Financial institutions have been upping their fintech game and digital strategy efforts for years now. Whether it’s taking advantage of the cloud, mobile banking or data analytics, the tools, solutions, and technologies available are expanding at an intimidating rate for smaller FI’s that rely on their marketing and IT teams to wear a lot of hats.
The reality is, it’s not what’s available as much as it is understanding the value of each technology, so FIs can use the strength of each technology to their best advantage. The blend is what makes your fintech strategy unique and this is a great topic to have with your bank’s or credit union’s staff.
The most important challenge is to find the balance between implementing these technologies and still providing the personal care that makes community-focused FIs so popular.
Following are the top 4 fintech trends that you need to explore with your team to see how they best fit your FIs growth strategy.
1. Enriched Data
FIs’ success is increasingly tied to not simply collecting data, but converting data to knowledge, and finding value in that knowledge. Yes, your FI has compiled huge amounts of data. But data is useless if you can’t enrich it and apply it to an overall strategy.
If you can automatically categorize transactions in your PFM for example, you will allow your users better interaction with your PFM since most users don’t take the time to apply their own categories to transactions. If the work is done for them they can then begin tracking spending and expenses quickly and set their goals more easily.
This allows you to get transactional data and provide analytics that helps you better target the needs of your customers. Are they paying a mortgage at Bank of America? Do they have a high credit card balance with Chase? What is their student loan payment every month?
You can then target these points with a competitive mortgage, a better credit card suited to their goals or a consolidation loan to help lower their student loan rates. Enriched data is a powerful marketing tool and also very helpful to your customers.
2. API & Tiles
Application Programming Interfaces (APIs) are going to be at the forefront of product and service discussions over the next few years.
By using APIs, financial institutions can offer digital services they probably wouldn’t be able to develop on their own. For example, Geezeo’s API can be used to place Responsive Tiles - which provide unique digital banking experiences for customers - into online banking platforms.
Tiles drive engagement and allow FIs to gain increased knowledge from information shared by digital users (i.e. aggregated external accounts, top expenses highlighted in a spending chart, financial goals, etc.) which can lead to relationship building and marketing opportunities.
3. Mobile First
The “mobile first” approach is much more than just a fad. The need to create an accessible, dynamic, frictionless user experience within your FI’s digital financial management platform is imperative, not just for millennials and Gen Z, but for your entire client base. Even Gen Z relies on branch banking for certain transactions. Mobile isn’t an end in itself, but another means to an end.
Your mobile platform, from its API to it user experience can be rich, intuitive and dynamic. The goal is to create an interactive experience that allows the customer to rely on the PFM so that you can learn their goals and needs by the way they use the PFM. It’s enriching this data, that allows FIs to take those insights and turn them into marketing opportunities on a granular level.
4. Cloud Power
Simply put, the cloud provides flexibility to remain competitive.
The combination of big data and unlimited computing power allows FIs to develop systems that provide better insight into customers’ goals and make better decisions on their behalf. It’s a powerful tool for FIs to help customize their offers on a more granular basis and provide those offers in the most effective media.
Geezeo partnered with cloud data powerhouse Amazon Web Services (AWS) over a decade ago, in anticipation of an increasingly common challenge for smaller FIs: the need to store and retrieve large amounts of enriched data that is immediately accessible, completely secure and both broad as well as deep.
The cloud, along with an enriched data strategy, allows smaller FIs to compete with bigger banks in their respective markets by being more dialed into their customer's specific needs at a given moment in time. In the retail banking space it plays out just like it does in other retail venues - if you can address a potential customer’s need at the time of need, you’re likely to get the business.
Fintech offers powerful tools that can help FIs become competitive on levels they never thought possible. But it’s about thinking about your strategy before deciding on your execution. By understanding all the elements that you can deploy and deciding how they fit into your current ecosystem, you are in a much better position to set your organization up for success. Educating and providing guidance to your staff about the benefits of fintech allows them to actively drive engagement with customers and members, which ensures greater usage and better customer satisfaction.
Erica Gee is Geezeo's Director of Client Success and previously worked in training and education in the financial services industry.