Challenges and competition can come from anywhere at any time, and you need a strategy to meet those challenges, even the ones you can’t predict. That’s why in today’s post, we’re going to look at how a team faced with a big problem overcame the odds by following a simple, yet effective, plan. In this post, we’re going to give you that plan so you, too, can overcome the challenges and competition that face your bank.
More specifically, we’ll take a deep look into each of the following steps:
- dealing with the problem;
- brainstorming solutions;
- using your resources;
- breaking through barriers;
- and reinventing yourself.
Let’s get started.
Fintechs and Community Banks: Houston, We Have a Problem
By Jeff Foster, SVP, Internet Development, FPS GOLD
If you’re a community bank, you’re frequently asking yourself, “How do we compete with the big banks with their massive budgets and new technology?” It seems like a daunting quest. “That is part of the challenge for the rest of the industry: the largest banks do it all and they do a lot of things very well.” (By Bill Streeter, Editor at The Financial Brand)
Your ability to survive depends on winning against your competitors. Sometimes you win because you’re in the right place at the right time. Sometimes it’s because you have the best product. Sometimes it’s because you bring something less tangible to the table like a relationship built on trust, and sometimes it’s because of your creativity.
Winning with Creativity
Let’s take a look at using creativity to win over customers, especially the younger demographic.
There are customers out there (Millennials and Generation Z) who seek the latest shiny thing from the most popular and powerful providers. These potential customers are maturing and becoming successful. You might even be one yourself. Regardless, your bank needs to acquire this type of customer.
Their appetite for top-notch technology and user experience is extremely important. Without the mind-boggling budgets of the big boys, community banks must be creative and resourceful to feed that appetite.
A Lesson from History
I’m a fan of creative human effort in the face of big challenges. One historic example is the Apollo 13 mission, when an oxygen tank exploded and caused serious damage to one of the space vehicles the astronauts depended on. To some, it appeared they had little or no hope for survival.
It took a while for everyone to realize how big the problem was, but once the situation had been assessed, the ground crews immediately began looking for solutions. Each of the several teams on the ground worked to find a way to bring the astronauts safely home.
The Apollo 13 ground crew solved life-threatening problems by using their training, their resources, and their creativity. They worked the problem and did not give in to panic, even under extreme pressure.
Their strategy is a good model to follow:
- Work the problem.
- Brainstorm.
- Use your resources.
- Break barriers.
- Reinvent yourself as needed.
(https://spectrum.ieee.org/tech-history/space-age/apollo-13-we-have-a-solution)
Apply the Same Model to Banking Now
Your reaction to the COVID-19 pandemic may be a good example of your own adaptability. What have you done to adjust? Who brought creative solutions to the table? Could the energy and creativity the pandemic sparked be extended to help solve the struggles you face when competing with big banks?
Work the problem. The best way to approach any problem is to start with what you know: you must have competitive technology, and you must be solid like the big banks. You must project warm service and deliver a great system. You must identify and enhance your greatest strengths. How do you do that?
Brainstorm. Could you brainstorm for solutions? Could you slice up the younger market and target those that you can serve best? Is it true that some in this new market love buying locally? Apparently they love to be trendy. Perhaps savvy community bankers have much in common with these younger customers. Some in this market appear to be drawn to local businesses and brands like your bank.
Use your resources. What resources do you have? You have your personnel, your core provider, your online banking provider, your mobile provider, and perhaps others. You might be surprised that this combination of resources can practically work miracles.
Seek help from key partners, and evaluate your needs against the offerings of matching fintechs. Most community banks want to keep third-party relationships in check and managed well. With a trusted existing partner, you may find that you don’t need to engage with the fintech yourself, but you can add the value the fintech brings for a fraction of the cost via an existing, trusted partner like your core or eBanking provider.
Break barriers. Many cores have or are building open APIs. Every worthy fintech offers API access to their services. The API orientation opens many opportunities that can break barriers by providing what would not have been possible before.
Reinvent yourself. Community banks must partner well and deploy quickly. You have likely already seen this with mobile deposit, bill payment, P2P transactions, etc. Your existing partners help you reinvent yourself to compete by adding things like online chat, video banking, and enhanced fraud analytics because of their partnerships or their ability to integrate via API.
Rise to the Challenge
Whether it is a pandemic or powerful competition, you bring value to the market. Your creative and hard-working staff know ways to serve your community. Your partners and their partners can bridge the technological gap.
Apollo 13 ground crew seemed to create something out of nothing that helped the crew survive. In reality, the ground crew succeeded because they had been preparing for years to succeed in situations just like this. I believe your financial institution and your partners have too. Work the problem. Be creative. Use your resources. Keep a cool head and together we can solve even this daunting task.
We’re counting on you to rise to the challenge. “Community financial institutions must continue to be the banking alternative that consistently delivers the financial support that consumers and small businesses need now and in the face of an uncertain future.” (Samantha Paxson, Chief Experience Officer at CO-OP Financial Services, as quoted in TheFinancialBrand.com)
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About the Author: A graduate of Brigham Young University, Jeff joined FPS GOLD in 1993 and has led our Internet and mobile banking product development since 1997. Jeff has built a team of developers who create competitive and leading-edge products. jefff@fpsgold.com