Transforming the Digital Landscape: Insights and Opportunities for Financial Institutions

“A banking executive is going to have maybe a very different experience personally than the 73 year old grandma who's a member of that credit union. And the moment you can break that barrier of perception and get them thinking along the lines of the member base of the customer base, that's when you're actually going to start to see impactful changes being implemented.” -Nick Belesis

Different banking segments are certainly moving faster than others in transforming the digital landscape, like with subscription-based financial services. If financial leaders want to keep up, they need to alter their perception of change. 

Nick Belesis, VP of Growth at Fintech Insights by Scientia, joined the Banking on Digital Growth Podcast and believes it’s time for traditional banks to take the handcuffs off of their digital apps and give clients human-centric service. 

Creating Space and Time: Navigating the Digital Landscape in the Financial Industry

Credit unions and community banks are facing significant challenges, running on legacy platforms and struggling to identify the correct technology partners to best serve their members through digital channels. The pandemic has highlighted the need for these institutions to prioritize digital services, which were previously seen as an afterthought.

In the research Nick and his team conducted, they found that the biggest gaps are in wealth management in junior accounts, with crypto trading being one of the most significant areas of concern.

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While some credit unions and regional banks have implemented the ability to trade cryptocurrencies, they have struggled to keep up with the fintechs and super apps that are providing banking services and adding extra features like wealth management and trading.

Nick believes that the technology infrastructure and a lack of understanding of their customers' needs are the primary reasons for these gaps. As fintechs and super apps continue to penetrate the market and specialize in niche functionalities, credit unions and community banks must identify and prioritize their members' needs to stay competitive.

Exploring the Concept of Super Apps in Digital Banking

So what exactly are super apps?

Nick explains that they are essentially apps that offer more than just standard banking services. He uses the example of Revolut, which not only offers checking and savings accounts, but also has subscription-based services for travel insurance and even winter sports insurance. These added services are outside of the traditional digital banking scope, but are packaged together in a single app to make life easier for users.

James Robert sees subscription-based services as a growth opportunity for traditional financial brands and a chance for these brands to differentiate themselves and reinvent their products.

Think about other areas where subscriptions could create value beyond what we typically associate with financial services. Nick suggests looking into features and functionalities from the hospitality sector, such as loyalty points and integrated booking systems.

Overall, the possibilities for super apps and subscription-based services seem endless. As Nick says, it's all about finding the right partners to maximize growth and exposure in whichever segment you're targeting. With the rise of super apps, it's clear that digital banking is evolving and there's no telling where it will go next.

Bridging the Gap between Technical and Human-Centric Approaches in Banking

As technology continues to advance, the gap between traditional banking practices and user experiences is becoming more apparent. Many traditional bankers are left-brained, analytical, and focused on following rigid regulations. However, user experiences are emotional activities that require a more human-centric approach.

Nick points out that there may be a gap between the technical aspects of banking and the more human-centric approach needed to reduce friction in customer journeys. While regulatory compliance is necessary, there are often simpler ways to improve the onboarding experience for customers. 

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Reducing friction is crucial to keeping customers engaged. James Robert noted that for every 10 seconds added to a user's experience, the abandonment rate of an application increases exponentially. There are so many opportunities to reduce friction while remaining regulatory compliant, such as improving ID verification through advanced implementations like face identification.

Despite the benefits of reducing friction and improving user experiences, many traditional bankers are hesitant to adopt new technologies and practices. James Robert often encounters executives who are unaware of the latest developments in fintech and have never even gone through the application process at a neobank or fintech company. To bridge this knowledge gap, it's essential for leaders in the financial industry to stay informed and open to new ideas and technologies that can improve their customer experiences.

The Importance of Competitive Benchmarking for Business Growth and Transformation

Do you want to gain an edge in the marketplace?

Well, an ongoing competitive analysis is key.

It provides a tremendous opportunity to help you become aware of what's happening in the real world. While it's one thing to talk about it and show screenshots, it's another to experience it yourself.

However, the challenge is that you may be opening accounts with various organizations and financial brands, both locally and globally. If you try to open an account in another region, and you are not a resident, you may not be able to do so. Additionally, there may be a limited field and perspective in terms of who you are looking at, and eventually, many may start looking the same.

To get a comprehensive understanding of the marketplace, you need a widespread of different institutions, from the largest incumbent players to some of the innovators in the FinTech space, to even the regional banks and credit unions. These organizations may have unique features and ways they've implemented UX to potential customers.

When someone sees something different, they begin to think differently. But what happens next? To change someone's perspective, they need to walk a mile in that individual's shoes.

An executive may have a very different experience from a 73-year-old grandma who's a member of that credit union. Once the barrier of perception is broken, and executives start thinking along the lines of the customer base, that's when impactful changes can be implemented.

The Future for Financial Brands: Opportunities and Hope for Digital Experiences

Financial technology is a constantly evolving field that provides new opportunities for growth and innovation. Digital experiences could be optimized to guide people beyond financial stress and frustration.

And as the world becomes more connected and digital, the opportunities for financial freedom and the creation of a greater global financial community are increasing. One way that financial brands can take advantage of these opportunities is by using blockchain technology.

Blockchain is an exciting technology that presents a lot of potential for the future of financial services. Although it can be confusing to some financial brand leaders, its potential for growth is massive.

Blockchain and Web-3 are the next big things to build on and offer endless opportunities for growth. Nick notes that blockchain presents a lot of opportunities for automation, especially for mortgages and smart contracts. It will allow businesses to organize millions of data points, identify risks, and assess credit at a high rate. It can also help identify higher levels of risk and increase success rates on payments. For Nick, the real opportunities are in the extra added services in blockchain and smart contracts.

To succeed in the ever-evolving field of financial technology, you must be a lifelong learner.

Alvin Toffler wrote, "The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and unlearn."

This means that we must approach every day with a learner's mindset and constantly gain insights from the market.

Nick advises financial brands to start by knowing themselves first and foremost. They must understand where they sit within their marketplace and the greater marketplace. Then they must understand what is expected of them from their member and customer base before deciding where they want to be. These three questions will lead to simple answers and simple steps forward to achieve growth and transformation.