Utilizing Banking Technology to Build Core Relationships

Community financial institutions have spent significant resources on technology to enhance core relationships. From online services and bill pay systems to eStatements and mobile banking, better access equals more convenience. And, as a result, more people should be using these digital tools, right? Not quite — in reality, utilization of banking technology isn’t where FIs want it to be.

Here’s a run-down of the current role eSolutions are playing in the banking industry and ways you can get your core accounts leveraging them.

What Was the Pre-COVID State of Banking Technology Usage?

Thanks to the global COVID-19 pandemic, banking technology quickly became priority number one for FIs. But before the pandemic, however, our research shows that signing up for eSolutions didn’t necessarily translate to using them.

 Data collected prior to COVID shows that banks prioritized cross-selling checking accounts[1]. This is because:

  • 68% of the first consumer product is checking.
  • 52% of the first business relationship is checking.
  • 28% of the first relationship in a business household is consumer checking.

During this time, the cross-sell summary for checking households showed an average of 5.739 products and services per household; however, when looking at cross-sell on services such as online banking, online bill pay, eStatements, and mobile banking the average take rate was only 34.88%. As for business cross-sell summaries for checking households, the average business had 5.904 products and services per ‘household.’ usage ratio. For business cross-sell on eSolutions, the average take rate was only 25.98%/

The takeaway: FIs weren’t able to rely on digital products as a means to reduce expenses and increase engagement with more than 50% of customers.

Fast-forward to today, and the international shutdown has led consumers to adopt new behavior patterns, including relying on digital banking tools. However, people still have not adopted online banking options as much as some FIs think. At this point, we are tracking data and watching for further changes in consumer behavior. But the bottom line is, even with the pandemic, people have not completely adopted digital banking tools and still prefer the in-person experience.

Therefore, simply offering digital banking technology is not enough — FIs need to be proactive in making sure core accounts are also using the tools they sign up for.

 

What Needs To Happen To Improve Bank Technology Usage?

As we emerge from the pandemic, FIs must prioritize:

  • Banking technology utilization — not just offering digital tools, but getting accounts to use them, too.
  • Their physical location — core accounts still value having a branch they can visit.

With this in mind, there are ways that your FI can leverage banking technology to make it more appealing and user-friendly. As a result, you will enhance the experience your core accounts have with your FI, leading to better growth and higher retention rates.

 

What’s Preventing Core Accounts From Using Banking Technology?

The first step to becoming a more adaptable and agile FI is to secure digital tools that are easy for both consumers and employees to understand. The second step is increasing adoption of those tools. Our industry experts have found three consistent barriers that prevent people from utilizing banking technology:

  • Limited online access: Not everyone has a desktop computer or reliable internet access — but 87% of the U.S. adult population has a mobile phone.[2] Thus, not providing mobile options can prevent your core accounts from accessing digital tools.
  • Mediocre UX (user experience): Your banking technology needs to be simple, logical, and straightforward. Most importantly, it needs to be easier to buy so it’s easier to sell. You must provide a seamless user experience because core accountholders will not use poorly designed programs.
  • Insufficient process knowledge for employees: If team members don’t believe in your eSolutions, neither will your accountholders.

 

Teach Your Employees How To Use Banking Technology First

If your team doesn’t understand or, more importantly, use your technological tools, your accountholders never will. Thus, you need to enable an experience-based inner culture. If you convert your team into ambassadors for the product, usage will follow. And the more consumers you have using your technology, the better your retention rate and general customer satisfaction will be. 

To do this, offer eSolutions that your employees are proud to provide. Part of the pride will stem from software benefits, such as a robust online bill-pay experience. If your team sees the value your eSolutions offer, they’ll help your accountholders appreciate them, too.

Next, you want your team to be enthusiastic about your digital products and provide ongoing assistance to consumers. They’ll be able to do all of this with confidence when they possess comprehensive product knowledge — like knowing the ins and outs of how the product works, which type of account the product is best suited for and the benefits the eSolution can provide.

To ignite your sales efforts, encourage team members to use the eSolutions they’re selling. Product usage will make your team more confident and allow them to experience the benefits first-hand. The more your team believes in the eSolutions, the easier it will be to build long-lasting relationships.

Once your team is up-to-speed on your digital tools, your leaders must keep the organization motivated. Host weekly team meetings to ensure your team continues to stay current on your product and service offerings. Offer sales presentation certificates, shoutouts and competitions for team members who excel at selling new products.

Finally, leaders should take action to support the sales team through quality marketing. Provide materials your staff can use to close a deal or onboard a new customer.. The more support you provide to your internal teams, the faster they can increase banking technology usage across your organization.

The Obvious Answer To Improving Banking Technology Utilization: Grow Your Core Relationships

In any given year, up to 12% of households and small businesses change their FI. When you acquire new relationships, your FI will grow while competitors will shrink.; growth in banking is about stealing consumers from other FIs. To get more accounts choosing your FI, you need to leverage banking technology that is easy to sell and easy to use.

Focus on utilizing eSolution software that features an easy-to-use bill pay system, options for online banking and a follow-up process for eStatement use and acceptance. Evaluate your current eSolution processes to make sure your team members are well-trained in their use. When your teams can provide appealing incentives to prospects, more consumers will make the switch to your FI.

Looking to learn more about how banking technology can fast-track your FI’s growth? Reach out to our specialists today and discover how we can assist in growing your core customer relationships.

 

[1] Haberfeld Data, May 2018

[2] Federal Reserve, June 2018