In a year of utmost disruption, banking institutions have faced the requirement of reinvention and a forced reimagining of new methodologies of business transactions, evolving technologies, and also the clients’ overall banking experience. As the industry progresses rapidly, several key developments will drive the way forward for banking — from digital customer experiences and advanced financial technology to more artificial intelligence integrations than in the past.
Online and Mobile Banking Increases
The global pandemic certainly expedited the popularity banks were already seeing – non conventional visitors in physical branch locations and increased online and mobile banking.
The Uprising from the Remote Workplace
Additionally, the banking industry lagged behind in embracing the remote workplace. Despite being an essential business, the prudent measure ended up being to rotate associates for his or her sake, clients’ sake, and to protect the ability to keep locations open safely throughout the pandemic. The most significant pivot was scheduling remote work. Hiring the best people, deploying more technology, and providing vision, expectations, and accountability didn't hinder productivity for many banks — in some instances, it improved it. Ongoing skeletal staffing spurred other innovations for a lot of community banks, for example curbside banking and full-service drive-thru banking.
Assuming the trends continue, the banking industry’s future will allow more non-customer-facing employees the option to operate remotely and minimize traditional physical branch expansion in communities they serve.
As Digital Banks Rise, Community Banks Take Center Stage
In this fintech world, is there a spot for community banks? The solution in 2022 appears to be both it depends. Clearly, the value of community banks has not been stronger or more evident compared to 2022.
Business owners have repeatedly echoed through the pandemic the requirement of a real relationship using their banker — filled with their mobile phone on speed dial. Using the Paycheck Protection Program and Main Street Lending Program relief efforts funneling down through banks, it had been the neighborhood banks that were most vested within their communities and worked night and day for people and businesses they knew.
That said, traditional community banks that don’t embrace digital trends and opportunities will quickly be replaced because the next generation desires and expects everything in their fingertips.
Traditional Banking Still Plays Essential Role
Not bound by bot-driven underwriting, the art of being a good loan officer still applies in community banking. In its simplest form, traditional community banking is bankers living in using one of their neighbors, understanding the needs and challenges of the community, supporting local charities and sporting teams, and using the services of people who work with them. Building great relationships with clients is invaluable for Main Street businesses and the entrepreneurs that risk their life savings to begin and operate them.
Not only have smaller, neighborhood banks stepped up because the Amazon Prime of the CARES Act relief funds, but community banks often work with their clients — buying products and services from them and playing a little role in adding to their comeback.
As a Vista Bank client recently noted, “What I needed most out of my bank was confidence. They deemed in themselves, and they supported me. Sometimes, which was what got me through.” The private touches and meaningful relationship building for traditional banking customers will supersede digital bank experiences later on where the customer is seeking connection.
FinTech Emerges, Artificial Intelligence Arrives to Play
While artificial intelligence and machine learning tools may not be new technology, their adoption is relatively new to the banking and finance industry, especially among community banks. While that has in part been because of necessity and aging leadership, it’s also in part been due to cost, established contracts with core systems, along with other challenges. The expansion on the horizon is going to be young, vibrant community banks adopting said technology and combining the asset of robust data with the magic of relationships.
With the falling cost of data storage and processing, banks should lead on adopting AI. Much like banks did with other digital solutions, the ones that get ahead within this arena will have a advantage post our ‘masked economy.’ While AI can't ever fully replace a great banker’s gut, it may certainly inform and support sound underwriting decisions. It’s also great for scaling processes and detecting fraud, among a number of other conveniences for that end-user.