Financial institutions looking to grow shouldn’t build more physical locations, but instead look at how to expand their digital efforts, said one CEO.
“If they're going to allocate capital, it's not about putting it in another bricks and mortar branch for expansion,” said Joe Sullivan, CEO at Market Insights. “It's about redefining the idea of growth and looking at digital as a vehicle for growth.”
Sullivan will present at next week’s Financial Institutions Conference on the future of banking. Digital is an area that not enough banks are embracing, he said, and offering options such as embedded video in apps is an example of a step in the right direction for financial institutions.
“When we can talk to our banker and see their face inside of a mobile banking session, it is a win,” he said. “It redefines that idea of a face-to-face relationship. And that is something that almost every bank and credit union in the country can put out there and be instantly more engaged with consumers.”
To survive, Sullivan said banks must become more consultative in nature and offer opportunities for human connection. Instead of relying on people coming into a location to speak with a teller, they need to search out other ways to connect.
“You need to know your market, you need to acknowledge the shifts in consumer behavior and you need to keep making progress,” he said. “You need to humanize the digital experience, and you need to invest more robustly in digital.”
Sullivan said there is opportunity for CPAs to guide financial institutions into making the correct growth decisions, as there is “a danger in doing nothing and a danger in just doing anything.”
“What CPAs can do is invite conversation about change in the business model,” he said, “Talk about the cost of doing nothing. Talk about the idea that the most innovative banks are the ones that are having partnerships with fintechs and providing their banking as a service.”
The pandemic sped up connection and reliance on technology, Sullivan said, and financial institutions need to keep up.
“It’s about all around accessibility and all-around convenience,” he said. “And all the technology solutions are making it easier for the consumer to engage with their bank or credit union on their own terms in a way that they want to do in a timeframe that they want to do.”
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