The term “digital growth” can mean many different things to many different people. But no matter the definition that a small bank or credit union takes on, many things can get in the way. 

Recently, James Robert Lay, founder of the Digital Growth Institute and host of the podcast Banking on Digital Growth, shared a “fireside chat” with Joe Welu, CEO of Total Expert, and Sam Kilmer, the senior director at Cornerstone Advisors, about how to clear obstacles to make room for digital growth. 

They had a tremendous amount of insight regarding some of the biggest digital growth opportunities they see available, very common obstacles, and best practices from industry leaders to build a foundation for future success. 

Building Lasting, Valuable Customer Relationships

Due to the COVID-19 pandemic, the financial industry has seen just about everything accelerate towards digital transformation. But Sam and Joe urged leaders not to think solely about their bottom line. 

Instead of thinking about closing more deals, securing more loans, or opening more accounts, banks and credit unions should think about creating value — and a real partnership — for their customers. It becomes about educating and empowering consumers and providing them with assistance in a brand new kind of digital environment.

Sam mentioned that in their work with several hundred financial brands a year, what he has learned is that marketing has always been one of the weaker points in banking. 

“Everybody [is] saying the same corporate squawk. That thing that we know, that we should help people, instinctively, it gets converted into, ‘We've got the best rate, check it out.’ And it doesn't translate.”

Empathy is lost in the translation.

Joe added, “we've moved beyond a product economy. One that has been commoditized. And when we see historically and we talk and we think about marketing, maybe why marketing hasn't been viewed as a strategic part of a financial brand is because marketing, up to this point, a cost or an expense center, whether that be TV, direct mail, radio, print, billboards. It's very hard to quantify that.”

In some financial institutions, marketing immediately conjures a department or a bureaucracy. It doesn't conjure a discipline, a center of excellence, or a way of doing things. Financial brands end up stuck in an organizational rut. 

But as the financial industry moves beyond a product economy, it is now moving into an experience economy that is built around systems and processes, and marketing needs to reflect that. To reflect this change, financial brands need to think about entering a knowledge economy, or an expertise economy, where the knowledge that banks and credit unions can retain and share in the marketplace will become their competitive advantage — and the ticket to developing lasting customer relationships.

One of the biggest questions financial brands will have to answer as they focus on becoming experts is how they will enable the delivery of this expertise and orchestrate their marketing and messaging to communicate this information. They must align their sales and service organizations to ensure that the consumers with whom they interact get concise, consistent, on-brand answers — ensuring that they feel taken care of.

Community Banks or Large Financial Institutions 

Sam and Joe both work with community banks and local credit unions, but they also work with some top banks and major lenders. Often, the smaller institutions will worry that they don’t have the capacity to handle something.

But in their observations?

It’s actually the smaller size of some of these institutions that really acts as a competitive advantage.  

When it comes time to make changes, like those seen over the past year or so, smaller banks can pivot much faster than the larger ones.

These smaller banks and credit unions excel because they can adapt; they are nimble. And the most well-run organizations take this information and figure out how to use it to gain a competitive edge. 

As Joe shared, these nimble organizations are asking, "How do we use this to our advantage? How do we position ourselves as that guide, as that financial partner to the consumer in these local markets? How do we put our arms around them, digitally speaking? How do we take care of them and be there for them and make them feel like we understand their needs?"

This requires empathy and understanding for what’s actually helpful for consumers, which includes the digital banking acceleration. 

Building Better Outcomes

Small banks and credit unions have more opportunities than ever before to connect with consumers digitally, thanks to things like data and analytics.

However, these figures are only effective when they transfer from something concrete to something more personal. As Joe stated, "How do you use the data in analytics and then take action on that and enable the humans that are actually advising and taking care of your customers?"

The industry is in a place where data and technology are accessible, but they need to exist to create a better outcome for the consumer — to help them make better financial decisions. 

