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Transitioning to Digital: How Community Banks and Credit Unions Can Keep Up With the “Big Guys”

July 2nd, 2023

Although the COVID 19 crisis sped things up, financial institutions were already moving toward implementing more and more digital products. As a response to customer demands, it’s a solid plan for staying relevant and continuing to thrive in the 21st Century under any circumstances. Unfortunately, community banks and credit unions often feel at a disadvantage in the tech field when it comes to competing with the Big Guys. Your institution doesn’t need to have an extensive tech R&D department, however, to go digital and go head to head with larger, corporate banks.

Keep It Simple

First of all, the simplest approach is typically the best, and community banks and credit unions have the advantage over larger banks in this area. Huge conglomerate banks tend to have complicated infrastructures made up of sometimes hundreds of different divisions and departments that all operate in silos. But, since smaller institutions are leaner and inter-team communications aren’t as complicated, they’re positioned to transition to an AI-centered operating model more easily. With this in mind, banks and credit unions can keep it simple by keeping the focus on that one strategy of integrating information and analytics and implementing the same software across your organization. These things can unfold gradually, and as budgets and time allow.

Regardless of size, however, transitioning to digital takes a shift in mindset. Big and small institutions alike can’t force old square processes into the new round hole of the digital “new normal”, yet financial institutions typically start with the processes and tech they have on hand and try to mold the customer experience around that. In this case, keeping it simple involves looking at customers’ needs first and determining what capabilities your institution has that can meet those needs to create an ideal customer experience. If you’re missing a few pieces to the digital puzzle, even then avoid going back to existing processes. Instead, look into the resources available to you that others have developed.

Available Resources

Community banks and credit unions don’t usually have the IT budgets the big banks do, but that doesn’t mean the advanced technology isn’t available to you. Thanks to fintechs, many of the tools customers want as well as ones you need internally already exist. By collaborating and partnering with fintechs, you can implement those tools and be on the cutting edge when new tech is developed. Even the Big Guys aren’t above partnering with fintechs, and you can use their example but on a scale that fits your institution. That means starting out with adopting technology already in use, but also investing, when possible, in fintechs that have similar visions and direction as your institution. Approaching the digital transition in this way puts your community bank or credit union on the same playing field as bigger banks while controlling IT costs.

Also, don’t overlook the experts on your team as available resources. More and more, the hiring pools are filled with people who have wide-ranging experience as well as specialized capabilities. If you haven’t already started bringing people with technology backgrounds onto your team, do that now. Your transition to digital will benefit from people who have analytics, data sourcing, and processing experience as well as financial and banking experience.

Delivering for Your Customers and Members

Remember what we said about starting with the customer experience and building from there? That begins with finding out what your customers want and need—most times, even before they know what those things are. As it turns out, that’s the easiest part of transitioning to digital, especially when you have Avannis on your side. We provide you with proven tools including customizable surveys and reporting systems designed to identify customer concerns and needs. What’s more, you’ll also have the advantage of our more than 20 years of experience measuring and interpreting data. The transition to digital will unfold organically when your strategic goals are aligned with providing what customers need. Contact us today to learn more about how we can help make your transition to digital practically seamless.