4 Top Finance Execs Speak Out: How CUs and Community Banks Can Stay Competitive in a Digital World

Before the coronavirus pandemic hit, small banks and credit unions were already trying to find their footing when it came to technological adoption. But the coronavirus put them to the test and turned digitization into a matter of survival. At the Virtual Banking Summit in September 2020, we posed the following question to our panelists: In our new remote reality where digital is a necessity, what can these smaller institutions do to keep up with large, traditional banks? Some of our speakers were very impressed by how credit unions and community banks rose to the occasion and became more responsive to consumers’ digital needs. Others felt that most smaller banks are still lagging when it comes to innovation and agility. And all had a word or two of advice for institutions trying to stay competitive and relevant given the rapid pace of change and growing customer expectations. Here’s a snapshot of some of our speakers’ diverse responses to the question of how CUs and community banks can stay competitive in this high-stakes digital era:

A Former VP at JP Morgan Chase Says, “Empower Remote Contact Centers!”

Digitization is key for all banks, but for smaller or moderate-sized banks, it’s a matter of survival. I’ve seen credit unions that have opened and closed and opened and closed their doors on several occasions already because of coronavirus flareups. These banks need the ability to keep their agents operational at home. Throughout the crisis, credit unions have seen great success with maintaining the personal experience they are famous for, often with a familiar staff member. But now, they must also start meeting customers’ needs for remote and secure interactions. In addition to supporting business continuity and changing customer expectations, digitization can benefit the well being of staff and help keep loyalty high. At the center of this effort to digitize is the credit unions’ contact centers. Particularly good managers are inspiring their agents to be the customers’ hero. As a result, these agents start to feel the real impact of their work and exhibit greater motivation to serve customers well, and with care and understanding. This is a positive trend, and the credit unions and banks that are managing to inspire this dynamic are seeing the customer relationship blossom. And that’s what’s needed most in our remote environment. -Rich Corriss, Director of Customer Success, Lightico & Former VP, JP Morgan Chase

A CX Expert and NYT Bestselling Author Says, “Stay Human!”

Credit unions and community banks ultimately target a specific type of customer that wants more than a transactional relationship with their bank. And these smaller institutions pride themselves on the relationships they build. When they digitize, it’s critical that they don’t jeopardize this human element, and find themselves disconnected from their customers. I have always told smaller banks, “you might have an advantage over the larger banks — even if they offer a somewhat wider variety of services — because you already have a relationship built. In general, finance is a sticky industry, meaning people will stay with you until they just can’t stand staying with you and there’s a breaking point! But up until that point, if you’re able to provide them with a moderate level of service, they’ll stay with you. If you can take it to the next level, they’ll love you. Don’t let the fact that you’re not as technologically capable as the large banks get in your way. You have an advantage as a small bank and credit union that they don’t, and that’s the relationship you have with your customers. -Shep Hyken, Chief Amazement Officer, Shepard Presentations

A Digital Banking Strategist Says, “Don’t Make Excuses!”

We work with community banks and credit unions, and we’re constantly talking to them about the issue of keeping up and competing with larger banks. What I see is that it’s less a matter of resources, and more a matter of strategy and leadership. I’ve had lots of conversations with people who say, “Look, I’m a $500 million in asset bank; there’s no way I can keep up with Bank of America. They have deep pockets that we don’t have.” Well, guess what? I worked at Bank of America and the people there complained about the same thing! They say, “We’re at Bank of America, we’re the Titanic, we have way too many people working on these problems. Wouldn’t it be great to be a $1 billion bank that can be swift and make decisions quickly?” Ultimately, attitude counts more than size. Take the CEO of Radius Bank in Boston: He went from a two-branch bank to a FinTech bank, and that was all because of his leadership and strategy. He never said he didn’t have enough money to get things done. He said “This is my vision. This is where we’re going.” And he got his team behind him. There are other organizations in the industry that are adopting this mindset, and those are the ones that are going to survive. But it’s not the norm. Community banks are still too focused on say, next year’s budget or the next cycle. They’re not focused on where they’re going to be in five, ten, or twenty years. And that needs to change if they want to still be around at that time. -Alex Jimenez, Chief Strategy Officer at Extractable & Former Chair of the CBA Digital Channel Committee

A Capital One Ventures Partner Says, “Leave the Core Provider Behind!”

From my perspective, the biggest albatross around the credit unions and community banks is that they’re dependent on the core provider for access to any updates in their systems. Until they address that issue holistically, they’re at the mercy of the core provider. And there’s no incentive for a core provider to help a small credit union. The real leaders in the credit union and community bank space have decided to do it themselves, or go to a FinTech company that can do it better and faster than any core provider. -Bill McNulty, Operating Partner, Capital One Ventures