In 2017, research indicates that technology will become an even higher priority for banks and credit unions across the country. Here are some of our top predictions for how technology will affect the banking industry over the next 12 months — and how you can position your organization for success this year.
1. Enhanced customer experiences will drive technology adoption.
A superior customer experience is essential to building loyalty and long-term relationships. For that reason, customer experience will be the main driver for technology adoption in the new year. Banks and credit unions will seek out tech-driven tools that empower core transformation, digitization, and automation.
According to Deloitte’s Banking and Securities Outlook 2017, “As technology upgrade cycles continue to shorten, banks may finally demonstrate a willingness to retire legacy systems for cloud-based platforms, many of which operate on subscription models.” In the next 12 months, you can expect to see banks and credit unions (your competition included) embracing tools that enhance the customer experience.
2. Cybersecurity will take center stage.
As stated above, the cloud is expected to be the primary tool for upgrading core transaction banking platforms in 2017. This will, necessarily, bring cybersecurity to the forefront of leader’s minds. Banks and credit unions will need to become more sophisticated to adequately prepare for a constantly-evolving cybersecurity landscape.
With growing adoption of cloud-based technology, financial institutions will place more emphasis on encryption, identity, and access management. Additionally, growing regulatory pressures related to cybersecurity will require banks to focus more on compliance (rather than just on risk mitigation). Smart organizations will take steps to preemptively shore up their cybersecurity defenses — or else risk scrambling to do so during a crisis.
3. Customers will expect a more streamlined digital relationship with their bank.
In the past, many financial institutions have done an insufficient job of educating consumers on the services they offer and, more generally, nurturing the relationship throughout the customer lifecycle. This includes everything from account opening to new account onboarding and ongoing engagement such as growing their relationship through cross-selling.
In 2017, banks and credit unions of all sizes will need to put an emphasis on making every stage of the customer journey easy, seamless and intuitive. Priority should be placed on making digital transactions like funds transfer and bill payments easier to complete online. When your customers do need to come into the bank, the experience should feel like an extension of those digital interactions with you. Frontline employees should understand their account and be able to meet their needs in a prompt, personalized and responsive manner.
4. Banks will see the need to invest in innovation.
The push toward digitalization that we will see in 2017 will be complemented by banks and credit unions embracing more technological innovation. These shifts will require changes in company culture and back office operating systems in order to facilitate organization-wide adoption. This will not be innovation for innovation’s sake, however; the focus will be on reducing costs, improving engagement and making banking easier.
According to The Financial Brand’s 2017 Retail Banking Trends and Predictions, “The areas where most banks are increasing innovation investment are customer service/experience (84%) and channels (82%), followed by processes (67%), products (63%) and sales and marketing (56%).” When it comes to investing in innovative technology, small to mid-sized community banks might feel as though they don’t have the resources or expertise to pursue these opportunities. Just remember that you don’t have to invest in everything; just the right things.
With these technology trends on the horizon, what can you do to prepare for the changes? Banks and credit unions will need to continually explore innovative new strategies as technology evolves and regulatory requirements increase.
Keep in mind that education is essential — and if you’re reading this article, then you probably already know that! Stay up-to-date on the critical innovations happening in the financial industry and take steps to understand how these will impact banking in the near- and long-term. If you need more guidance on what to look for in banking technology, check out our free guide to CRMs for banks and credit unions.