Change is difficult. Yet, as the philosophers say, it's life's only constant.
The banking industry is currently experiencing a transformation of its own. Customers obtain banking services through a variety of channels these days, both in-person and online, and facilities are adapting to what their client base wants and needs by turning to technology, security and service vendor partnerships.
However, a number of branches and credit unions haven't fully embraced the new when it comes to integrating cutting-edge solutions into their operations. On some level, it's hard to fault these slowpokes: Many have years of exemplary customer service, loyal account-holders and the kind of deep community connections that make them hesitant to rock the boat.
Largely, though, the digital transformation and integration barrier to entry for branches and credit unions comes down to a perception gap. These institutions may balk at the thought of high implementation costs – accompanied by associated financial and customer impact risks – and wonder if customers will appreciate their efforts.
Despite what the naysayers may say, integration can work for you, so long as you avoid the misinformation and fear that comes with change. Here are five of the most common integration myths in need of busting:
Myth: Full integration of advanced terminals to core applications is something only big institutions can afford.
Fact: Smaller FI's are learning that a direct integration is more affordable than you would think.
First and foremost, let's address the elephant in the room: cost. American Banker reports that, for small- and mid-size community banks, technology spending can add up to about 10 percent of an annual budget. That's not small change and would give any self-respecting institution pause.
However, consider the following: In a flooded market, how do you distinguish yourself from the pack as well as future-proof operations? If you're Mechanics Cooperative Bank, a 140-year-old mutual in Taunton, Mass., the answer is to invest in an updated legacy core system and better serve the community.
"This will set us up for — I don't want to say the next 140 years — but this will benefit the bank in the long run," Joseph Baptista Jr., president and CEO of Mechanics Cooperative, told American Banker. Armed with the new platform, Baptista went on to say how he believes Mechanics Cooperative "will be at the forefront [of digital] and compete even against the large national banking institutions."
In-branch technology has advanced significantly and numerous core integrations have been rolled out across many of the major banking application systems, facilitating the affordable adoption of advanced automation for all.
Myth: Embracing change will spell the end of branches.
Fact: Branches will always be a part of financial ecosystem.
The advancement of technology, especially automated intelligence and solutions, has made omnichannel banking possible. The shift has some bank leaders fearing branches and credit unions will fade because customers have alternative avenues.
But numerous polls suggest otherwise. A Samsung Electronics and Celent poll revealed 77 percent of consumers prefer face-to-face interaction for more substantive and customized transactions. Additionally, in a separate survey done by Gallup, nearly 40 percent of respondents said they'd only use digital banking tools if they were paired with facilities they could actually visit, dovetailing nicely into a recent Deloitte survey revealing that, when selecting a bank, a branch near a home or office is a must.
The data sings loud and clear: The branch experience isn't going anywhere.
Myth: Embracing integration will eliminate customer-teller interaction.
Fact: Integration gives banks the ability to deepen customer-teller relationships.
Bank of America tech chief Cathy Bessant put it best at the Bloomberg Invest Conference: "The whole idea [of automation and optimization] is to mechanize those routine things to free up capacity for the thought and human interaction work."
From counting money to depositing customers' checks, branches and credit unions are rife with repetitive, menial processes that are innately low value in nature. By mechanizing these mundane tasks, staff can develop deeper one-on-one relationships with customers, whether by guiding customers through how to use new functionality or tailoring loan products to meet unique needs. This helps banks deliver a high-touch experience while embracing high-tech.
Myth Integration is unnecessary.
Fact: Integration is fundamental to customer satisfaction.
An Accenture Research study conducted late last year found two-thirds of customers use banking tools online at least once per week, suggesting digital is their preferred method. That said, 75 percent of banking customers have visited a branch in the last six months, according to a separate Gallup poll. These two worlds collide as the customers' digital experience shapes the expectations they have of their in-branch experience.
As IBM Global Banking & Financial Markets transformation leader Danny Tang noted in The Financial Brand, customers' needs are "not provided by a single branch, but are met by a combination of branch/ATM network and digital channels." In short, the digital and physical banking world can, and should, co-exist.
The key to success lies in repositioning the branch as a streamlined banking center staffed with personnel focused on enhanced relationships and customer outcomes. Educating and enabling customers to utilize in-branch self-service channels is critical. Customers walk into a branch specifically seeking personal and expedient service with properly integrated technology. Banks and credit unions can give them exactly what they need with a hand-off to a self-service digital solution or an advisor focused on more complex products and services that will benefit the customer and generate profit for the institution.
Myth: Integration is too stressful.
Fact: Integration makes customer service and work processes easier.
There's no denying that new systems take some getting used to. But given that customers prefer digital, these early challenges are just that: unfamiliar at the beginning, but quickly a simple routine. Branches must be all things to all people, and integration helps make the universal banker possible.
Routine is comfortable but ultimately leads to a dead-end; change nets results and begets growth.
BranchServ helps you achieve the changeover from start to finish. Our expert solutions for security, automation equipment and self-service technologies will help you remain competitive, and our expert team of technicians provides the service you need to understand how these systems work from front to back so you can put your focus on what truly matters – the customer experience, made possible through operational efficiencies.