Traditional financial institutions accomplished some admirable tasks in the coronavirus national emergency. They distributed billions in Paycheck Protection Program funds, provided financial services through remote channels during lockdowns, and gave Americans a trusted place to continue their financial affairs. But as the nation fitfully attempts to reopen to some new normality, banks and credit unions find themselves returning to the long-running competitive war with fintechs and other newcomers to financial services.
And traditional institutions will face the same competitive deficiencies they did before COVID-19 gave everyone something new to worry about, according to Peter Wannemacher, Principal Analyst at Forrester. One of these is lack of differentiation. While the pandemic challenge will continue for some time, Wannemacher says, now is the time for traditional institutions to get more serious about differentiating themselves from the pack. It is essential for their future growth.
“Differentiation matters less in times of economic turmoil,” says Wannemacher. “In times like these, a bank brand being unique doesn’t matter as much as being trustworthy.” But differentiation can’t be snooze-buttoned any longer because it will matter big time within five years, he predicts — if not sooner.
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