How to Digitize the Community Bank Relationship Model

May 24, 2022

When it comes to community bankers’ technology to-do lists,  35% view investing in digitalization as their top business opportunity. We’ve clearly arrived at a tipping point where community bankers are not just talking about the digital experience, they are incorporating it into actionable plans. But execution is the tricky part.

Community banks are known for their service, and typically that service is in person in a branch. How that quintessential experience translates into the digital sphere sparks an opportunity. The days of taking an in-person, paper-based process and dropping it in an app or an online form are gone. The “Amazonification” of the world has created a new paradigm in which consumers, expect a seamless experience on the channel they choose, without friction, hiccups, or repetition of process. And that sets the tone for customers’ expectations in today’s digital banking environment. And quite frankly, this is where community banks can differentiate themselves--through superior customer service in both a physical and digital environment.

When we broached this topic during a panel discussion at ICBA LIVE, Amy Dawson, senior vice president at Visa Garage, the company’s innovation division, shared, “One of the things as an innovation team that we use as a principal for designing and building future products or businesses is that technology should enhance—not replace—the human touch. When I think about community banking, the human touch is a huge part of the value proposition that exists.”

Reframing the Question

Successfully extending the community bank relationship-based model into the digital realm starts with asking the right question. All too often, when we explore the topic of digitization, our thoughts turn to our technology stacks. Yet, the key to transitioning our in-person model into a digital plane lies in the human element. In short, focusing on ways to enhance a personal relationship just may lead to the right technology decisions.

“If we reframe the question from speed to market of technology to speed to market with what will enhance the human touch, I think it will help to prioritize what’s important within your tech roadmap,” Dawson shared. “We really recommend understanding your consumer base, as well as the desired consumer base, and what is most important to them for the future. Then reverse engineer it into what is going to enhance that community relationship.”

Looking Internally for Answers

To identify the factors that will strengthen that connection, turn an eye toward your colleagues. Do you have staff who are part of Millennial and Gen Z generations? They can serve as a great focus group, offering insights into targeted demographics while keeping in mind your bank’s guiding mission and values. Ask them how they like to send and receive funds, where friction points exist, and how they would solve for them. Those answers may just lead you to the right partners and solutions to support your customers’ needs.

While no two community banks will approach the road to digitization in the same way, continuing to prioritize the human element and leveraging internal assets, can help every community bank make strategic decisions along the journey while remaining truly authentic.

And, while you may not have all the answers in hand, today’s increasingly connected environment signals that it’s time to extend relationship-based models into the digital sphere.

ICBA Bancard prides itself on our partnership to help banks advance digitization efforts – and will be debuting a digital transformation roadmap in early Q4 to help our bank clients navigate the evolving payments paradigm.