Digital Banking Litmus Test: Success with PPP

Is your Financial Institution Digitally Prepared?

This is a very simple test. Did your Bank or Credit Union have an automated PPP Loan approval process that connected the front-end to the back-end including SBA, live in two days or less? If your institution did, your digital banking ecosystem is adequate. If not, you are behind, but catching up is not difficult as some may think. Here are 5 steps to delivering a successful digital banking experience:

1) Need balanced leadership that has both business and technology experience

One of the most critical components of a digital banking strategy that often gets missed is ensuring efforts are led or include individuals that have strong knowledge of banking and technology. A recent trend by Financial Institutions is to hire technology experts outside the banking industry or leverage consulting firms where no one has real life banking expeirence. It is advantageous to get an outsider’s perspective, but it needs to be paired with someone that has a strong understanding of the bank’s client experience. Executives, managers, even bankers themselves are not keeping up on innovative trends. Most probably don’t even know what their clients are focused on. This is why just hiring an innovator within the IT department is problematic. Banks and Credit Unions have a strong leader with banking acumen and technology knowledge to lead. This ensure the institutions meet the needs of their clients and associates without creating major gaps. Most have failed to make this a priority.

2) Targeted goals and objectives

It is easy to identify that a Financial Institution needs a digital upgrade. What is difficult is determining what goals and objectives an organization wants to achieve. It cannot simply be “automated” or “digital”. Banks and Credit Unions must define who their clients are and how a digital delivery will improve experiences for all. Specific metrics must be the foundation to ensure an institution has a direct measurement to evaluate progress. For instance; time it took to complete a back office task, online account opening, loan application submission. Objectives should focus on client and associate experiences. Make processes easier and effective that drives user satisfaction.

3) Define the right Tech Stack

Another important overlooked component of a digital banking strategy is the right Tech Stack. Many Banks and Credit Unions have Teck Stacks that can run into the hundreds of applications or more. It does not have to be this way. An institution must evaluate each application carefully. Often numerous applications share similar functionality eliminating redundant solutions. If a Financial Institution narrows and maximizes its Tech Stack, it can deliver a complete end-to-end digital banking solution with 6-10 applications. Having the right mix of solutions that compliments the institutions strategy is critical and will make the transition easier.

4) Centralized engagement tool

A successful digital banking delivery is only possible if an engagement tool, like a Client Relationship Management (CRM) platform is at the center. Digital experiences cannot only be for the customer. If Banks and Credit Unions continue using manual disparate back office systems while harnessing digital solutions their efforts will fail. CRMs bring all important data to a singular system that all participants can digest. This ensures the left hand of an institution knows what the right hand is doing and puts value on all interactions. The right data gets streamlined, informing the right people to execute their roles more effectively. When a CRM is part of a digital strategy a true 360 view of the client is achieved.

5) Make customers part of the solution

Surprisingly and sadly most digital banking strategies do not include engaging the client. No matter how experienced a Financial Institution believes they are it will never substitute for direct feedback from a customer. Most Banks and Credit Unions do not have a good handle on who their clients are and how they operate. These institutions have been focused on risk management for most of their history, leading with regulations and not innovations. It is imperative to hear the client’s story to mold a digital strategy based on the client’s needs now and in the future. By capturing the customer’s point of view increases engagement and adoption. This creates marketplace advocates that will become great referral sources.

The COVID pandemic and the PPP offering should be a great opportunity for Financial Institutions to evaluate their digital readiness. Much can be done to correct but the right steps must be taken. Be vulnerable not prideful to understand the changes that must be made to excel in a digital age. With the right leadership, well defined plan, and great execution a digital banking solution will succeed.