Question

1

Managing change in financial institutions  

 

2

Managing small financial institutions  

Answer 1

1.

there are strategies you can employ to streamline the change management process as your financial services organization undergoes a digital transformation.

First Things First: Evaluate the Reason for Change

If you’ve been tasked with evaluating new technology for your finserv organization, don’t fall into the trap of change for change’s sake. Before making any kind of change, determine the reason behind it and the expected outcome. Are you confident it’s a change that will benefit your institution, your team, and your customers or members?

Is the proposed change consistent with your goals and objectives? Will the investment in time, money, skills, and effort result in a solid return?

Don’t choose a specific technology just because you read an article about it or your peers or competitors are already using it. Think critically about what will bring the most value to your organization.

Consider the Mindset of Your End Users

To succeed at implementing a technology change, you must be able to empathize with the people who will be using that technology on a regular basis. Any time you ask your team members to adopt a new tool or process, they’re asking themselves, either consciously or unconsciously, “What’s in it for me?” So take the time to consider how a new tool will make work easier for its end users, and clearly communicate these benefits to your team members.

For example, let’s say that your financial institution’s contact center is getting ready to adopt a knowledge sharing platform. From a business perspective, the key benefits of this technology might be that it reduces the time it takes customer service agents to find answers to customer questions, which improves customer satisfaction. While this will no doubt be a benefit for your customer service agents as well, another benefit from their perspective might be that the platform helps them feel more confident that they’re finding the most accurate information for customers– and reduces the stress that comes with scrambling to figure out where to find an answer.

Promote Organization-Wide Buy-In

If you feel like your financial institution is siloed by department, team, or location, you’re not alone. Research from McKinsey & Company found that one of the biggest barriers to digital transformation is the presence of functional and departmental silos.

So how do you promote a technology change across departments and functions when each department may have its own tech stack and processes that they’re used to?

You need to start by bringing together the heads of each department and getting them aligned around the vision for the new technology. Keeping the “what’s in it for me?” principle in mind, explain to these leaders how the change you’re proposing is a net positive for them. For example, your head of HR might be most interested in learning how the new technology could improve the onboarding process for new hires, while your Chief Customer Experience Officer might be most interested in learning how the new solution could improve the interactions between the financial institution’s employees and customers.

Learn From the Change Management Experiences of Your Financial Services Peers

How have you seen other financial services institutions approach change management and digital transformation? Have other institutions adopted the tech solution you’re looking into? What about companies in different industries? What can you learn from them that you can adopt and implement for your business? Just as importantly, what mistakes did they make that you can avoid?

Attend industry conferences, workshops, and networking events to learn from the experiences of your peers. Read case studies for the technology solutions that you’re evaluating. Reach out to others in your network who have helped lead a digital transformation at their organization and see if they’re open to a meeting. Do whatever you can to learn from those whose organizations have gone through a similar change so that your organization can promote its own digital transformation as strategically as possible.

And finally, remember that change, whether a company-wide culture shift or the implementation of a specific tool, involves much more than just technology. It involves people. If you approach change with empathy for those involved, make the benefits of the change clear to those who will be impacted, and take feedback seriously, you’ll be well on your way to a successful digital transformation.

2.

Small businesses depend on financial institutions in a number of ways, especially in the early stages of operating. One of the most common ways these businesses need help is in the form of checking accounts or other simple tools that help keep finances organized. However, fees and other restrictions can become a deterrent or inconvenience for business owners. To attract and keep small business customers, it can be important to optimize the way you handle customers and the types of services you offer them.

Small Business Needs

Most businesses need access to basic services such as a checking account, credit cards, payroll services, and loans. It’s helpful for a financial institution to have a streamlined and convenient process to offer these core banking services to prospective business customers. Your bank can increase profits from business accounts by improving your processes in services such as loans, and by offering small businesses all the banking services they need. You’ll also save time for the customer if they don’t have to go elsewhere. This will make the relationship more attractive for both parties.

Many of the most frequently asked questions by small business customers are related to the processes for obtaining credit and loans. High interest rates or an intensive process for vetting customers for loans and credit can turn small businesses away. They may not want to deal with these administrative headaches, in addition to the responsibilities they have with running their daily operations.

Why Are Some Banks More Attractive than Others?

Some banks just make it easier for small businesses to work with them through various perks such as low fees and better rates. Things like minimum balance fees or limits on transactions will frustrate many business owners if they feel like they are wasting money to maintain an account or complete normal transactions. Some larger banks such as Wells Fargo and SunTrust are consistently ranked as the best for small businesses due to minimal fees, an easy process for SBA loans, and diversity in the kinds of services offered to customers.

However, the size of a bank can also be important. Some people are willing to sacrifice the small conveniences and better technology associated with a larger national bank to develop a stronger relationship with a small group of people at a local institution. Improved customer service can lead to better retention and more long-lasting relationships. Research has found that even minor improvements in customer service can greatly affect a bank's bottom line.

Encourage Them to Do Business with Your Bank

Many banks now offer incentives like cash bonuses for opening an account or partnerships with local companies to offer discounts on things that may help a business, such as insurance. Customers now also expect technology to be used in ways that simplify many of the most common types of banking transactions. Credit or debit cards that offer cash back or other rewards have also become popular recently.

Conclusion

At the end of the day, your financial institution should provide incentives that make small businesses want to work with you. These incentives can include a combination of avoiding restrictions that cost business owners valuable time and offering bonuses that legitimately help these customers. Whatever you decide to do, be sure that it makes sense for both your bank and the customer.