Increasingly, speed of execution across an organization has been in sharp focus for many industries, including banking. The focus on speed is not completely new — all companies want to deliver quickly and efficiently. But banking has traditionally been slower moving — three-day waiting periods on deposits, slow internal decision-making necessitated by weighing risks, and compliance that often bogs down the pace of innovation. Change can happen, but often at a snail’s pace.
Enter the pandemic. All aspects of financial services, from the need for virtual financial assistants to account holder digital banking access, were put under scrutiny. It was a time of crisis. Banks and credit unions had to pivot to more streamlined digital interactions, heightened efficiency, and remote work.
During the midst of all of this, McKinsey research highlighted the need for speed in all industries, not just banking.
“Fast organizations outperform others by a wide margin on a range of outcomes, including profitability, operational resilience, organizational health and growth. Organization speed is an essential ingredient for outperformance.” – McKinsey
And that speed positively impacts key performance indicators in areas such as:
- Organization health
- Employee net promoter score
- Financial importance
- Operational resiliency
Those efficiency standards have stuck, and are now industry standards. Account holders began expecting fast, intuitive solutions, especially with their digital banking experience. Transferring money between people or accounts, bill pay, digital check deposit, digital account opening, and loan origination…all of it needs to happen in an instant.
It feels reminiscent of the massive shift that took place when dial-up internet finally sped up. Who among us would go back to waiting for an internet connection to dial up?
The Financial Brand recently reported that for FIs, speed has become a competitive weapon:
“[For FIs] The ability to see market trends, adjust strategies, innovate, create new solutions, make tactical decisions and deploy resources quickly provides a business advantage at a time of unprecedented change.” – Jim Marous
At Alkami, we couldn’t agree more.
But, according to Alkami’s new whitepaper, “The State of Digital Sales and Engagement in Banking 2023” by Jim Marous, less than 30 percent of digital banking apps allow users to open a new checking account, apply for a consumer loan, or manage finances with speed. It represents a huge opportunity for FIs that do offer these capabilities.
How Can Financial Institutions Leverage Speed Across the Organization?
- Focus on scalability. FIs need to partner with vendors that can offer speed and the ability to grow. With the pace of change in technology today, FIs can’t partner with a vendor stuck in version 2.0 when the rest of the world is moving toward version 5.0. Consumers and businesses want convenience and speed, so self-service options like real-time payments and fast, digital account opening with immediate funding need to be a prime focus. With The Financial Brand’s research finding that less than 30 percent of FIs are offering these options, so the opportunity to fill that gap is now.
- Put account holder engagement at the center. With all of the competition from fintechs and neobanks, traditional banks and credit unions need to focus on attracting and retaining account holders. They can do this by delivering what account holders need quickly and easily via their digital banking platform. If you’re not, another FI will. It means offering account holders easy, quick account opening, fewer clicks and screens to get through, and easy access to bill pay and money movement features. For FIs, it means having the data to anticipate what account holders need and offer it, when they need it. Remember, fintechs offer solutions at the touch of a button. You can, too.
- Extend the digital culture beyond digital banking. It’s not just about buying the latest and greatest digital banking technology. As the Financial Brand reports, it’s about “reimagining the business model and understanding the impact that digital banking transformation can have on customers, employees and the future of the business.” For FIs, it means using customer insights data to create “always on” marketing campaigns, with no need to wait for IT to pull targeted audience lists.
- Be proactive, not reactive. Staying ahead of what account holders need is the name of the game. Choosing a turnkey digital banking solution that offers the most popular configurations with your specific core and can be implemented quickly allows you time to focus on what matters most – engaging with your customers or members. Building speed into your solutions is vital to growing your business.
- Break down silos. According to the McKinsey report, 59 percent of banks say silos and the lack of cross-functional teams are the greatest barriers that impact the speed of banking. Technology is the tool, but culture change is also a must for FIs to move into the future.
If you’re interested in digital transformation to level up your user experience, create loyalty, and attract new customers or members, we can help. It’s what we do. Let’s chat!