The data and analytics made available through digital acceleration and transformation can help financial brands take a more proactive stance rather than waiting for someone to raise their hand and ask for help. Brands have the opportunity to anticipate and offer consumers informed, targeted suggestions throughout their lifetimes. 

Starting on the Path to Digital Growth

Just as no two financial organizations are the same, no two brands will be able to take the same steps towards digital growth. Each will have its own starting point and its own unique roadblocks. 

The logical first step is to take an in-depth look at the whole customer journey, at how brands are communicating with their existing customers, and search for where they can create progress. 

There’s a lot of talk around building technology ecosystems to connect with customers, and there’s a good reason for this. Robust tech ecosystems are compatible and flexible and integrate with a host of data sources and tools. This enables future growth because it enables financial brands to implement new solutions when they arise — solutions that can solve specific problems quite well and spin up quickly and deploy technology that empowers employees to serve consumers.  

What else do financial brands need to consider?

Data and technology are more than just a cost line or an unnecessary expense — they act as a lifeline, one that’s worth investing in. Mindset is so critical here because teams need to focus on more than just old-world marketing and traditional sales. IT requires a new perspective that technology enables growth.

The Digital and Human Experiences 

In this digital world, many talk of the need for newer and better technology. But technology is just a tool that connects and brings people together. The digital experience is about systems and processes. It connects banks and credit unions with leads, customers, and the larger community, which includes referrals. 

But the digital experience should also be a human one. The human experience can be boiled down to two things: help and hope, which are both multiplied through empathy. Financial brands need to consider both the technology and the human elements of their digital experience to connect with consumers. 

Historically, people get nervous about digital transformation. As Joe explained, “They get nervous about becoming obsolete.” He continued, “Certainly there are efficiencies that can be had by technology, but really where the magic is, [is in] the exponential things. The force multiplier, when you can enhance the ability for the people in your organization to connect and serve more intelligently, with more empathy. If you can empower that through technology and drive it, that's really an exciting thing to witness.” 

What’s more? 

“When people have the ability to connect and serve customers better, you're bringing out the best in them, and you're creating a better outcome for the consumer — it's a win-win all the way around.”

This all connects with the idea of expertise and empathy. Consumers don't really care about expertise unless they also experience empathy — that they know that a financial institution understands them and cares about them. 

Sam pointed out that, “Marketing does generate leads. You send out an email blast, a batch and blast maybe, which is sort of the traditional methodology for marketing. A lot of organizations, they fire an email campaign out, somebody raises their hand, it gets kicked over to somebody who then is going to engage with that consumer.”

But he continued with a new idea, “But where we see the ball dropped is then what happens to that consumer or that lead or that opportunity if they don't transact or decide to move forward right away? That's where it falls apart, right?”

This is where banks need to connect their digital and human experiences. Small banks and credit unions may take as many as five days to follow up with a consumer. When compared to larger FinTech brands, who follow up in 24 hours or less and continue their efforts through an automated workflow for the next few months, smaller banks have an opportunity to further weave together their digital and human experiences. 

As Sam shared, “The good news is for many organizations, there are some pretty simple things that they can put in place from a process and a technology standpoint, to incrementally improve in that area pretty quickly.”

Many organizations have a very distinct transition when a consumer makes an inquiry. If they don't move through the funnel and become a customer right away, many times, they get forgotten about. What happens next? The vast majority of those consumers will end up transacting with a different institution.

The solution for small brands that may not have the same bandwidth as larger banks?

Automate the predictable, but humanize the exceptional.

Automation can help to rank and prioritize consumers and inquiries along the buying journey so that teams can reach out and create a genuine, authentic human connection or touchpoint. It’s the combination of digital and human that can make all the difference. 

The goal is to provide a framework for digital consumer journey mapping for all of these elements working together as a whole. Why? Because journey mapping and creating a true connection between digital and human experiences is an exercise in empathy.

By unlocking the connection between the digital and human experiences, small banks and credit unions have real potential to make way for digital growth and a bigger, better, brighter future.