Digital transformation adds Convenience without Replacing Strategy

Dan Rousseve, Chief Information Officer,TCU

Dan Rousseve, Chief Information Officer,TCU

For a long time, money was a very analog concept. But even financial institutions are not immune to digital transformation, which is the integration of technology that fundamentally changes how you operate and deliver value to customers. We know financial institutions must adopt digital transformation to stay relevant. But how can we translate the inherently intimate nature of financial services into engaging technology?

To begin, digital transformation should not be a replacement strategy, but a way to add value to the customer experience. Now more than ever, consumers want to interact on their own terms and be able to access their money whenever and wherever they want. They need services that are going to make their lives easier. It’s our job to meet consumers where they want to be, and that requires a mixture of digital and traditional analog services.

The key is finding ways technology can make traditional services more convenient. A perfect example of this is the check. While its use has been declining for a while, it wasn’t a payment method that society was ready to get rid of permanently. The adoption of remote deposit from a cell phone has eliminated the hassle of depositing checks. We’ve also made the loan process less intimidating and streamlined it through digital adoption. Services like automatic bill payments and person-to-person transactions make personal finance easier, but there is a risk of driving disengagement. Make it too hands off and customers will become bored or apathetic.

Digital transformation is eliminating the shotgun approach, where financial institutions tried to market and sell their services to as many people as possible

We must keep the personal side of banking, even through digital transformation.

Financial institutions now have data available that makes it easier to adapt services to customers’ needs and wants. Bill pay analysis and subscription management services demonstrate to customers that we care about their money and how we can help them save more of it. We can provide solid, customized financial advice that was previously only available by meeting with a financial advisor face to face. Data also gives us insight into the financial positioning of customers and allows us to offer appropriate services. Digital transformation is eliminating the shotgun approach, where financial institutions tried to market and sell their services to as many people as possible. We’re not going to offer an auto loan to someone who recently bought a car; it’s a waste of our resources and the customers’ time. Data gleaned through digital transformation allows us to be more engaged with our customers.

There are risks that come with digital transformation, especially when it comes to security. As financial institutions, we are entrusted with the safekeeping of our customer’s money. It’s a powerful responsibility, and we must balance convenience with security. Using data, we can analyze spending habits and potentially catch fraudulent charges in real time, alerting the customer and preventing further impact.

Digital transformation has been a big equalizer for regional credit unions and banks. It’s allowed them to offer the same convenience as large national banks, and it has broken geographic barriers on where consumers bank. No longer do consumers have to worry about transferring their money to a different institution after they move, because they can access that money from anywhere.

Digital transformation is about innovation and finding ways to leverage technology to solve problems no one has ever solved before. For financial institutions, it’s about increasing convenience and meeting customer demand, even in a new and everchanging environment