Top priorities for bankers in 2014
In recent years, financial institutions have been bogged down with new regulations, causing countless resources to be shifted away from key areas such as business development and customer experience.
According to KPMG’s 2013 Banking Industry Survey, effort required and the cost of complying with new laws and increased oversight was the number one concern for bankers. These heightened costs and necessary resources diverted attention from organic growth, according to American Banker.
However, becoming more comfortable with the current, regulatory environment and facing a changing marketplace, bankers are now recognizing the importance of also improving the customer experience, such as catering to a younger audience through services and adapting channels to meet demand.
In KMPG’s 2014 Banking Industry Outlook Survey consisting of responses from 100 senior banking executives, 47 percent of executives cited the shifting demands of customers as a primary driver of transformation at the institution in the next three to five years. This includes expanding mobile banking, such as adding mobile deposit and mobile bill pay, to appeal to a younger audience.
Another key driver of transformation listed by 43 percent of bankers is the need to keep pace with technology. According to American Banker, the challenge with technology is for banks to figure out where they get the most bang for their buck.
With countless options available, the key is to nail down the institution’s specific pain points. For example, if the institution has time or staffing constraints, investing in automated risk management solutions would be advantageous and would decrease time required for data entry and basic calculations, giving employees more time to focus on the analysis. Once the institution has established areas for improvement, then management can begin researching options to facilitate growth and cope with industry changes in technology.
Ranking number three on the list for primary drivers of transformation over the next three to five years was domestic competition, cited by 37 percent of banking executives. As the lending environment improves and competition for creditworthy borrowers grows, banks are constantly seeking ways to differentiate themselves from other banks and new, alternative lenders in the space.
According to Brad Smith, president and CEO of Abound Resources, a top priority for banks should be to increasingly recommend and sell products online, as customers are now researching products online before making a purchasing decision.
With this growing need to conduct business online comes the need to simplify the customer experience, from opening accountants to applying for loans. Online tools such as the Fifth Third Bancorp quiz, which provides a customized recommendation for which checking account the customer should open, are increasingly appealing to customers.
To strategically plan for the future, bankers must address these priorities—shifting towards conducting more business online, simplifying the customer experience and allotting more resources towards growth and business development.
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