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4 min read

A Five-Step Action Plan to Mobilize ‘Mobile First’

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Financial institutions that are not ready to fully serve customers digitally face an existential threat.

Hard as it is to fathom, we’ve just seen digital banking morph from “important” to “existential” status in one week’s time, and banks and credit unions that aren’t able to market, sell and serve their customers in an entirely mobile capacity are now facing an existential threat.

In the aftermath of the housing bubble and during adoption of new Check 21 regulations following 9/11, banks and credit unions proved nimble under pressure to serve the needs of their customers. The question we face now, though, isn’t whether they can adapt, but how quickly they can adapt. Speed is the new currency. How fast can customers be served remotely? How fast can a loan portfolio be analyzed for credit risk? How fast can the institution adapt its strategy?  

Despite all the hype related to digital transformation over the last several years, the systems and processes required to support customers virtually are not good enough. According to the Cornerstone Performance Report for Banks, the median bank’s active mobile banking users as a percentage of checking accounts was 36% in 2019, digital origination of consumer loans stood at 12% of volume, and deposit accounts originated online were an anemic 2%. All of these stats need to head toward 100% in a short period of time.

Meanwhile, What’s Going On In Banking 2020 shows that a third of financial institutions are in the process of changing out their digital origination systems and another third are changing up the processes they have on their existing systems. That’s a lot of cheese being moved all at once, and it can’t stop — even in our current state of disruption.

As digital readiness is tested across the country like never before, bold actions must be taken to ensure customer needs can be met under a social distancing mandate. Here is a Five-Step Action Plan to Mobilize “Mobile First.”

1. Help Customers Self-Educate

Stress is high, and people are trying to figure out what all this means to their personal and business financial well-being. What people may lack in cash flow right now, they have in time on their hands to learn. So just like so many of our nation’s children have been turned into e-learners overnight, financial institutions now need to give their customers the tools to self-educate. [Authors’ note: BIG SHOUT OUT to our nation’s schoolteachers and students who have adapted quickly and admirably to dramatic change.] By self-education, we’re not talking about an email reminding customers that the bank is accessible by phone or drive-thru and that digital banking is open. Right now, customers need help managing their finances through a downturn and adapting to this crisis.

Content needs to morph from campaigns and onboarding to education-on-demand. For example, show small business clients the types of credit that can provide them with cash flow support. Institutions that offer a forbearance should explain exactly what that means to customers’ repayment. Get specific about budgeting, and help customers leverage tools like MX, Geezeo or Yodlee to create a budget. 

2. Triage Virtual Weaknesses

Now is not the time for an institution to assume it is good enough. It is essential that banking executives clearly understand the challenges in their institution’s ability to service customers. It’s important to ask the tough questions prior to the origination process, when prospects are shopping. If a business needs a new deposit account, how can it be opened and funded? Does the institution’s digital account origination platform support this? If not, can accounts be opened through the contact center? Does the contact center have access to the needed systems? How will the business get the institution the required forms and documentation? Once business accounts have been evaluated, the institution can then look at consumer, loan origination, investments, etc. The order of these priorities will obviously vary by the business model of the institution

3. Get Gritty on Digital Servicing

Examining how customers manage not just their relationships with their financial institutions but with their world will help banks and credit unions determine how and where they can add value. The possibilities extend way beyond making deposits with mobile remote deposit capture or paying bills. Customers need to change their addresses, update their phone numbers, make deposits that exceed limits, initiate stop payments, set up A2A transfers with other banks, replace a lost card, etc. This step is where an FI learns if there are gaps in its ability to be a full-service organization and makes determinations as to whether to devote additional resources to fill those gaps.

4. Make Risk-Based Decisions

In this uncertain environment, managing the changing complexities of risk should be a top priority for financial institutions. Of course, risk brings questions. An institution that is considering changing policies for mobile remote deposit capture, for instance, would be looking at these (and quite possibly other) questions:

  • How much risk are we willing to take?
  • If we loosen limits, what will the review process be?
  • How scalable is it?
  • How will we know if it is working for both the customer and us?

A process that forces the FI to first ask the right questions and then define how it can make quick decisions, monitor results, and rapidly change course if needed will go a long way in helping the institution understand and mitigate the potential consequences of risk.

5. Hold Daily Sprints with Team Engagement

Once an FI has identified customer service gaps, it needs to determine which ones matter most and create daily sprints to plug the holes. As an example, if a bank has instant issue in the branches and a customer calls or emails to replace a card, it raises all sorts of fulfillment questions. Does the bank mail it out, deliver it through the drive-thru, or both? Who prints the card? How will digital banking exceptions be handled if teams are working from home? Who has access to ACH and mobile RDC exception reports? A team sprint is where these questions are answered and forward progress is monitored.

Two great examples of financial institutions reacting quickly are OceanFirst Bank and Coastal Federal Credit Union. In an investor presentation, OceanFirst outlines its Pandemic Oversight Committee and how it quickly dispersed critical support for its cash management business and enabled a virtual contact center to ensure commercial payments and wires were not impacted. Coastal has been a leader in the implementation of ITMs supported with centralized virtual tellers and strong digital banking for years. When COVID-19 hit, this strategy gave the credit union a leg up in delivering uninterrupted service for members with a human touch supported by a quick pivot that enabled centralized tellers to work remotely.

Mobilizing resources to meet immediately changing demand is tough stuff. We get it. But it’s important work for customers, teammates, investors and the economy. Most of it was overdue, anyway, so let’s get to it.

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