When it comes to building an image as a leader in the post-pandemic world, the foundation for success is the same as any healthy, long-lasting relationship: respect, communication and trust. Banks must center these vital needs in every interaction they have with their customers to cement their reputation and grow in their markets.
Prioritizing respect, communication and trust with customers may seem basic, but, for many banks, meeting these needs in a consistent manner in any economic environment requires new ways of approaching people, processes and technology. These mindset shifts are necessary hurdles to address before banks can make smart investments in new tools, hire the right people and develop better customer experiences across multiple channels.
During Temenos Synergy 2020, we heard from several Temenos customers about the mindset shifts they have made to become more nimble, agile and efficient leaders for their customers. In the following article, they share the growth that has followed successfully shifting their culture to meet the changing expectations customers have around digital accessibility, process efficiency and communication.
Embrace the Need for Speed
A huge part of what creates a feeling of respect for customers is showing respect for their time. Banking customers have exceptionally busy lives, between juggling family, work, chores, errands, hobbies and more—no matter how much they do, there always seems to be more left to complete. Any activity that disrupts the flow of their many routines and responsibilities has the potential to become a source of frustration, especially if it seems unnecessarily difficult or time-consuming. Banks face the uphill battle of being compared to other digital consumer experiences, such as online shopping or submitting insurance claims via a smartphone app. These other industries have mastered the art of a quick and efficient experience, and the average consumer may not understand the complexities of the behind-the-scenes work required to apply the same techniques to digital banking.
An important aspect of making banking fast and easy for busy customers is a technology framework that facilitates flexibility and agile iteration by streamlining back-end processes. For example, a Temenos commercial banking client wanted to prioritize digital onboarding and enable customers to open and fund new accounts in less than 10 minutes. To accomplish this, however, they realized that they needed a platform that was flexible enough to respond to changing market needs while also delivering a tailored, great experience to customers.
With Temenos, the client created the fast account onboarding experience their customers wanted and seamlessly enabled API connectivity for nearly every aspect of the account opening function—something that had not been possible with their previous technology. By prioritizing the customer experience and automating as many of the steps as possible, they were able to launch a smooth, quick account opening product—as well as an additional three products—in five months.
Stop Thinking That “Agile” Means “Chaotic”
Speaking of speed, a hugely important aspect of building strong customer relationships relies on how quickly banks can respond to market pressures and changes. As evidenced by the pandemic, a lot can happen in a short amount of time, and day-by-day policy changes can have significant consequences for consumers, small businesses and banks alike. Responding to rapidly changing needs requires agility, both in mindset and in processes, something that many banks have resisted for a long time, assuming that “agility” was only for new, nimble tech startups and other disruptors.
Nothing could be farther from the truth: agility is an essential element for any bank who wants to be seen as a trusted advisor to confused, anxious or panicked customers when uncertainty hits. The importance of agility became starkly apparent when the federal government announced the Paycheck Protection Plan to aid small businesses. Banks were given four days to prepare for the loan program with rapidly changing information. Many moved too slowly to help their customers take advantage of the program before the funds were exhausted, and others chose not to participate at all.
Despite the massive undertaking, another Temenos banking client knew they could not miss the chance to participate in the program. Without much guidance from the SBA, they moved away from their usual waterfall-based strategy and towards an iterative agile strategy that could be quickly tweaked and adjusted as more information became available. With four days to spin up a frictionless application, their team set up conference calls from 7am-12midnight to get an MVP that was easy to use and functional enough to get small businesses through the process. The ability to shift into an agile mindset and move this quickly was enabled by their relationship with Temenos. By using the cloud-based onboarding platform, Journey Manager, and open APIs for integration into the SBA platform, they were able to get an application up and running in less than a week.
This move towards agility has accelerated other changes within the client team and caused them to take a broad look at other ways digital enablement can help them deepen the relationships they now share with these small businesses. Many other financial institutions have accomplished similarly impressive things and moved faster than they thought they ever could to help their customers. Realize that you can change quickly when needed, capitalize on the momentum gained during 2020 and embrace change as a natural part of growth.
Embrace the Efficiencies of the Cloud
As banking marches steadily towards being a nearly 100% digital, remote experience in the coming years, customers may not ever have the need or desire to step into a physical bank branch. They may not have a single teller or advisor or loan officer with whom they feel a connection—rather, they will be looking to form a strong relationship with the overall brand of your bank. For many customers, an increasingly important aspect of building a brand connection is affordability and knowing their bank of choice is not trying to “nickel and dime” them.
As low-cost and totally free checking, high-yield savings accounts and even cashback/high interest rate checking becomes more common, customers are becomingly increasingly turned off by fees, checking minimums and other revenue-generating practices that were standard in past eras of banking. How can banks meet these expectations for essentially free banking without taking a serious hit to profitability?
For many institutions, the answer lies in the cloud. Fully-digital banks like EQ Bank and Varo Bank pass on the huge cost savings associated with operating 100% in the cloud to their customers by offering high-yield savings and checking, affordable credit and other attractive low- and no-cost products.
“By leveraging the public cloud, we can scale elastically with business volume and reduce costs for deploying new products,” said Dan Dickinson, CIO of EQ Bank. “Using Temenos Transact in the cloud enabled us to keep up with demand as we grew more than 80% in 2020 alone. It also allowed us to quickly add market-leading functionality for our customers—we went live with a fully-integrated international money transfer function in partnership with TransferWise in just a few months.”
As the banking industry competes with lean-running fintechs, embracing these efficiencies and moving towards a cloud foundation for operations also means exploring the idea of open banking. As open-API platforms become more robust and secure, banks like EQ and Varo are getting ahead of competition by building partnerships with them or offering better alternatives.
Fuel Your Digital Strategy Now to Keep Up with Future Demands
Now that digital banking has become inevitable and necessary, customers want to build a relationship with a bank that respects their time, responds to changing economic pressures quickly and opens up paths to financial stability and wellbeing. Banking customers trust the financial institutions that meet them where they are and provide peace of mind in uncertain times. Banks who had already taken steps to build the infrastructure and processes needed to provide excellent digital experiences have weathered 2020 exceptionally well, but banks who may not have had the same head-start still have a the chance to make these mindset shifts and become trusted leaders in the industry.
Want an even deeper dive into the cultural and operational shifts that today’s banking leaders are making to accelerate growth in 2021? Check out the rest of Synergy’s 40+ on-demand sessions for additional insights from Temenos customers.