The growth of digital innovation was the focus of the message given by the first speakers and panelists at this years’ Future Digital Finance event. Held in Austin, Texas, the conference welcomes speakers and attendees from across the U.S. And has some impressive sponsors including NCR, Adobe, or Backbase.
Craig McLaughlin, CEO of Finalytics.ai welcomed attendees by giving a thorough overview of the challenges of the past year. From Matt Damon’s promotion of Crypto.com to the collapse of FTX, Craig dispelled any concerns that the banking community might have felt about the onset of DeFi and crypto. He also commented on how inflation was still a lingering problem to many financial institutions today. However, more importantly, Craig wanted to focus on the growth of customization and the personal touch that banks need to provide within a digital experience today.
“While rising interest rates are driving our profits today, the future will be about rising costs,” Craig elaborated. Customers are expecting banks to be more of a software tool, he continued, “digital is forcing change and a cultural transformation. This is one of the biggest challenges for financial institutions today, because customers are demanding it.”
Building experiences that are relevant, that are contextual, and are personalized, will help demonstrate to customers that your financial institution understands you. Craig also highlighted how customers want you to care about them. They want you to feel like you’re advising them, and that you are able to relate to them. And they want this in a digital experience.
How Navy Federal Credit Union are addressing the digital needs of their customers
Much like building societies in the United Kingdom, there are larger and smaller credit unions across the U.S. Some of them are larger, like Navy Federal Credit Union, which has over 11 million members. Pam Piligian, Chief Marketing Officer, SVP, explained how Navy Federal Credit Union had been creating a better digital experience for its customers.
From educating through seminars, to increased email communication, the highlight of the talk from Pam centered on the level of trust that people felt towards Navy Federal Credit Union. Pam even explained how ‘storytelling’ had become one of the methods the organization had used to increase the digital experience for customers.
Pam’s talk made a big impression to the attendees. Not just because of the way that veterans and military personnel are viewed in the U.S. But also because of the strong brand that has been maintained by the Credit Union.
The introduction from Pam was a great preamble for the next panel that Craig McLaughlin hosted.
Financial Health and Wellness in Banking
Joining Craig on stage were 5 industry leaders. Jay Tkachuk, Chief Digital Officer of Golden 1 Credit Union raised some interesting points at the outset. Based out of Sacramento, Jay shared how one of his challenges was why the Credit Union didn’t have more than 1 million members when the organization was so well entrenched in California. Especially as Golden 1 Credit Union services such a wide demography.
Craig asked Brian Knollenberg, VP of Digital Marketing at BECU from Seattle to share how they look at the challenge of scaling. BECU has over 1 million members and is the largest credit union in Washington state.
Brian talked about the need to better help those on lower incomes with less ability to save.
He highlighted a recent story about how an incredible 56% of Americans would struggle to find $1,000 in an emergency situation. Brian believes that more needs to be done to help poorer families to get better interest rates on their savings and more favourable financing solutions.
Next Tamra O’Donnell, SVP Director Marketing at Canandaigua National Bank & Trust shared how there were still many challenges that financial institutions were facing. Based out of upstate New York, the Bank isn’t quite a credit union, or a bank. But it makes decisions locally based on what’s best for customers, the community, employees, and shareholders.
Tamra shared how schools were already a target for financial education seminars at her bank. A sentiment that Craig highlighted as both a growing trend as well as a need.
What is the future of branches in the U.S.?
It wasn’t the first time that people had talked about opening branches at Future Digital Finance. In Europe banks are closing at an unprecedented rate. Meanwhile in the U.S. many people believe that neither cash nor branches will ever go away.
Patrick Kelly, Chief Digital Officer at First Horizon, based out of Memphis, Tennessee, services over 1 million customers. Towards the end of the panel discussion Patrick concluded that what needs to be done is to take the “analogue experience that happens in the branch and move it to a digital experience”.
To do all of the things mentioned above it won’t be enough to just create a new website with some good email marketing tools built in. Many of the credit unions are also struggling with legacy systems that can be costly to upgrade. Solutions abound at the event, with many sponsors offering solutions such as mobile technology, digital marketing, customer insights, artificial intelligence, user analytics, embedded finance and more.
Legacy software isn’t the only challenge
PSD2 and GDPR have been frontrunners in bringing digital innovation to European financial institutions. At the same time there remains a reliance on cash in the U.S. Just consider how the $1 dollar note is still widely used. This reliance means that the payments and banking landscape differs in the U.S. Especially when compared to places like the Greater Bay Area in China, or even the capital of Open Banking, London.
Innovation is necessary. And in a country like the U.S. the shift to digital appears to be taking place without the need to shut branches. BECU, mentioned earlier in this story, are an example of how this is taking place. The majority of their 60 branches are staffed with consultants who talk to customers about mortgages or other financial products. They only have 2 branches you would call a traditional branch with ‘tellers’.
Is this the future for credit unions and financial institutions in the U.S.? #DisruptionBanking will be keen to see how things have progressed at the next Future Digital Finance event in 2024.
Author: Andy Samu