Competing with the IT budget of the big financial institutions is a challenge for smaller institutions, so it’s especially deflating to roll out a digital banking platform only to earn no more than a collective shrug from consumers in your market. You’ll only realize the full value of these new technologies when you view them through the lens of your users’ needs for connection and community.
Digital Banking is a Means, Not an End
Credit unions and community banks have a longstanding tradition of differentiating themselves from the big banks by their strong sense of community. Their mission has always explicitly included the goal of providing consumer-focused, need-driven services as opposed to simply taking a profit, which is why those community-based institutions have always enjoyed high levels of trust.
The rise of digital banking has caused that ground to shift. Surveys from the Filene Research Institute, carried out in preparation for its 2019 report about The Credit Union of the 21st Century, showed that consumers’ trust is often determined by how well your digital platform meets their expectations. While your mission and community ethos are still important, failing to deliver a seamless, friction-free digital presence is perceived as a lack of competence and — by inference — trustworthiness.
Simply having a digital platform that meets those expectations isn’t enough; competent use of technology is just the table stakes in this game. To succeed and thrive, you have to leverage the technology to build trust and community.
Make a Space for Community Online
One direct option is to explicitly create an online community for your institution. The barrier for entry is lowest if you rely on an existing social media site like Facebook to host your community, but that might not be your best option. James Robert Lay, author of Banking on Digital Growth and founder/CEO of Houston-based consulting firm Digital Growth Institute, argues strongly for creating and owning your own space.
“Any time you look at building a community on something like Facebook or LinkedIn and or Instagram, you’re building your community on someone else’s land, and that’s rented property,” he says. “You do not own that. Facebook has that community.”
If you lack the resources to create and maintain an online forum with in-house personnel, Lay suggests using a resource like Mighty Networks to create your community. The hard work is mostly done for you, but you retain ownership of the community and its content.
Create Opportunities for Users to Help Users
There’s a joke about a beleaguered pastor who took to spending his lunchtimes at the train station. When concerned friends asked why, he replied, “Because it does me good to occasionally see something move without me having to push it!”
For community-based financial institutions, the lesson is that you haven’t yet achieved a meaningful degree of “community” if you’re still doing all of the pushing. It’s much more powerful and organic if you create ways for users to help each other. That should be a conscious goal of your online community forum. That means creating threads where users can request or offer help.
Your community doesn’t have to be — and arguably should not be — financial. It should focus instead on simple things like helping a senior run errands or connecting parents with outgrown toys to those with younger kids. Those are the “it takes a village” moments that create genuine feelings of connection, and as the host of the community, you’ll benefit from that.
Emphasize Financial Education…
On the other hand, if there’s a single service financial institutions can offer with the highest, broadest value, it might just be financial education. That’s usually envisioned as a service targeted at the youngest consumers, who may not yet have acquired those basic skills, or at millennials, who have deferred traditional life goals like homeownership because of low income and high debt in their post-2008 formative years.
Yet, financial education can also be a boon to the elderly who are navigating the dark tides of retirement and assisted living in uncertain times, or downsizing boomers who are preparing for the next stage in their financial journeys. They may have had a clear road map for decades, but the world — and their circumstances — are in flux, and they often need guidance about how to revise and continue to meet their goals.
Your digital banking platform and your online community forum both provide avenues to offer and deliver financial education. Your banking platform is especially valuable, because you can leverage its rich data and predictive analytics to offer the right advice, at the right time, to every client, on a personalized and highly granular basis. That level of service builds trust, and a strong sense of community.
…or Outright Coaching
Lay suggests looking beyond financial education, which is essentially passive, to offer active financial coaching as a next-level form of engagement. He likens this to new gym users signing up for sessions with a personal trainer, as opposed to just Googling an exercise regimen on their own and “winging it.” Those who receive the coaching, he argues, are more likely to stay and more likely to take full advantage of the institution’s services and products because of that personal connection.
“We’re seeing that right now [with the COVID pandemic],” he says. “Human beings were not meant to live in our homes in isolation. We’re communal creatures. Coaching does provide that.” Coaching also provides a path to monetization. “You can create non-interest income going forward. There’s actually a firm already doing this called The Financial Gym. One of the things The Financial Gym brings is that they are building a community … you could have a communal coaching program, where we’re all working toward a similar goal.” The end result, he says, is that your users will feel that “I’m not alone in this.”
