Capitalizing on Change in 2020

By Tina Giorgio

Tina GiorgioIn banking, one thing is for certain – and that is change. With the advent of new technologies and solutions, education will be the indispensable complement to ensure community banks can take advantage of the opportunity these changes afford.

It’s with that spirit of promise and need for knowledge that I want to touch on three industry developments that should be on every community bank’s priority list in 2020 and beyond: Internet of Things (IoT), digital wallets, and customer relationships. Each involves a healthy dose of technology, a commitment to learning, and a steadfast understanding of your customers’ needs.

1. IoT. IoT speaks to smart devices that interconnect to simplify front-end processes. Forecasters predict that this year an estimated 20.4 million devices will be connected worldwide. And while many devices leverage technology advancements in a smart home setting, business adoption is expected to increase as well as the industry moves towards automated solutions to create efficiencies, save costs, and gain greater insights into customer behavior.

Understanding how IoT aligns with your business customers’ needs will help you develop services that not only enhance their internal processes, but address their customer-facing opportunities as well. And leveraging IoT for your bank’s internal process advancements and data analysis will help improve the customer experience and support your overarching business goals too.

2. Digital Wallets. It’s no secret that digital wallet usage is growing thanks to efficiency, convenience and security attributes that are in high demand by consumers. In fact, 29 percent of U.S. consumers would like to pay with their smartphone all the time—preferably through their financial provider. Ensure you’re exploring rewards programs and customer benefits that keep your cards top-of-wallet and enable you to meet the needs of existing and new digital-first customers and earn a greater share of the billions of dollars spent through digital wallets.

3. Customer-first approach. The technological boom that’s happening around us places the customer squarely at the center of its development. Advancements are not coming for the sake of the technology—they address customer demands and expectations. The more you engage your customers, the more they spend and the more loyal they will be to your bank. This means that the thriving relationship banking model community banks live and breathe by has become a critical priority.

But how do you leverage technology to support that relationship? In addition to traditional interactions, think of the potential of new technology, such as artificial intelligence and machine learning that can crunch large amounts of data quickly to better understand your customers’ trends, patterns and desires. Analyze those data points to glean how, where and with whom your customers are conducting their payments and then offer custom products and services that anticipate and directly address those needs.

For innovation to be successful it must be interwoven as part of your culture and strategy at the bank. With careful thought, and strategic alignment with organizational plans, community banks will be well positioned to capitalize on the promise of these new technologies to create a memorable banking experience for customers.

Tina Giorgio is president and CEO of ICBA Bancard.