Each month, we curate a list of articles within the financial services industry to help lenders stay on top of key trends in digital transformation and better understand what they mean for their institutions.
This month, we gathered four articles that highlight digital transformation in banking.
The Challenging Path Ahead for Banks in the Small Business Realm by Kevin Wack, American Banker
Today, business customers expect efficient digital banking experiences from their institutions; however for many lenders, this can be a big challenge. With non-traditional competitors like PayPal and Square continuing to build on their small business lending offerings, banks and credit unions will begin to lose customers if they fail to innovate. This article from American Banker shares key takeaways from their recent Small Biz Banking conference and what the path forward looks like for financial institutions that want to remain competitive in an increasingly digital-first environment.
4 Reasons to Build a Digital-Only Brand by Nathaniel Harley, Bank Director
Many lenders are hesitant to digitally transform their offerings due to concern that it will alter the way that their brand is perceived. This is especially true for community institutions who have yet to digitize many of their processes. In order to successfully innovate, these lenders need a way to monitor the performance of their digital transformation before introducing it to the entire brand of the institution. This article from Bank Director suggests that lenders should focus on building a digital-only brand first.
Digital Banking Transformation Requires Back-Office Evolution by Jim Marous, The Financial Brand
While having a strong front-end experience is essential for borrowers, it’s often the back-office tasks that slow down the customer experience due to the tedious and time consuming nature of legacy processes. Lenders that want to remain competitive in 2023 should be focused on gaining back-office efficiencies. When setting out to accomplish this, it’s important that financial institutions understand that back-office transformation is more than bringing technology to legacy processes. In order to be successful, they need to identify key areas that are slowing down efficiency and reimagine the processes by leveraging technology that enables them to do so. This article from The Financial Brand explains the steps lenders should take to accomplish this.
Small Business Owners Want More Advice from Banks, Study Finds by Rajashree Chakravarty
Historically, small businesses have favored traditional financial institutions due to the “white-glove” service they provide their customers; however a recent study from J.D. Power finds that the service small businesses are receiving today doesn’t quite meet their expectations. Many small business owners view their lenders as trusted advisors, and they often defer to them for financial advice. According to the J.D. Power 2022 U.S. Small Business Banking Satisfaction Study, 76 percent of small business owners reported that they would like to receive financial advice from their lender, but only 15 percent reported that they are currently receiving comprehensive guidance. If lenders want to continue to attract and retain small business borrowers, they will need to continue to expand the advisory services that they provide their customers. This article from Banking Dive explains the customer service gap that currently exists in business lending and why it’s important that banks focus on meeting these borrower expectations.