Rewards, Affirmation and Accountability
Providing rewards to users of your digital banking platform is another way to create community. At the simplest level, you might opt to offer transactional rewards such as improved rates on one product for those who already have another. Another explicitly “community”-oriented option could be gift cards to suitable local businesses.
Your digital platform expedites that kind of offering by enabling you to analyze a consumer’s financial activity and suggest appropriate new products and services, and deliver suggestions directly in the app or on the website. You can take it a step further, though, by making the app itself a partner in helping your consumers reach their goals.
That means defining the steps along the user’s journey to a chosen financial goal, and what prompts can produce behaviors consistent with that goal. Ultimately, says Lay, it comes down to basic human needs: “It’s just affirmation. Pat me on the back, tell me I’m doing a good job. Hold me accountable.” Those simple, less-tangible rewards — collectively known as “gamification” in behavioral circles — are surprisingly effective in influencing consumer behavior. They’re the financial equivalent of “likes,” “shares” and “re-tweets” on social media.
Identify Niches Where You Can Excel
Another option is to use your digital banking platform’s analytics capability to identify specific niches — potential communities, if you will — in your existing user base and the larger outside community. Essentially, you’re mining your consumer database to discover which subsets of your users are especially compatible with your institution’s mission and mix of services.
That’s a powerful strategy. The Filene Institute found that credit unions that focused on consumer compatibility, as opposed to “all things to everyone” marketing, significantly outperformed their peers. Prioritizing a tightly focused niche market — one where you can out-perform rivals and provide absolute, over-the-top value — is a strong community-builder. Users and potential users who meet that profile feel that “they really ‘get’ us!” and recognize their commonality.
That coincides with Lay’s experience, as well. “The only way a financial brand is going to be successful in building a digital community,” he says, “is if they have the courage to identify a niche market segment that they want to create exponential value for.”
Create Opportunities for Consumers to Reflect on Your Connection
The insights you glean from your digital banking platform can also be harnessed to remind consumers of just how far they’ve come. Using the software’s data analytics to provide personalized, emotionally resonant reminders of milestones along the way makes a very human connection with the consumer. It’s not just a way to encourage consumers to transact more business with the institution — although that likelihood increases as well — but creates a strong emotional bond, which in turn can influence others.
Over time, usership in a community financial institution becomes a core part of the user’s identity and self-perception. Changing between commodity service providers is easy; changing part of who you are is not.
Be Sensitive to Community Needs
If you really want to “build community” in the marketing sense, one of the most-fundamental ways to do it is by literally building the communities you’re in. This is a longstanding strategy for financial institutions, but technology extends your reach in ways that didn’t exist before.
Your online community provides a suitable forum to promote the community organizations you support as an institution. You can also tie those partnerships to your own rewards programs by providing a “donate” button for chosen organizations and offering incentives or favorable terms to users as rewards for their support. If you have a “micro-savings” program that rounds up purchases and puts the extra few cents in a savings account, offer your users the option of contributing those funds to a worthy local organization instead.
On a related note, your digital banking’s predictive analytics can be used to identify community users who are left out by your current offerings. If your loans are predicated on employment income, for example, you’re poorly situated to help users who juggle a variety of entrepreneurial revenue streams and “side hustles.” Analytics can show you which of your users are good risks despite non-traditional incomes; by meeting their financial needs, you help keep your local economy in motion. That’s good for everyone.
It Starts With the Right Platform
It’s always important to remember that technology isn’t an end in itself, but the means to an end. Your ultimate goal is to build a thriving community that relies on your institution, and technology is simply a tool to help you arrive at that goal.
Not all tools are equal, though, and your choice of banking technology can simplify or complicate the task of meeting your users’ needs. Lumin Digital’s fast, secure digital platform is a best-of-breed offering that provides the speed, ease of use and seamless integration your consumers expect, in conjunction with the powerful analytics abilities you need to reach your potential.
Contact us today to request a demonstration, and learn how Lumin Digital can help you build your own community.