Before the turn of the century, the greatest value proposition offered by banks was the ability to connect with banking professionals and conduct all kinds of financial activity at one’s local branch. From weekly deposits, to customized consultations for small business loans, community connections and a personal touch helped banks foster meaningful relationships with their customers that spanned decades.
Today the banking landscape looks very different, with all kinds of financial services available at one’s fingertips through any mobile device. Apps like Venmo have already captivated younger customers, and companies like Apple and Google continue to encroach into bank territory by offering proprietary payment solutions, finance apps, and even their own credit cards.
At the far end of the spectrum, technology behemoth Amazon is essentially creating a closed loop of financial service offerings. Amazon’s footprint in the space so far includes its own small-business lending division, Amazon Pay, and of course, AWS – not a finance platform at all, but the largest cloud services platform used by many of the world’s top global financial institutions.
How are banks to respond? Large banks have the budgets to implement massive IT infrastructure changes in order to adapt to a globally connected economy, but community banks don’t always have that luxury. As large banks digitize, however, they tend to offer more of a one-size-fits-all approach to finances; and that doesn’t always work for every consumer.
Household names like Netflix and Amazon have permanently heightened expectations for seamless digital service, but consumers are ultimately open to the best possible service. Consumers respond favorably to financial products from alternative providers because they offer innovative digital experiences, but studies show consumers still prefer banking with a human touch.
The biggest differentiator for community banks in the current landscape is the original value-proposition: a connection to local communities that enables personalized service and more meaningful customer relationships. With this goal in mind, the right digital solutions can help community banks leverage their greatest strength – those personal customer connections – and cultivate them through the digital devices their customers use the most.
For example, mobile apps, chatbots, and voice technology present new opportunities for community banks to increase digital engagement through popular emerging channels. With the right technology, community banks can continue building those personal relationships long after customers leave the local branch. It also enables banks to reach customers anywhere and anytime on the digital platforms their customers are already using.
Community banks may not have the same resources as their much larger competitors, but they can take a strategic approach to implementing technology that increases efficiency as well as customer satisfaction. Giving customers access to the digital tools they demand not only enables community banks to keep up with large bank and tech rivals, but also to go above and beyond customer expectations by offering added value through more personalized service.
Consumers now expect a seamless digital experience from every product and service they use. This can present a challenge for community banks as competitors entice consumers with innovative new technology, but successful digital transformation is possible for small regional and community banks too. Smaller financial institutions can offer their customers the same level of digital service by implementing smart, tailored technology solutions that solve the most pressing customer pain points while reducing organizational strain. Automation, the latest payment options, and better digital engagement can all help community banks strengthen relationships with customers and continue to thrive in a digitally connected world.
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