If you are in the business of banking, then you are now in the business of digital banking.
Digital isn’t the future. Digital is here. In fact, it’s been the paradigm for at least a few years. We just may be slow to catch up.
I think we all know the digital realm can’t be ignored, but it’s hard to approach when you don’t understand it. That’s why many banks tiptoe around the edge. And it’s time to dive in.
A couple of giants (Bank of America and Chase) have proven that consumers prefer the digital world for their banking. And why not? A consumer can essentially carry a bank in their phone in their pocket.
We’re about to use two big banks as examples. You’re a community bank, we get why you might not see the correlation. Sure, it’s hard to compare trillions of dollars in assets to community (or even regional) banks.
But the size of Bank of America and Chase indicate that they have an incredible mix of customers. One might go as far as saying it’s a cross section of the entire country—a statistically valid representation of consumer behavior across America.
I’m the one who might say that. And it’s true.
Two Big Signs
In the second quarter of 2018, Bank of America announced the number of deposits made through its mobile app exceeded those that occurred in person for the first time in company history.
If you think that’s impressive, let’s rewind back to 2015. That’s when JP Morgan/Chase made a similar announcement.
Meanwhile, banks across the country are investigating/testing/just-trying-to-wrap-their-arms-around the concept of interacting with clients in the digital realm. That’s when the real questions emerge:
- How do we advertise to clients digitally?
- So we drop them straight into the website?
- Can we give them a comparison page?
- Does our account application/signup work on mobile? On desktop? At all?
- Can our clients fund an account without coming into the branch?
- We’re landlocked in a deposit-poor environment—can we start a virtual bank?
These are questions your bank must answer. Soon.
The hard data is in. We know just how much of an impact digital banking technology is making. Let’s look to Bank of America’s 2018 Q2 earnings call for some added context:
- 76 percent of check deposits were made through mobile platforms or via ATM.
- The company reached 35.7 million in active digital banking users (of about 50 million total clients). That’s a little over 71 percent.
- Online auto loan sales exceeded those made in person in just one year since the program’s rollout.
- Over the past 10 years, Bank of America shrank from 6,131 physical branches to 4,411 (CNN Money).
Milestones like these are the ultimate writing on the wall: If you are in the business of banking, then you are now in the business of digital banking.
Your clients are migrating to digital services—or they want to. And if they can’t make that migration at your bank, they very well may emigrate to another institution.
I know these big, definitive numbers can feel scary and intimidating, but I don’t see them that way.
Digital banking tools have been proven successful time and time again, and they may be the closest thing to a surefire win for your bank. You might be saying, “Well Josh, our bank already has an app. So, we’re good, right?”
Maybe. But probably not. I see banks lagging behind in one key area: attracting new clients.
Put What You Have to Work
The only way to be successful in the digital sphere is to actively attract clients to a comprehensive digital experience that successfully onboards them, and then nurtures them throughout the entirety of their banking relationship. Simply put, there’s a difference between having an app and having a marketing campaign that attracts people to your bank. Too many institutions check the proverbial “I have an app” box and forget that the app is a product.
In today’s brand-centric culture, people are buying product and they’re buying experience. And too few institutions have a brand-centric advertising strategy to draw new clients in.
These numbers aren’t telling us that BofA or Chase have a better app than you. They’re just doing a better job of attracting new clients and onboarding them.
Your bank likely has digital capabilities, but are you attracting clients to use them—present tense? This is happening now.
It’s time to stop kicking water at the edge of the pool and dive in.