As innovation becomes an integral part of a financial institution’s (FI) success, banking leaders have become overwhelmed by the new technology-driven day-to-day. The speed required to catch up with what users expect from their banking experience was enough of a challenge, but keeping pace with innovations that maintain relevance in the marketplace is increasingly difficult. The speed of today can only be met through partnerships with those whose business is maintaining or establishing that pace.
In our third Gold Standard Series event with Jim Marous, co-publisher of The Financial Brand, he and our CTO Marc Jones examined how to meet your goals while comfortably accelerating to the speed of innovation. Here are the highlights from the conversation.
Digital transformation is more than just technology.
No matter an FI’s size, they can’t transform all at once or all alone. Still, the need to start the transformation process is crucial, as users are diversifying their holdings, using different FIs and vendors for checking, lending, savings at the expense of a close relationship with a single FI. The question FIs are now asking is how can we make impacts immediately?
Consumers are aware of what’s possible in a digital experience, and expect tactile engagement and personalization from their banking apps and online banking experiences. Their loyalty may be at risk when they aren’t able to access the tools they require fast enough. The pressure is on FIs to innovate at speed within and outside of their organizations, making experiences better and imagining all new approaches to business. FIs must innovate to remain relevant.
Innovation does not mean developing something entirely new, however. Innovation is typically the iteration of existing processes. A component of innovation is a notion of self disruption to achieve iterative progress, requiring most FIs to augment how they imagine and approach digital banking and the concept of innovation. The solution to this challenge is less centered on technology than one would think, and more focused on how an organization runs.
All of this is difficult to accomplish without a digital banking partner to help an FI gain perspective and receive guidance from. As FIs select their partners, they should make sure their aspirational and tactical goals are aligned with their partner’s innovation strategy.
The role of data and analytics in innovation.
FIs are increasingly aware that they must move toward digital experiences that leverage data and analytics — both drive innovation, optimization, and personalization. But how do FIs use it all to their advantage? To begin with, FIs need not prioritize utilizing the newest products.
Although FIs do have to build the latest digital experiences to show users they know their FI is interested in meeting their needs, that may not require the newest data analytics technology. It does, however, incorporate other tech concerns to form experiences from so much data. Striking a balance is important, as user expectations of digital engagement determine user loyalty.
Despite knowing the importance of data and analytics, the banking industry is behind the curve on innovation maturity. According to the latest Digital Banking Report, FIs ranked themselves as behind on innovation, spanning all areas of banking, not just technological considerations. So how do FIs look at the ecosystem to improve their standing and build a better innovative experience?
Remembering that a key part of innovating is about developing a culture that fosters innovation, not just adopting the latest technology, FIs must recognize how dynamic the market is and move themselves into a position to be less reactive. Proactive FIs are those that change their organization to create more user loyalty.
Like the market, data is also ever changing, and FIs have to understand that to ultimately provide actionable insights, they will have to leverage a service provider that helps jump start and accelerate that capability.
Where innovation lies in digital banking.
FIs should be careful to avoid “Innovation Theater” to make meaningful progress with emerging technology — adopting technology without a vision or employing data and analytics tools without a data strategy or even clean data. FIs should be willing to disrupt themselves for a digital future and look toward building more engagements that are positive for users.
One way to disrupt for innovation: start now. Organizations risk analysis paralysis because there’s so much to choose from as they begin their transformation journey, but keeping a focus on specific goals for their user experience with input from their digital banking partner, FIs can find where they need to start innovating for maximum impact.
For instance, as predominant as mobile is for accessing digital banking, FIs should consider improving user engagement on desktop. Focusing on making that channel as interesting and intuitive as mobile shows users who prefer that method of banking that their FI is thinking of them and takes a complete digital experience seriously.
Thank you to Jim Marous and attendees for another great Gold Standard Series event!
You can watch Banking Transformation: Fostering Innovation and Leveraging Emerging Technology on demand by clicking the link below.