Data expected to be top focus for community financial institutions during the second half of 2023
ATLANTA, GA (August 15, 2023) — In the face of economic uncertainty, persisting inflation and overall volatility, community banks and credit unions are focusing on ways to support their customers and members while also optimizing margins and efficiencies across their institutions. NCR Digital Banking has identified the following trends to watch as we enter the second half of the year.
Data remains at the center. It’s been proven that strategically harnessing data can reveal opportunities to drive revenue, create operational efficiencies and provide insights into how to increase profitability. Data can also show critical consumer behaviors and channel preferences, transactional patterns and events in the customer lifecycle – all of which can be used to hyper-personalize interactions and improve customer and member relationships.
However, this is all moot if data is not being effectively collected or analyzed. The second half of this year for many will be about progressing their data journey, whether that means getting the systems and resources in place to effectively leverage data, establishing baseline metrics, identifying trends or tracking growth via profitability studies. If done correctly, the strategic analysis of data can help improve customer and member service and inform critical business decisions.
Community institutions are prioritizing more proactive, digital-first financial education and support to reinforce their relevance and trust. Financial literacy programs, easily accessible content and one-on-one consultations with financial advisors are strong ways for financial institutions to help customers and members enhance their financial fitness. However, how these options are delivered matters.
It’s not enough to provide the right tools; they must be provided in the right way, available via a digital-first experience, regardless of the channel. Infusing financial fitness tools and education contextually into the digital experience offers the convenience and flexibility consumers crave.
Proactively communicating to consumers is equally important, sharing important updates around changes in interest rates, inflation, student loan repayment options and other economic factors that may impact their finances. Again, this communication should occur within the digital-first experience.
As digital continues to grow, trust becomes more fragile and economic uncertainty lingers, banks and credit unions have a responsibility and opportunity to help provide financial security and wellness solutions to support their local communities.
Banks and credit unions will test the AI waters. While Chat GPT has prompted an array of speculation for what will be possible with AI in the future, many fail to leverage the technology for the benefits and use cases it can provide today. More will start to incorporate AI into areas such as customer support and financial guidance, process automation and risk management and fraud detection.
To be effective, an institution’s AI plan should be flexible. After all, as the technology evolves and the institution tests out new use cases, there will likely need to be adjustments made along the way. Further, this strategy must be informed by and work in tandem with the institution’s data strategy – this is another example where analyzing and interpreting data can help guide critical technology investments.
There will be a greater focus on small business as the drive for deposits continues. As banks and credit unions focus on retaining and growing deposits, small business has once again emerged as a big opportunity. However, most institutions lack the tools and technology to seamlessly tackle common small business pain points, such as invoicing and frictionless payments. Institutions that embrace the digital-first software and services necessary to support small businesses, within the context of their digital-first banking journeys, will be well positioned to strengthen these relationships.
This is another area where data and personalization are key – small businesses, much like consumers, want to see that their bank or credit union knows and understands them and their unique business needs. Those that are able to leverage data to more effectively serve their small business customers will come out ahead.
“It has been an eventful first half of 2023, and it’s inspiring to see community institutions continue to step up and do what they can to support their customers and members,” said Doug Brown, President, NCR Digital Banking. “Those who embrace a digital-first approach and prioritize having a strong data strategy – and then making critical business and service decisions based off of that data – will be well positioned to win wallet share and loyalty throughout the rest of the year and beyond.”
About NCR Digital Banking
NCR Digital Banking is hosting a Financial Fitness Challenge for its banks and credit unions, offering expanded financial health-focused tools and resources for clients. The goal is to drive digital banking awareness, adoption and engagement to ultimately help end customers and members improve their financial wellness.