One of the biggest exciting-yet-uncomfortable realities of financial services is how much the role of financial institutions is changing. For executives and directors, this can be extremely unnerving. Ideas of digital transformation and customer engagement come to mind, but it’s hard to see how those ideas look in practice without a full understanding of the opportunities new technology presents and how information sharing is applied in a meaningful way.
In order to understand the true value of financial services in 2020 and beyond, executives need to think of their financial institutions less as isolated businesses that provide a service, and more as background players who will be constantly, albeit less obviously, present in their customers’ lives. Customers won’t necessarily go to the bank or credit union; instead, the financial institution will always be there — when grocery shopping, browsing online or getting your oil changed. Consider the following mental transitions your financial institution can make to rethink the way you interact with your customers.
From Bottleneck to Door Opener
Banks and credit unions have always served a major role as a protector of their clients wealth and information. Security and regulation are staples of financial services, and these pieces should never be taken for granted. However, younger customers have higher expectations for how technology should work for them across all sectors of their consumer lives, and having a financial institution that gets in the way has the potential to frustrate customers, even if done so in the interest of security.
Instead, financial institutions are maintaining their high levels of customer security while also streamlining and opening opportunities for the way customer data can be utilized to benefit these individuals.
A major piece of this puzzle is the role financial institutions have as guardians and beneficiaries of their customer data. Historically, financial institutions have always had huge amounts of intimate customer data. In 2020 and beyond, these financial institutions have a responsibility and a major competitive advantage to enhance and utilize that data.
From Centralized to Information-Fluent
When we think of digital banking, we think of a stand-alone platform; log-in screens, account dashboards and security questions come to mind. This current setup is valuable and won’t go away any time soon. However, rather than serving as a stand-alone platform, financial services will increasingly become a lens through which commerce and online activities function. Perhaps more accurately, financial institutions will always be in the background, whether by providing customer security during a transaction, leveraging customer data to make purchase recommendations or streamlining the online shopping process.
Additionally, this will come in the form of increased information sharing. With the Internet of Things taking off and a higher expectation around interaction of mobile devices with other kiosks, banks and credit unions will be expected to protect customer privacy while, within regulation, readily sharing customer information with other devices. Rewards, vital customer information and speed of purchase all benefit from this ease of exchanged information.