Sourcing the Next Generation of Digital Banking, Part 2

Posted by Michael Carter on May 15, 2018 9:00:00 AM
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Last week, we presented the first half of two key considerations for how a bank or credit union committed to a mobile first strategy can best stay current in offering state-of-the-art mobile services.

If an institution is not counted among the largest of FIs, answering this question will likely involve evaluating an array of options to determine which best fits a bank or credit union’s goal. This environment is different from what has been seen in the past where a few very large providers controlled most of the offerings. This gives FIs of every size the chance to shake free of the constraints of legacy third-party solutions and become competitive again.

Let’s delve a bit deeper into what that exactly means.

The Consumer Push and Pull
The trend toward collaboration among fintechs and FIs also brightens the outlook for small and mid-sized banks and credit unions. The notion of disruptive startups barreling in and stealing bank customers has largely receded (though it is still strong in select areas, such as loan origination). While a few challengers remain, the makers of most specialty solutions realize they need distribution to succeed.

FIs cannot only scratch that itch, but also provide them a critical compliance infrastructure and a stable balance sheet. Of course, thorny questions like brand primacy and economic terms remain, but the opportunity to gain access to a customer or member base that trusts their bank or credit union provides significant negotiating leverage.

As you look into augmenting digital banking features and start evaluating partners most capable of providing such functionality, consider another finding from that Harris poll: one of the most eagerly awaited additions to mobile banking (for 31% of digital users) is the ability to interact through voice commands. This typically means a “pull” model, i.e., the account holder asking for information. However, there is an even greater opportunity for achieving a competitive advantage when “push” functionality is considered.

Picture the convenience that could be delivered, for instance, under this type of use case where a virtual assistant on a mobile device asks the end user – at the appropriate time and place (so, not when the consumer is driving 70 MPH on the freeway) – “I’ve noticed you normally make your auto loan payment at this time each month. I’ve already set it up, would you like me to send it for you? If so, please authenticate with your voice.”

There is a new generation of digital players that can deliver such services to consumers. The key is finding the fit that is right for you. Consider a firm that can assist with the entire process, from assessing where a FI is today to developing a digital transformation strategy that provides a map for the future, and helping evaluate vendors and then negotiating a contract with the partner that is chosen. The terms and pricing offered by these firms are designed for all types of institutions and can make a material difference in their digital futures.

Topics: Technology

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