Revolutionizing Banking CX: A Blueprint for Empowerment & Efficiency
We've all been there.
That dreaded moment...
When you need to apply for a loan, refinance a mortgage, get new insurance, or any other financial product or service that requires documentation and underwriting.
You have to go dig through the metaphorical (and sometimes literal) "box" of paperwork—bank statements, tax returns, payroll data, and more.
It's an arduous process of gathering, copying, scanning, faxing, or uploading document after document from disparate sources.
And it doesn't stop there.
Every year, every quarter, you may have to reproduce much of that same documentation, even for the same providers. They have no way to access your updated information directly.
It's maddening to have to jump through these hoops—repeatedly—just to maintain basic financial services for your business or personal life.
This painful process is so universally experienced that we've just accepted it as inevitable.
But it doesn't have to be this way.
There is now an opportunity for a revolutionary new approach to customer experience in banking and financial services. An approach that will finally allow us all to metaphorically burn that dusty document "box" for good.
The Looming Threat of Open Banking
For leaders of credit unions and community banks, the time is now to embrace this customer experience (CX) revolution.
The catalyst?
The impending reality of Open Banking in the United States.
Open Banking mandates that banks must securely open their data to third-party providers through APIs, if a customer permits it. This allows consumers to easily share their financial data with other banks, fintechs, or financial apps that they choose to use.
While larger banks are understandably concerned about Open Banking diminishing their competitive advantages, this regulatory shift presents an immense opportunity for smaller institutions. Open Banking effectively levels the technological playing field, empowering credit unions and community banks to be just as powerful and flexible as the big players.
But to do this most effectively, for the long-term, requires going beyond piecemeal evolution of customer experience.
It demands a full-scale revolution in how you serve your customers—one centered around maximizing ease of use, and unparalleled personal empowerment.
Introducing the "Data Layer" Revolution
At the heart of this CX revolution is the concept of a unified "data layer" containing all of a customer's relevant commercial information—financials, operating data, legal details, and more. By providing their customers with a secure, tokenized data layer, credit unions and community banks can facilitate seamless access for any third-party financial service.
Rather than constantly having to gather and supply documentation, the customer would effectively sign in once to this data layer. They could then simply approve secure access for an institution to retrieve only the data required for underwriting a particular product or service.
On the institution side, this data layer translates and packages the customer's information into the ideal format for ingesting and processing. It streamlines and automates what is currently an arduous, repetitive, and error-prone process.
The result is a customer experience akin to single sign-on (SSO) for financial services.
With a single, secure point of access provided by their bank, a customer could effortlessly access and manage a full suite of banking, lending, insurance, accounting, and other offerings from any provider they choose.
This "SSO" experience—backed by the unified data layer—would provide customers with unparalleled financial freedom, transparency, and control over their own information.
No more repetitive requests, no more boxes of dusty documents. Just seamless access to services tailored to their unique needs and situation.
Benefits for Banks: Becoming Trusted Advisors
For credit unions and community banks, this data-layer approach transforms your very relationship with customers. Rather than being merely a conduit for financial services, your institution is now empowered to evolve into a trusted advisor across the entire financial service landscape.
With a comprehensive, real-time view of each customer's financial position, banks gain the insights required to intelligently recommend products, services, and strategies. They can proactively identify opportunities to save money, optimize cash flow, reduce risk, and achieve personal or business financial goals.
Recommended by LinkedIn
This advisory role is further enhanced by the ability to instantly share a customer's data with other service providers when appropriate. For example, a bank could securely loop in an insurance provider, accountant, or lawyer with the latest information—eliminating hassle and duplicative requests.
Becoming this hub for unified customer data strengthens the bank's relationship as a key partner. It drives deeper loyalty and retention by creating a sticky ecosystem tailored to each customer's needs.
Leveling Up to Compete in a New Era
Ultimately, this CX revolution empowers credit unions and community banks to compete and grow amidst mounting pressures. Customer expectations have been utterly transformed by the slick digital experiences of big consumer brands and neo-banks.
People now expect banking and financial services to be just as simple as buying shoes online or hailing a ride. Anything less feels outdated and cumbersome.
By providing a single, secure data layer for streamlined financial access, smaller institutions can meet and exceed those elevated expectations.
This revolution also helps smaller banks retain top talent and attract a new generation of customers.
Millennials and Gen Z have grown up in a world of unified digital experiences. They have little patience for repetitive documentation requests and fragmented services. Offering a modern, empowering experience will be key to capturing their business, and retaining them over time.
Further still, Forrester found that improving CX goes straight to the bottom line.
For a direct bank, a 1-point improvement in its CX Index score can lead to an incremental $92 million in revenue. Additionally, the effect of CX changes on business outcomes for US banks is exponential—revenue growth from better CX gets progressively larger, where US banks have the highest gains from improving already good or excellent experiences.
Most importantly, the data layer approach future-proofs credit unions and community banks for the Open Banking era. As financial data sharing becomes the norm, these institutions will be well-positioned with a compliance-friendly infrastructure already in place.
Rather than feeling threatened by Open Banking, smaller banks can embrace it as a catalyst to completely reimagine their customer relationships. To move from legacy operations weighed down by cumbersome processes, to becoming hubs for unified financial guidance and empowerment.
As a forward-thinking leader in the financial services industry, you now have the opportunity to be at the forefront of this customer experience revolution.
A comprehensive solution is now available, empowering you to offer this transformative data layer to your customers, seamlessly integrating their financial information and granting them unparalleled control over their data.
The Call to Action
To you, the leaders of credit unions and community banks, I issue a call to action:
In doing so, you will not only strengthen your bond with your customers but also position yourselves as pioneers in a new era of financial services—one where empowerment, accessibility, and personalization are the cornerstones of success.
Making the Revolution a Reality
Of course, undertaking such a fundamental shift in customer experience may seem daunting. Implementing a full data-layer solution could potentially require significant investment in technology, training, and process transformation.
The good news is that this revolution is available and ready to be deployed today.
Rather than attempting to build everything internally, credit unions and community banks can leverage pre-integrated solutions for:
This approach allows smaller institutions to rapidly deploy a revolutionary CX model without the heavy lifting. They can focus on their strengths of local relationships and personalized service, while the technology handles data unification seamlessly in the background.
The bottom line is that the future of financial services will be driven by empowered consumers, not internal processes.
The "box" of cumbersome documentation requests is poised to go the way of physical checkbooks.
Credit unions and community banks have a choice—retain legacy operations and be outflanked by larger players and fintechs. Or, embrace the data-layer revolution to become indispensable hubs for unified financial empowerment in your communities.
The opportunity has never been greater to burn that dusty box of documents for good.
All that's required is the willingness to revolutionize, not just evolve, your customer experience.
Supporting community centered financial institutions and their business clients with innovative lending software.
6moVery insightful post Arjun Sahgal! This is the next stage of evolution for financial institutions seeking to enhance business intelligence and customer experience.