Despite current economic conditions, innovative banks are avoiding cuts to their tech budgets. However, many banks are still hesitant to venture away from their core providers and form relationships with other technology vendors. Investing in technology can help community banks improve efficiency, reduce operating costs, and reach more customers with an improved customer experience.
Commercial customers are typically a bank’s largest revenue stream. Meeting their needs and providing top-notch experiences for them is a high priority, but most financial technology is not built or suited for commercial customers or complex relationships.
With tightening margins, inflation, and high interest rates, community bankers face not only a challenging lending environment, but also a battle to sustain deposits. Customers are more knowledgeable than ever and are prepared to shop across multiple channels to find the right fit for their deposit needs. So how can community financial institutions look to compete with larger banks and credit unions to attract those customers?
Net interest margin is a central measure of a financial institution’s long-term success and viability. In an industry that is currently seeing abnormal trends of lower loan originations, excess liquidity, global staff shortages and supply chain issues, closely monitoring margins is of even more importance for banks wanting to avoid falling behind peers.
Excellent customer communication is the pinnacle of community banking. However, a new precedent for speed and digital offerings for your commercial customers has been set since the onset of the Paycheck Protection Program. Will people want to go into a bank branch to apply for a commercial loan when they were able to carry out the entire PPP loan process digitally? Now that these digital expectations have been set, there’s no going back. Bankers can’t revert to doing things the same way they did before the pandemic. It’s just not an option.
In the banking industry, innovation and technology are top of mind for community financial institutions who want to stay relevant. As you search for solutions to your CFI’s needs, you will undoubtedly vet many vendors. Give yourself an advantage and be sure to ask the right questions during the discovery process. These are some of the most important questions you should ask when interviewing potential partners to ensure the relationship is going to be a good fit.
Conferences are on our mind right now as we’re preparing for the annual Teslar User Conference coming up this September. Navigating conferences in this post-pandemic/lingering pandemic atmosphere poses its own challenges as we seek to meet the needs and preferences of our clients.
Community banks have always been good at creating lifetime customers, but evolving technology and customer demands can complicate your ability to satisfy customers post-pandemic. There is a running joke in the banking industry that the pandemic took five years of technology growth and pressed it into one. With the additional demands put on bankers by the Paycheck Protection Program (PPP), that joke is one hundred percent true. Now that these digital expectations have been set, there’s no going back. Bankers can’t revert to doing things the same way they did before the pandemic. It’s just not an option.
The banking industry is completely changing (and fast!) due to this global pandemic. While banks are typically slow to adopt technological changes, the pandemic has accelerated this process by years. Digital offerings are not just conveniences anymore, but legitimate necessities for customers now. This adaptation can be more difficult for community banks with more limited resources than it is for large banks, but community banks still want to be players in the game.
The modern community banker is caught in the crossfires of remaining traditional and being expected to adapt to accommodate a new generation of customers. Let’s face it—community bankers are expected to be all things to all people. Many community banks are juggling trying to serve rural customers with no internet access or even an email address, while simultaneously meeting the digital needs of younger and more fast-paced lifestyles.