Financial institutions must become digital innovators
Advanced digital technology offers the potential of improving efficiency within financial institutions while creating a level of personalization and contextuality that enhances customer satisfaction and competitive differentiation. To take advantage of these opportunities, banks and credit unions must innovate new products, processes and deliverables or risk losing significant market share.
For decades, the products offered and the channels used to deliver financial solutions have changed very little. There was small risk to being complacent, because the consumer was modestly satisfied with what the industry provided. With little competition, the only time a banking relationship was “in play” was when a consumer moved or was in the midst of a major lifestage change.
Modern digital technology has disrupted this legacy banking model on all levels. First, it has dramatically altered the balance of power between consumers and their financial institution(s). In a relatively short period of time, consumers have more insight and choice at their fingertips. The competitive playing field has expanded exponentially, with thousands of new non-traditional organizations leveraging consumer insight and digital channels to create entirely new financial solutions. Finally, digital technology has drastically improved the economics of banking (at least for those organizations not saddled with legacy infrastructure).
The result is an increasing need for financial institutions of all sizes to become digital innovators. Without a constant reinvention of both the products offered and channels supported, banks and credit unions run the risk of losing their most valuable relationships in a “digital moment,” with a click on a mobile device.
continue reading »
