Going green is not only good for the environment, but it can be good for business too. Developing a ‘Green Niche’ strategy to highlight ESG initiatives can help attract new, socially-conscious customers. It can also be used to help extend a bank’s current geographic reach through virtual bank initiatives.
Customers want budgeting and financial management tools to help them improve their financial health. Offering interesting, visually-appealing apps with easy-to-use functionality is important, as is providing individualized communications to customers on how best to use them.
Chase created a digital-only bank in the UK, attracting over $10 billion in deposits in less than a year. The branchless operation has a single customer contact center in Scotland. The success of this start-up operation in the tough UK digital banking market stands out in contrast to the abrupt closure last year of their Finn digital bank in the US. The UK operation was supported by a massive investment in new technology and is not expected to break even until 2027 or 2028.
Shifting from a focus on customer satisfaction, banks are starting to direct innovation investments toward digitizing back-office systems and processes to generate greater efficiencies. To be successful financial institutions need a dedicated, cross-functional team to implement innovations and a well-defined innovation strategy. “The reality is that without upgrading and innovating back-end systems, such as modernizing a core banking platform or moving data to the cloud, it can be difficult to support game-changing customer-facing programs.”
Apple Pay Later, the new BNPL service from Apple will launch this fall with some interesting features that will likely help extend their entry into the financial services world. There is also talk of them issuing a decoupled debit card that could link to any existing checking or savings account through ACH.
