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How to Work With Digital Banking Service Providers to Adapt to Changing Times

As the current environment continues with uncertainty, financial institutions have found themselves needing to adapt to a rapidly changing landscape. Digital services that may have made sense six months ago may no longer be needed, while others that may have never been a serious consideration may suddenly be pushed to the forefront.

As financial institutions often rely on third-party providers to help develop and deliver these services to end-users, relationships between the two may need adjusting or re-evaluating. 

Let’s have a look at 3 questions a bank or credit union should ask when evaluating whether to hire a new digital service provider or deciding whether to continue with an existing relationship. 

Does the provider place user experience first?

Clearly, user needs come first, and a digital service provider needs to consider its users’ needs when developing solutions. 

According to management consulting firm McKinsey, banks can play an immediate role in slowing the spread of COVID-19 by helping consumers make better use of existing digital and remote channels. Thinking ahead, a third-party service provider can help a bank or credit union build new experiences that help consumers manage debt, adjust budgets, and make full use of newly-released—and still evolving— government programs.

While no company could have predicted COVID-19 and its impact, strategic partners like Lumin Digital are quick to determine whether an event will be short-lived or have a lasting impact, and quickly devise solutions that match several scenarios.

Does the provider sell a one-size-fits-all “solution?”

A single solution that may have worked in the past certainly will not work well in today’s environment. 

A digital service provider must be selected that can meet the needs of today’s complex environment. Further, the solution provided, while complex, needs to appear simple and user-friendly to consumers. 

For example, a provider may help with understanding a firm’s user segmentation data—and then take the next step to help tailor consumer service solutions. According to consulting firm PwC, banks and credit unions can use this data to identify which consumers are better positioned to ride out the crisis and those who will need more active management and outreach. Examples include converting credit card balances to home equity lines with fee deferrals or waivers for homeowners who need liquidity. 

Does the provider use data and iterate?

The provider, especially under these unusual circumstances, should be able to help a firm understand what solutions are working and what are not, and make suggestions as to next steps. Creating models of potential feature usage, while harnessing user data even on a daily basis, is a must for the third-party provider if that provider is to gain the trust of the financial institution.

Some financial institutions may have a relationship with an incumbent provider that rushes in to say that it can suddenly accommodate needs when a contract is about to expire and is up for renewal. This can be problematic because if a feature should have been delivered a while ago—or should have at least been under consideration or the early stages of development—financial institutions need to evaluate the history of the relationship and make predictions about future performance based on past behavior. 

These uncertain times require a deeper understanding of current and potential consumer behavior. Working with a third-party provider to deliver heightened consumer experience requires clarity and transparency, support for digital tools with which many users may still be unfamiliar, and new products and services for users in distress.

“The last time there was a global crisis, banks were widely perceived to be a big part of the problem,” notes McKinsey. “This time around, banks are central to the solution.”

About Lumin Digital

Lumin Digital is redefining digital banking through its proprietary user engagement platform. Through the utilization of user data and predictive analytics, banks and credit unions can create custom experiences for consumers, creating a truly personalized journey and connected relationship.

Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, Jake covers such topics as security, mobility, e-commerce, and IoT.