There’s no question that the pandemic caused devastating loss throughout the country. But as the world begins to open back up, companies are evaluating what their “new normal” looks like and identifying ways to drive more revenue into their business.
The pandemic forced us to find new ways to interact with customers. As a result, expectations for engagement have significantly increased. Apps like GrubHub and Instacart have become wildly successful because of their convenience factor. Consumers expect that from the companies they do business with, alongside providing a digital experience, ease of communication and more.
These expectations transcend all industries – including financial services. Many of today’s banks have recognized this shift and are looking for new ways to attract, engage and retain their customers, all while providing a great experience.
The increasing role of technology
The proof of the shift to digital is in the data. As a result of COVID-19, 50% of consumers now interact with their bank weekly through mobile apps or websites – up from 32% two years ago. Additionally, a recent survey by FIS shows that, in the past 12 months, 37% of consumers began a new banking relationship with a major national or global bank that had a well-established online portal and 18% of these consumers opened an account with an online-only direct bank.
For community banks known for offering a high-quality customer experience and putting their customers first, this could be an area of concern. However, data from PwC shows that community banks are keeping their finger on the pulse by finding complementary partnerships that will evolve the operations and service they provide customers. Over the next three to five years, 82% of financial institutions expect to increase their partnerships with FinTech, with an average return on investment of 20%.
While others might be waiting years to build or launch partnerships, now is the perfect time for you to benefit from what other companies can offer your institution.
Benefits of partnering with FinTech
Here are some of the advantages of embracing outside partnerships:
- Creating additional channels for engagement – Consider a partner who can help expand your communication channels and build a digital presence: from updating your website to launching a mobile app or online portal to implementing more frequent email or text message communications.
- Diversifying your portfolio – Go beyond your local borrower base and ensure your excess cash strengthens your bottom line with a partner that can originate a variety of high-quality loans.
- Protecting your business and customer base – Investing in a partner with a strong focus on risk, compliance, and identity fraud prevention can give you peace of mind that your Know Your Customer (KYC) procedures are compliant, along with other regulatory guidelines.
- Generating supplemental income – Tap into new sources of revenue for your bank, including referral opportunities and loan sources that drive fee income.
How to choose the right FinTech partner
Not all partners are created equal. To ensure you are protecting your customer experience and driving your bottom line, look for these key characteristics when vetting potential FinTech partners.
- A track record of success, including being able to navigate economic downturns
- A strong focus on data and quality, with the ability to determine which loans will perform best in your portfolio
- A streamlined process, making it easy to implement new solutions and not slow down your business
- A commitment to providing best-in-class service with quality solutions that will enhance your customers’ experience
With consumer expectations and the benefits of partnership rising in equal proportion, now is the perfect time to review your operations, identify areas of improvement for your bank, and see FinTech as a partner with whom you can collaborate to strengthen your business.