As March rolls on and we slowly creep towards Spring, banks and credit unions are starting to hit full stride and making real progress on the goals they’ve set for themselves in the year ahead.
Of their top concerns and priorities for 2020, growing deposits, improving the customer and member experiences, and cutting costs around efficiency were top of mind for the 300 senior bank and credit-union executives Cornerstone Advisors surveyed for their annual outlook study. This year, about 73 percent of respondents reside in the C-Suite or higher.
Here, we take a look at some of the most important survey results and try to provide a bit of context to the larger industry trends at play.
Growing deposits is a top priority for 41 percent of banks and 49 percent of credit unions in 2020.
This should come as no surprise to close watchers of the banking industry over the last year. As we’ve covered in the past, nearly 74 percent of banks are seeing a shrinking number of relationships on one or both sides of their balance sheets. Given the heightened focus of growing deposits for credit unions, one can assume a similar trend for these financial institutions, as well.
A consistent response we’re seeing across banks and credit unions is to partner with fintechs on digital account opening solutions to help address the current trend. Already, a third of all bank respondents reported having partnered with a fintech to address digital account opening, with another 31 percent intending to establish such a partnership within the next 12 months. For credit unions, nearly 40 percent already have partnerships for digital account opening, with an additional 30 percent planning on doing so in the coming year.
Improving Customer and Member Experiences
A whopping 77 percent of banks and 81 percent of credit unions say improving the customer experience and improving the member experience are very important to their institutions in 2020, respectively.
The main reason financial institutions are so hyper focused on customer and member experiences is because these two areas represent the main points of disruption in the banking industry. Digital-first challengers in the form of Big Tech companies, Alt Lenders, and Megabanks have deployed technologies that put speed and convenience at the forefront of the customer experience, and that has allowed these challengers to deftly capture market share as a result.
To survive the digital age and ride out this wave of disruption, banks will need to find ways to match the speed and convenience of their new competitors. Unfortunately, without the budget and resources of a Wells Fargo or Bank of America, community and regional institutions will need to rely on partnerships. It’s part of the reason 65 percent of banks and 76 percent of credit unions see fintech partnerships as critical to their business strategies this year.
Eliminating Efficiency and Non-Interest Expenses or Costs
If there is one thing banks and credit unions can agree on, it’s that they’re not running nearly as efficiently as they could be. In fact, efficiency and non-interest expenses or costs are a top three concern for both in 2020.
Of course, this tracts with other trends we’ve discussed in this post. As consumers prioritize speed and convenience above rates and service, for example, it’s common banking tasks like filling out applications, waiting for credit decisions, and opening new deposit accounts that are sending businesses and customers into the arms of their digitally-mature competition.
Becoming more efficient at identifying new and existing customers’ needs, and delivering against those needs, doesn’t just help free up important resources and reduce costs, it also helps banks and credit unions compete in the digital age.
Deploying Data and Technology to Eliminate Concerns and Advance Priorities
Growing deposits, improving the customer and member experiences, and eliminating inefficiencies will require financial institutions invest in the kinds of data and technology that will help them provide fast, convenient, and consistent buying journeys.
And, as the overwhelming majority of banks and credit unions understand, they won’t be able to build these capabilities in house.
Numerated partners with banks and credit unions to help make business banking easy, and we’ve recently expanded our platform to include digital account opening, business credit cards, and more.
The best way to learn more, is to watch our on-demand webinar, where you’ll get to see eight different business banking products, supported by our platform, in under 20 minutes. Watch the webinar today.