Reputation. It’s the single most important factor for any organization and should always be a key consideration for financial institutions evaluating any strategic, operational, and technology initiatives.
The fast-evolving landscape is creating opportunities in myriad areas, including exciting initiatives on digital assets, instant payments, artificial intelligence (AI), and Buy Now, Pay Later (BNPL) – just to name a few.
The challenge for innovative banks and credit unions involves discerning between “shiny objects” – trendy fads that garner big headlines – and upgrades that truly add value, improve the client experience, and ultimately maintain and improve an FI’s status with customers. It is equally important to ensure that, reputationally, FIs focus on the effective implementation of change plans and, most importantly, their relevance to customers.
The strategic focus must remain on how customers engage with their financial institutions and what they need. You then build the processes and technology around the services that they require.
I will avoid passing judgment on any specific change or technology initiative – what might be ideal for one FI could be a detrimental distraction to another. I will, however, share my thoughts on what to look for when you view changing your proposition offering through the prism of your long-term strategy.
Understand your customer: Misalignment often happens when an FI fails to grasp the customer journey – how they want to engage and how it will evolve over time. Brand image and brand value serve to attract a target market; product propositions should reflect that.
Stay true to your values: Set a firm scope and avoid mission creep, where slight veering can eventually take you off course. Partner with suppliers and vendors that share your values – anything less could harm your reputation over the long run. Make sure that your partners prioritize customers and their needs, operate within your regulatory parameters, and stay on the same page in terms of placing positive outcomes ahead of function.
Don’t get stretched thin. Focus on a handful of projects – ensure they are prioritized and ‘green-lighted’ based on their strategic value or regulatory need. Make sure a new product or solution functions as intended, and the customer experience is prioritized and delivers high-performance outcomes before adding any glitzy enhancements.
Remember the long game. Market conditions will ebb and flow. Demand for certain products will rise and fall based on factors such as interest rates and the overall economy. Resist the urge to make a knee-jerk reaction when it comes to pursuing or exiting certain products or markets.
The Bottom Line
Transformation, and particularly technology enhancements, are coming at us fast and furious. While you certainly want to avoid missing out on game-changing products and services, there is no harm in waiting to see how early adopters navigate the regulatory and reputational implications of innovative offerings. Be true to your mission and customers’ needs – that is what will be the true difference maker over the long haul and serve to protect and enhance your market reputation.