Is a mobile-first banking strategy making the company vulnerable to having its customers picked off by more sophisticated bank and fintech competitors? That’s the thesis being presented by a consulting firm that specializes in working with banks on issues related to branch design. Potential bias and contradictory statistics aside, there’s no disputing the idea that if a customer has a problem or question many of them will want to be able to easily reach a human being. This makes humanizing the digital experience a priority. One way to do that is by integrating video/chat/text capabilities into customer-facing technologies to foster the same empathetic experience that customers receive through physical channels.
It might seem counter-intuitive to cite Elon Musk as an example of good management practices given all the current headlines about the Twitter dumpster fire. But it could be premature to dismiss the man who was behind the vision and success of both Tesla and SpaceX. Three lessons that might be derived from his Twitter take-over include the need to:
- Inspire urgency and create a sense of mission
- Lead performance by creating clear expectations of employees (while also meeting their needs)
- Use innovation to help attract, retain, and cross-sell customers
But keep in mind that poor execution can undermine all of these values, as may well turn out to be the case with Twitter.
Embedded banking can allow financial institutions to provide financial products and services through non-bank, third-party partners. This technology can help companies expand into new markets, acquire new customers, and increase deposits in today’s competitive market. Smaller organizations may view embedded banking as too complex and expensive, however, a recent study noted that 70% of banks currently using embedded banking have less than $10B in assets. As consumers demand more integrated experiences and technology costs continue to fall, embedded banking could become an important new revenue model.
Digging deeper into the embedded banking model, there are many potential companies that a financial institution might partner with to embed their financial services into the partner’s mobile or online banking software. These could include home improvement companies, solar panel installers, utility companies, wedding planners, and medical/dental practices to name just a few. It’s important to bear in mind that these partnerships will be an extension of your brand, and regulators will look to see that the bank is ensuring that partner companies are using its products and services appropriately.
Financial institutions should be factoring ‘green lending’ into their business plans according to a McKinsey report. The firm anticipates that sustainable finance will become a major focus going forward. It will be spurred by the implementation of the Inflation Reduction Act which will create opportunities in many areas. Examples could include EV charging station financing, green mortgage loans for the purchase of energy-efficient homes or finance energy-related improvements, or fleet financing for companies that want to bring in more fuel-efficient vehicles. Banks and credit unions should be working now to position themselves to take advantage of this coming wave of new business activity.
