Accelerating Your Bank Toward the “Next Normal”

By Kevin Quinlan, nCino

The COVID-19 pandemic has changed the game for financial institutions. Over the last few years, financial consumers were already growing more comfortable with conducting banking interactions via remote, digital channels like online and mobile banking, but the pandemic rapidly accelerated this trend.

As a result, many consumers are crossing the threshold of a traditional bank branch less frequently than ever before. In addition, a recent McKinsey study found that 75% of individuals who began using digital channels for the first time due to COVID plan to continue using them post-pandemic.

For financial institutions slow to adapt to these evolving expectations, the window to change is rapidly closing. Banks must serve their current and prospective customers wherever they are, rather than forcing them into a single channel of engagement. If they don’t, someone else will gladly meet their needs.

The key is to leverage digital technology to modernize and enhance the customer experience, without forgoing the human touch that has always been the mark of loyal, long-term relationships.

To prepare for banking in the “next normal,” institutions should focus on three core areas: • Creating a frictionless, digital-first experience for customers; • Deploying cloud banking to enhance efficiencies and empower employees; and • Enabling the Intelligent Enterprise to supercharge organizational growth.

Creating a Digital-First Experience.

According to a report published by the Financial Brand in late 2020, the goal to “improve [the] customer experience” was named a top priority by surveyed financial institutions, second only to “digital banking transformation.” The message is clear: today’s financial consumers expect the same convenient, frictionless access and seamless experience from their financial services providers that they receive from “Big Tech” companies like Amazon, Netflix and Google.

To achieve this goal, banks must not only deploy leading digital customer engagement technologies and features like mobile banking, customer onboarding, online loan applications and digital account opening, but support them with an end to end “system of engagement” that is fully integrated across the enterprise.

The customer experience must be consistent across all channels of engagement, whether in the branch, through the contact center, or via online and mobile banking. These channels must also be intuitive and intelligent enough to anticipate the customer’s needs before they inquire about a new service, account or loan. Once they ask, it’s often too late and they have likely started looking elsewhere.

Enabling the Employee-Customer Connection Through Cloud Banking

While a focus on the customer experience is critical, banks cannot ignore the needs of the back office. It’s just as important to design and implement an efficient, collaborative experience for your employees, as it is to deploy a convenient, touchless experience for your customers. The platform of choice for both the front end and back office is found in the cloud.

The heightened attention on the employee experience comes at a critical juncture, as many workers have struggled with performing remotely during the pandemic. While working from home, with its myriad distractions, many employees found it challenging to print or scan documents, lacked adequate equipment to do their jobs and confronted intermittent or unreliable broadband internet access. Some even needed additional training on how to interact with clients over the phone, after careers spent working with their customers in a strictly face-to-face context.

Through the power of cloud banking, banks can easily share customer data and information across the enterprise, automate manual processes and eliminate the need for paper files via ready access to a secure central repository. The cloud frees up staff to spend their time working more closely with their customers, prospecting for new clients and nurturing stronger, deeper and more loyal relationships.

By focusing on the employee as well as customer experience, financial institutions can foster a positive internal culture while also serving their clients’ evolving needs.

Launching the Intelligent Enterprise

Finally, the time has come for financial institutions to evolve into the “Intelligent Enterprise” by incorporating cognitive technologies such as AI, machine learning and robotic process automation (RPA) into their operations.

Harnessing the power of AI will enable banks to obtain deeper customer insights, make informed, data-driven decisions and more effectively mitigate risk and operational inefficiencies.

According to a study by Accenture, financial services companies that deploy AI wisely will realize net job gains of 14% and revenue growth of 34% by 2022.

Such revenue growth should also translate to profitability growth, both at the individual relationship level as well as across entire portfolios. Incumbent players can learn from the success of fintechs, which have been more aggressive at deploying autonomous decision-making systems, introducing native AI-enabled products and embracing cloud technology, versus using cognitive systems to simply improve existing products and processes. This difference in focus may explain why, according a World Economic Forum survey, 30% of fintechs have attributed a significant increase in profitability to the impact of AI compared with just 7% of traditional institutions.

The key lies in accessing the vast stores of data banks already have at their disposal and generating actionable insights through the use of cognitive technologies. In this way, agile organizations can become more predictive and proactive both in anticipating their customer’s needs and desires, and in developing data-driven strategic plans for future growth. That is the true mark of the Intelligent Enterprise.

Start Your Digital Journey Today

In the wake of COVID, economic uncertainty and lower earnings hang over every decision a bank will make in the short- to mid-term. For this reason, many institutions are being more selective in their technology investments and may be looking for opportunities to cut costs while continuing to enhance their digital capabilities.

In the past, a comprehensive digital transformation project could take up to five years to implement. But banks can’t wait!

Micro-transformations represent one way to keep the momentum moving forward through a staged approach to digital transformation. An organization can begin by digitizing a single customer-facing line of business, addressing areas like customer onboarding or deposit account opening, or by implementing eSignature or digital document capture and exchange functionality. Once this initial stage is complete, the bank can tackle the next highestpriority project along the predefined roadmap.

These early successes help build momentum and excitement for the overarching digital transformation among all key stakeholders including employees, customers and executive leadership.

COVID-19 has served as a catalyst for change in many industries, and financial services is at the top of that list. As expectations and needs evolve into the “next normal,” the ability to serve both customers and employees digitally will prove fundamental in ensuring organizational success and growth well into the future.

About the author: Kevin Quinlan is Area Vice President, Community and Regional Banking, with nCino. IBA Associate Member