With 2022 underway, much of the macro environment continues to evolve amidst uncertainties including inflation, regulatory changes, “The Great Resignation”, and continued impacts of Covid-19. Leaders at financial institutions must focus on controlling what they can, including these six priorities to strengthen and grow their organizations.
1) The Virtual Experience
The past two years have driven significant shifts in how business is conducted. Digital banking adoption is at an all-time high and we can expect this trend to continue. Customers are now comfortable with virtual meetings and, in many cases, prefer this option over face-to-face meetings. Bankers should consider how to adopt this technology into the normal course of business, not just for servicing accounts, but also for growing new loan and deposit relationships. Human interaction remains important, and this can be maximized through virtual channels.
2) Data And Business Intelligence
Financial institutions have a wealth of information about their customers. In many cases, they know where their customer works, how much money they make, where they shop, and what they do for entertainment. Financial institutions also know what bills their customers have and to whom they pay monthly. This data provides a significant opportunity to cross-sell additional banking products and services to customers. This data also helps financial institutions identify their best customers, build retention plans to keep them, and acquisition campaigns to find other similar prospects.
3) Process Automation
Achieving greater scale and efficiency is a top priority for most organizations as we continue to combat historically low operating margins. The first step to automation is eliminating paper and moving to digital records. The second step is to eliminate predictable, repetitive, manual entry tasks through Robotics Process Automation (RPA). Once RPA is in place, organizations can implement Machine Learning (ML), which allows the bots to make decisions in the absence of human intervention.
4) Cyber Maturity
Cybercrimes are at an all-time high. Threat actors continue to build sophistication, and attacks like ransomware are now offered as a service on the dark web. Organizations must continue to build awareness and maturity around cybersecurity controls and processes. Having the ability to detect a threat and respond in real-time is critical. Organizations must also understand that employees are often the weakest link when it comes to data breaches. Therefore, ongoing training and testing is necessary to ensure awareness levels remain high.
5) Core Relationships
The core operating platform that drives financial institutions is a big factor in the organization’s ability to enable its FinTech strategy, power digital banking solutions, and enhance back-office operations. There is significant movement in the core market as challenger cores begin to put pressure on the legacy providers. Institutions should evaluate the effectiveness of their current core, understand opportunities from the challenger cores, and be mindful of contract dates and opportunities to increase functionality and decrease cost.
6) Mergers And Acquisitions
The M&A market is very active in 2022 as many banks look to achieve growth, scale and critical mass to compete in a difficult operating environment. If your institution is interested in a buy or sell transaction, you’ll need to plan accordingly. No matter which side of the transaction you’re considering, there is work to be done in preparation. Engage experts in respective fields to help build the strategy.
By focusing on these six priorities, your financial institution will be best prepared to compete in an ever-evolving market. Schedule a free consultation today to talk with our team of banking and credit union experts and discuss how your institution can focus on priorities in 2022 to achieve growth and meet business goals.
