Digital innovation and technological efficiencies have changed the way small- and medium-sized businesses and the financial institutions that serve them do business on a daily basis. In fact, recent SMB banking research from Forrester shows that more than 80% of small business owners have gone digital, using mobile and online platforms every week, or even every day, to manage their business finances.
Yet, unfortunately, many financial institutions are still struggling to keep up.
As digital banking tools, offerings and experiences continue to evolve – and raise - the expectations of the SMB marketplace, now more than ever, it’s critical that financial institutions adapt and deliver digital solutions that meet their needs. The question is, where to start?
Financial institutions have traditionally taken years to build out new products and ideas. Today, they don’t have that kind of time – which poses a critical conundrum between quality and speed: Do you choose to deliver a solution faster but end up sacrificing quality? Or do you focus on quality but risk getting beat to market by your competitor.
The answer, said Wannemacher, is finding the right balance for your organization.
Constant change is a given. Yet faster platform development to adapt shouldn’t equate to loss of quality, which is why continual product development is essential. Digital transformation isn’t a one-time event; it should be an ongoing organizational process and incorporate flexible, highly configurable solutions that enable an incremental approach to delivering optimal end-to-end customer experiences.
The Great Resignation
The Great Resignation has been an unexpected result of the pandemic. But its impact on the financial services industry could have a long-lasting impact. In the United States alone, tens of millions of people, including frontline bank employees, quit their jobs in 2021. Financial institutions are now feeling the pain, with many not having the right people – or even enough people – to support their customers.
Wannemacher stressed that now is the time to focus on transforming your workforce and operations, as well as your technology and innovations. Obviously, you need to find – and retain – the right people to do the right work at the right time. However, you also need to leverage the right technologies to better support your SMB team, providing intelligent solutions that can automate manual, time-consuming tasks while allowing them to focus on what’s really important: your customer relationships.
Working with the right fintech partners is just as important as hiring the right people. Ideally, you will want to find solutions that are optimized for you and your organization’s distinct challenges, and enable you to innovate your digital offerings at speed and at scale.
While service remains at the core of the banking experience, Wannemacher said the products you offer are just as important. Afterall, if you aren’t delivering solutions that address the unique needs of your SMB community, you aren’t going to win new customers. Again, this is where partnering with a fintech comes into play.
Given the urgency in digitizing banking services and the learning curve required to do so, banks may likely need a technology partner to help them get into market quickly and securely. While building internally is doable, most Information Technology (IT) departments focus on the governance of an organization’s network and operating systems, not innovating new customer offerings.
It’s also important that technology partnerships be flexible and modular, allowing financial institutions to evolve digital offerings as the SMB market matures, add and subtract features, and, ultimately, empower continual iteration and improvement.
Ever-emerging digital tools, capabilities and banking features, such as Buy Now, Pay Later and Early Wage Access, will continue to transform the SMB lending landscape. To future-proof their business, financial institutions need to embrace digital transformation and re-engineer their processes to ensure they deliver high-performing digital experiences that match the expectations of today’s digital-first SMB marketplace.