To understand how bankers will prioritize their digital strategies in light of the tumultuous year that was 2020, CSI — a leading provider of fintech and regtech solutions — polled banking executives from around the country, representing 272 financial institutions from across the asset-size spectrum. The data from this survey was then collected and used to create an executive report to help bankers gain insight into the industry’s hottest topics and strategies.
What Did Bankers Have to Say?
It’s hardly surprising that, when asked about the future of the industry in CSI’s 2021 Banking Priorities Executive Report, digital transformation thematically unified every priority. While taking stock of their 2020 performance and assessing the year ahead, banking executives almost unanimously agreed: Digital use will likely not return to pre-COVID levels.
Bankers began the survey by reflecting upon the past year with this question: please rate your bank’s response to the COVID-19 pandemic in the following areas on a scale of 1 to 5, with 5 being the highest.
- In CSI’s survey, 97% of bankers acknowledged an irrevocable change in consumer behavior when asked whether they expected digital channel use to increase at their institution even after the virus stabilizes.
- Bankers gave themselves good scores in two areas related to their pandemic response: maintaining in-branch safety (4.3/5) and Paycheck Protection Program (PPP) Loan Disbursement (4.3/5).
- However, bankers identified key areas for improvement as well, including transitioning to digital channels (3.8/5) and managing a remote workforce (3.7/5).
The takeaways? To facilitate seamless transitions to digital, institutions must obtain a better understanding of digital channels and how customers want to use them. And as bankers navigate the challenges of the pandemic and manage remote workforces, cybersecurity debriefs should be conducted to identify all the challenge areas. Reviewing internal controls to ensure all networks, devices, accounts, and systems are adequately patched will also enhance cybersecurity for remote workforces.
Addressing the Top Challenges for 2021
The CSI survey also explored the challenges facing bankers this year, asking respondents to identify which one issue will most affect the financial industry in 2021.
- Over one-third of bankers (34%) identified cybersecurity as the top industry issue in 2021. As institutions face this evolving threat, cybersecurity frameworks, such as the CIS Controls, help identify strengths and weaknesses to ensure budget dollars are effectively allocated. Beyond basic cyber hygiene, a robust framework should include due diligence on third-party service providers’ cybersecurity controls and appropriate safety mechanisms like biometrics to protect customers.
- As more consumers use digital channels, nearly 20% of bankers rank meeting customer expectations as the top issue this year. Customers increasingly demand seamless experiences, but prioritizing new technologies and striving to balance digital with the human element creates a dilemma for institutions. While embracing the appropriate technologies is essential, effective digital transformation requires a strategic view of immediate customer demand. The right data leveraged from a robust CRM tool can better inform you of products and services matched to consumer needs.
- With regulatory agencies struggling to keep pace with changing technologies, 17% of bankers name regulatory change as the top issue. Data privacy and BSA/AML modernization are among the highest priorities in the realm of regulatory compliance. Institutions must continue to foster a culture of compliance and a robust change management framework to keep their finger on the pulse of regulatory change.
Evolving Strategies for Growth in 2021
Consumers — many of whom were reluctant to try digital channels — now demand digital offerings that are seamless, secure, and convenient. Financial institutions need to leverage new and existing technology to meet these expectations if they want to retain customers and attract new ones.
To grow market share, bankers will continue reframing their strategies to examine new customer segments, geographic markets, and product types. But without employing customer data to inform digital transformation strategies, an institution’s customer acquisition and retention could suffer. The established data must drive these strategies as they continue to evolve. According to CSI’s report, bankers prioritized the following technologies to meet the challenges above:
- Digital Account Opening topped the list of technological advances for nearly 59% of executive respondents. Naturally, the pandemic drove many customers to fulfill financial needs digitally. Even when the need for digital channels has stabilized, customers’ desire to seamlessly open an account will remain.
- Mobile Banking Apps followed closely behind digital account openings, with 44% of executives planning to prioritize this technology. When utilizing digital banking apps, institutions should incorporate an integrated design across all channels to deliver consistent functionality. Some customers are new to digital, so creating user-friendly processes for those late adopters is essential.
- Digital Lending has exploded during the pandemic, with 43% of executives reporting this feature as one of the highest technological priorities. As the economic slowdown met high borrower expectations, digital lending became an essential component of a digital banking strategy.
- Customer Relationship Management (CRM) tied with digital lending among bankers’ priorities for 2021. Better utilization of CRM to capture existing customer data empowers banks to meet the needs of customers through existing channels, such as digital account opening and mobile banking apps.
Get Your Copy of the Full Executive Report
Get a comprehensive breakdown of the survey data — including insight on digital transformation, cybersecurity, compliance, and more — by downloading the 2021 Banking Priorities Executive Report at csiweb.com/2021-banking-priorities-executive-report/.