Payveris: Our APIs and embedded widgets give partners and financial institutions flexible ways to integrate our personal finance, digital payment, and money movement technology into their digital banking experiences. So if there's a third party that has a great new financial service but needs payments, they can connect to our APIs or embedded widgets. Because we’re prioritizing flexibility, we're not limited to one size fits all. 

Shape the future today

Staying relevant isn’t easy in today’s competitive environment. That’s why it’s all the more essential for banks and credit unions big and small to develop forward-thinking strategies and seek out the partners who can help bring their visions to life.

No one can predict exactly what’s coming down the pike, but it’s safe to say that the next few years will be pivotal in shaping the future of digital banking. With these tips in mind, you’ll keep your financial institution positioned to adapt, react, grow, and succeed.

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