If it feels like it’s become more difficult for your bank to grow, you’re not alone.
According to a recent analysis of SNL data, upwards of 74 percent of banks are seeing relationships shrink on one or both sides of their balance sheets, making growth an industry-wide struggle.
These headwinds, as many a bank director will attest, are mainly attributable to new competition and shifting customer expectations that no longer align with traditional inbound banking models. As Big Tech companies like Amazon and fintechs like OnDeck use data and technology to steal market share from regional and community banks, it’s now clear that it will take similar proactive business development to compete and survive.
Traditional financial institutions have largely stayed away from this kind of outbound strategy, opting for an inbound approach that heavily relies on their branches’ physical locations and their ability to generate foot traffic. That’s largely because the kind of proactive business development their competitors are conducting is time consuming, resource intensive, and inefficient.
However, by investing in the right data and technology, financial institutions can eliminate the obstacles that create inefficiencies in prospecting, making outreach easier for their bankers and allowing them to grow business once more.
3 Ways The Right Data and Technology Helps Banks Grow Through Prospecting
Prospecting is one of the most labor-intensive activities for which bankers are responsible.
For example, in the state of Massachusetts, there are about 1M registered businesses. However, only about 18 percent of those businesses fit into the parameters of a conservative credit policy. Bankers tasked with prospecting in this state are charged with figuring out which, out of the million businesses, fall into that 18 percent bucket.
Then, even after this hard work is complete, bankers still need to match the right product to each prospect and initiate outreach.
Without the right data and technology, we’re talking about a process that can end up dominating your banker’s day and hamper their business development efforts. However, by investing in digital tools that make prospecting easy, financial institutions can:
- Put the Bank’s Credit Policy to Work: Banks have spent years and countless man hours developing, adjusting, and perfecting their credit policies. So why aren’t they putting them to work? Today, banks can invest in technology that digitizes their credit policy and allows them to do underwriting and pre-scoring in advance of their first touch with a potential customer. Some technology even allows banks to underwrite every business in their footprint on a nightly basis, making it possible for bankers to search for eligible businesses through intuitive and familiar interfaces.
- Make Their Bankers More Efficient: On average, only about 20 percent of a state’s businesses will be eligible for a conservative credit policy. Bankers who can’t identify that 20 percent of eligible businesses will inevitably be left in a call-and-pray model where underwriting can’t take place until after initial outreach has concluded. Processes like these don’t inspire bankers toward outreach, they actively repel them. However, when bankers can simply search for businesses and rely on technology to provide eligible prospects, it changes bankers’ perspective on outbound strategies. With the right data and technology, bankers can be assured that their time spent in prospecting won’t be time wasted, freeing them to work more efficiently and spur growth.
- Help Bankers Better Understand Current Customer Needs: The right prospecting technology should work on two levels—potential customers and current customers. Traditionally, bankers have limited insight into current customer needs and often have to rely on awkward check-in calls to access that information. However, industry-leading prospecting technology can also incorporate core data and be used to identify current customer needs. For example, on average, 17 percent of a bank’s customers will have outstanding loans with a competing financial institution. The right prospecting tool can help bankers quickly identify those customers, and gives them the insights they need to win that business back. This helps bankers have better, more valuable conversations that lead to expanded relationships.
Investing in Prospecting Is the Fastest Way to Get Your Bank Growing Again
As banks struggle to return to organic growth, it’s becoming more evident that accomplishing this goal is contingent on their ability to provide the kinds of experiences today’s customers have come to expect.
A lack of time and resources, means that banks can’t build the technology they need to be competitive in-house. And, as we’ve written at length, banks can’t risk attaching themselves to black-box solutions.
Partnering with a bank tech provider is the most efficient way forward, and technology like Real-Time Prospecting offers the fastest way to get modern digital tools in your bankers hands, and to get your bank, as a whole, growing again.
To learn more, sign up for a Real-Time Prospecting demo, today!