How can midsize banks offer a digital experience that competes with the big players?
Big banks have been pouring resources into digital transformation in banking for years. Midsize banks with fewer resources at their disposal often struggle to keep up with the pace of innovation set by the big financial institutions. Still, they also understand that they have no choice if they want to remain relevant in the market.
The picture isn’t hopeless for midsize banks, however. They can compete effectively with the right strategies, despite their limited resources. By focusing on customer experience, adding a personal touch through all digital channels, and making smart use of technology, midsize banks can keep up and even overtake incumbents when it comes to the digital experience they offer their customers.
Smaller banks can still thrive if they concentrate on the right things and make intelligent, not difficult, digital change — here are three methods that any midsize bank may use.
Relentless focus on customer experience
Despite the significant investment in digital channels, most big banks are still far from offering a seamless, cross-channel customer experience.
While big banks may have the resources to throw at digital transformation, they often lack the agility and customer focus necessary to deliver an outstanding digital experience. Midsize banks can leverage that gap to their advantage and optimize their own customer experience to improve upon what big banks have to offer.
This can be done by creating a customer-centric culture within the organization, designing user-friendly digital channels, and offering personalized service that meets the needs of each individual customer.
Optimizing customer experience doesn’t have to involve massive resources. By their very nature, Midsize banks are usually more customer-focused than their large counterparts. They can leverage a customer-centric approach to create a culture that puts the customer first in all decision-making.
In addition, midsize banks can use their agility to design user-friendly digital channels and offer a great user experience. For example, it’s important to get rid of clunky paperwork and repetitive data collection—savvy consumers, won’t put up with that. Don’t rely on intuition either—midsize banks should frequently test to see what is working and what can be improved.
Finally, midsize banks can offer personalized service that meets each customer's specific needs. This can be done by using customer data to create targeted communications and offers and by providing a human touch through digital channels such as live chat or video conferencing.
By relentlessly focusing on customer experience, midsize banks deliver a better digital experience than their larger counterparts.
Providing a personal touch
Customers want to feel like more than just a number, and when it comes to providing a personal touch, bigger isn’t necessarily better. Midsize banks can gain an advantage over bigger competitors by finding ways to make the banking experience feel personal to every customer.
[.emph]of customers rate personalization as “highly important” in today’s financial services landscape[.emph]
Source: Capco Study
Data is key to that goal, and customer data and analytics can be leveraged to understand customer needs better and personalize their experience. That means collecting data on all channels, including front-end interaction, data mining, and back-end processes, to gain a unified view of the customer.
Then, the data should be used in a smart way to craft individualized experiences that address individual needs and interests. One way to do this is by using customer data to create targeted communications and offers. This could be as simple as sending a birthday card on the customer’s birthday or offering a discount on products that the customer has shown an interest in.
Banks shouldn’t be concerned that customers won’t want to share their data. A recent survey by Accenture found that 83% of consumers are willing to share their data to enable a more personalized experience.
[.emph]indicated a desire for one-on-one personal conversations with bank representatives.[.emph]
Source: Capco Study
A personal touch can really pay off. When a bank provides customers with a delightful and personalized experience, they’re much more likely to come back and remain loyal over time. And that’s something that midsize banks can use to their advantage.
Investing in innovative technologies to improve efficiency
Midsize banks don’t have resources to waste, so investing in the right tools and technologies is critical. For midsize banks, it isn’t about the flashiest new VR/AR capabilities or launching a brand new blockchain token. Smaller banks are better off focusing on proven technologies with the most significant potential business impact, focusing on solutions for streamlining internal operations and providing a better customer experience.
There are three areas in particular that midsize banks should focus on for the biggest impact: automation, data management, and no-code digital experience platforms.
Automation can be a boon for efficiency, helping smaller banks save time and money by automating tasks like tedious data entry and analysis or even customer support inquiries with chatbots that can also provide product recommendations and other personalized services. The resources that are freed up through automation can be used to further enhance the customer experience.
Another key technology that midsize banks should focus on is data management. In order to truly personalize the customer experience, banks need to have a 360-degree view of their customers. A centralized data management solution can help smaller banks get a handle on their customer data and use it to create targeted communications and personalized experiences.
No-code digital experience platforms provide a way for midsize banks to create personalized experiences without needing to invest in costly development resources. These platforms give smaller banks the ability to quickly create and deploy digital experiences that are tailored to their customers’ needs.
With a no-code platform, midsize banks can create prototypes to test new ideas and launch new digital products and services quickly and easily, keeping pace with the bigger competitors.
Midsize banks may mistakenly believe that these technologies are out of reach because they don’t have the resources to develop and maintain them internally. Yet that is far from being true. By adopting a no-code or low-code platform and partnering with a variety of fintech vendors, they can implement these technologies quickly and efficiently, without the need to build teams or expertise in-house.
Midsize banks can compete with the right platform and strategy
Digital transformation in banking is an ongoing process—a journey rather than a destination. Customer needs change, and technology develops over time, so banks of all sizes, need to continuously update and improve their digital channels, adopting a true digital mindset.
Midsize banks actually have an advantage when it comes to agility—they can implement digital transformation initiatives more quickly and efficiently than larger institutions.
Taking a customer-centric approach and investing in innovative technologies will help midsize banks offer a digital experience that meets the needs of today’s consumers and keeps pace with the big players. Automation, data management, and no-code digital experience platforms can be key to achieving that goal. By investing in these innovative technologies, midsize banks can provide a better customer experience and improve their bottom line.