“We must innovate!” Are you sick of hearing this yet? Are you focused on revenue growth, expense management and the increasing burden of regulatory compliance? If so, innovation may be the furthest thing from your mind.
And yet the plaintive refrain continues, and it has merit.
Not because everyone else is doing it, that’s for sure. Not because it makes us look cool.
But banks and CUs need to innovate, because otherwise the world is going to keep moving forward and leave us behind. Eventually so will our customers and members, whether consumers or businesses.
Customer and member expectations are changing – this is nothing new. You’ve probably implemented some mobile and online capabilities in the hope of keeping up. You may have established that you need a digital strategy, though perhaps it isn’t fully articulated yet.
But unless you are actively innovating (see below for what I mean by this), you are creating risks and missing opportunities. I’m talking about opportunities to increase revenue and reduce operating expense. Opportunities to better manage all kinds of risk – market, credit, operating, and regulatory.
While there is much competition for IT budgets and other investments within financial institutions, community banks and credit unions in particular can’t afford to ignore innovation to meet the needs of their customers and members. Not only can innovation improve organizational efficiencies and reduce costs, it can help FIs better understand banking customers’ needs and likely future behaviors, leading to increased satisfaction, engagement, and loyalty.
Overview by Ed O’Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group
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