Do Your Digital Offerings Meet Consumer Needs?

Tips for modernizing and elevating your digital offerings

In the rapidly evolving digital landscape, your financial institution must continually evaluate and upgrade its digital offerings to stay competitive. More consumers are shifting towards digital banking services —and while the traditional brick-and-mortar banking model remains important — some could argue it is being superseded by a digital-first approach.

Rising demand for digital banking and meeting consumer expectations

Modern consumers demand convenience, speed, and security from their primary bank. They expect to be able to access their accounts, transfer funds, and apply for loans or credit cards instantly and effortlessly. The rise of fintech companies offering innovative digital solutions adds to the pressure to keep up with changing consumer expectations.

Digital-only banks are experiencing unprecedented growth. According to Insider Intelligence, the number of digital-only bank account holders is forecasted to grow to 53.7 million in 2025, up from 29.8 million in 2021. These figures highlight the necessity for traditional community financial institutions to take proactive steps toward improving their digital capabilities to stay relevant in the market.

How different age groups embrace digital solutions

Generational adoption of digital banking solutions is rising across all age groups. As reported by Bankrate, as of 2021, mobile banking was the primary choice of account access for 43.5 percent of U.S. consumers, making it the most prevalent banking method.

About one-quarter of consumers say they would prefer to open a bank account online but are unable to do so at their current financial institution.

Over half (57 percent) of millennials and 64 percent of Gen Z have an account with a nontraditional institution, such as a fintech. Consumers between 35-44 years old are most likely to use a digital-only bank, with 29 percent of those in this age range having a digital-only primary account.

This wide-ranging adoption across generations highlights the universal appeal and necessity of digital transformation.

Expand digital services beyond the basics to improve user experience

However, simply having a digital presence is not enough. Community banks and credit unions must strive to deliver a seamless and intuitive service experience. The digital offerings should be user-friendly, easy to navigate, and compatible across different devices. Any friction or difficulty in the user experience can lead to dissatisfaction.

Consumers are increasingly expecting a wide range of services from your digital solutions:

1. Online Banking: Users require comprehensive online banking services, enabling them to view account balances, transfer funds, and pay bills from the comfort of their homes or on the go.
2. Mobile Banking App: A functional, user-friendly mobile app is essential. Features such as mobile check deposits, real-time transaction alerts, and mobile wallet compatibility are highly sought after.
3. Secure Transactions: Assurance of secure online transactions is paramount. This includes robust authentication methods and encryption technology to protect sensitive data.
4. Financial Planning Tools: Consumers seek tools to help manage their finances better. This includes budgeting tools, financial goal tracking, and investment advisory services.
5. Easy Loan Applications: Digital solutions that allow account holders to apply for and receive loan approval quickly are in high demand.
6. Digital Payments: The ability to make fast, secure digital payments, including peer-to-peer payments, contactless payments, and international transfers, is a must.
7. Service and Support: Access to digital support, such as chatbots and AI-powered assistance, round-the-clock service, or video chat support, is highly valued.
8. Personalized Offers: Leverage data analytics to gain insights into consumer behavior and preferences. These insights can be used to offer personalized products and services that cater to the unique needs of each account holder. This level of personalization can help your FI differentiate yourself in a crowded market.

Remember, meeting these consumer needs will result in a higher level of account holder satisfaction and loyalty.

Factors to consider behind the scenes

When evaluating digital solutions, you should consider the following factors:

1. Usability: The system should be intuitive and easy to use across different devices, from desktops to smartphones.
2. Security: With cyber threats continually on the rise, platform security infrastructure should be robust and regularly updated to protect sensitive account holder data. This not only protects their financial data but also builds trust and confidence in the digital offerings of your financial institution.
3. Integration: The digital solution should easily integrate with your existing systems and software.
4. Scalability: The platform should be scalable to accommodate growth and change in consumer needs and the number of transactions.
5. Cost-Effectiveness: The financial impact of implementing the digital solution, including the initial investment and ongoing maintenance costs, should be assessed.

Upgrading digital capabilities gives you a competitive edge

As digital transformation continues to sweep across the industry, community financial institutions that proactively evaluate and upgrade their digital offerings will be best positioned to retain their competitive edge. Those who wait to adapt risk being left behind in an increasingly digital and consumer-centric marketplace.

To learn more about modernizing your digital offerings, creating a successful digital transformation plan, or how to initiate an evaluation, contact the experts to get started.

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ABOUT ADVANTAGE
ADVANTAGE provides community banks and credit unions with evaluating your important vendor service contracts and more. Our team helps with negotiating a better rate, securing more favorable contract terms, and vendor selection to help you deliver the best service to account holders. To learn more, contact your local representative or call us at 800-809-2307.