I’m tired.
We just moved, and I grossly underestimated the work involved.
I had prepared for the pain of packing, loading, unloading, and unpacking everything we own; but I hadn’t accounted for the real work of establishing new relationships for everything we need. Things like utilities, Internet, garbage pickup, grocery store, dry cleaners, dentist, dermatologist, pharmacist, eye doctor, doctor doctor (sic), barber, hair stylist, manicurist, pedicurist – don’t judge, I require a lot of pruning to be presentable.
But what about a new financial institution? Do we really need one?
My community financial institution (CFI) back home has no branches here, but it does have a mobile app. So, do I really need a new local CFI with branches full of people I don’t know?
All things equal, which is more vital: local brick and mortar or remote hometown people who I trust and with whom I share decades of history?
The thought of opening a new account and redirecting all of my bill payments, subscriptions, and mobile wallets made me cringe, so I decided to follow “the law of least effort” and stay put. That is, until I needed to wire the proceeds from the sale of our old house to the holder of the mortgage on our new house.
I called my friends at my hometown CFI and asked about the best way to transfer the “guaranteed funds” required by my mortgage holder. I couldn’t believe what I was told:
“Well, we could provide you with a cashier’s check or send a wire, but you would have to come in for that.”
“Are you saying I would have to drive three hours there and three hours back just to wire the money?”
“Yes.”
“Bless your heart,” I said. “What else you got?”
“Probably the best thing would be to open up an account at a bank where you are, then do an external transfer from your account here to your account there.”
“Wait, are you saying I should get a new bank here?”
“Yes, that would probably work best.”
My CFI of 40 years was explicitly recommending I find another bank!
This is what my friend and fintech wunderkind, Ben Metz, calls the “trans-local” problem, i.e., how CFIs remain relevant for customers who either never come into a branch or who can’t because they no longer live where the branches are.
POST SCRIPT #1: Fortunately, my mortgage holder later explained that it would accept a standard personal check, and that bit about “guaranteed funds” just meant I needed to have the money in the account I’m writing the check on. In other words, “don’t send us a bad check.” This loose use of language ticked me off but saved my relationship with my hometown CFI.
POST SCRIPT #2: Someone else at my CFI later clarified that I could originate a wire remotely as long as I satisfied some extra authentication and verification steps over the phone.
My experience has crystallized a few things that are especially important, given we’re at the beginning of a new era in which CFIs can solve the trans-local problem by making digital banking personal and by servicing remote relationships meaningfully.
Here are the take-aways:
It’s a trope as old as community banking: “our people make the difference.” It’s been said so often by so many CFIs that it’s lost its meaning, but the truth of it is about to be tested in a very real way.
What happens when CFIs put their people front and center inside digital channels at the moment of need? Does their in-person service translate digitally? Are your staff savvy enough to communicate effectively via text or video-over-IP – augmented on the backend by macros and a 360-degree view of the customer relationship?
For the last 50 years, technology in banking has been deployed indiscriminately and consistently to replace people at the CFI – think ATMs, IVRs, and digital banking. In other words, the very entities who stake their identities on personal service have used technology systematically to eliminate the people who deliver that personal service. Equating technology with self-service can be a self-defeating strategy for many CFIs, maybe even an existential risk long-term.
The good news is that CFIs now have a choice. Some digital banking solutions now help CFIs better curate the all-important line between self-service and personal service. Each consumer has a different limit of self-service. The goal of CFI technology is to make personal service (with a familiar face and name) available wherever and whenever that limit is reached. And this is the ultimate differentiator for CFIs vs. MegaBanks.
Technology at its best is supposed to minimize the mundane in order to maximize the meaningful. CFIs should not be focused on making technology seem human but rather on extending humanity using technology.
For humans, meaning is and always will be derived in authentic connection with other humans, especially at the moment need. In the new era, CFIs are positioned to develop and support more meaningful relationships that are much deeper than the shallow, transactional interactions that typically occur at the teller counter today.
And when your staff find themselves more actively and regularly engaged in meaningful relationships with customers, morale rallies. When your people can ‘make a difference’, it really makes a difference for your people.
Better Than Before
The future of personal digital banking is very bright. The best integrated and authenticated chat channels are now incorporating widgets and real-time account information that preclude the customer having to remember account numbers, describe problematic transactions, or get bogged down in unnecessary key strokes. Instead, the CFI staffer simply presents actionable multiple-choice lists inside the context of the conversational thread.
Even more promising are chat channels that are directly connected to the CFI’s core, enabling chat that is not only informational but transactional in real time. This means that instead of my CFI requiring me to come into the branch to originate my high-stakes, high-dollar wire, I will instead be able to complete a wire from inside my mobile banking app or online with the help of someone I know at my CFI coaching me through it field-by-field. Once done, robotic process automation ushers the wire through sign-off approvals and initiates origination.
This is personal service at the moment of need, and it’s better than anything my CFI has ever been able to offer inside the branch historically. This is how meaning is made, how relationships are nurtured, and how CFIs solve the trans-local problem and sustain community across geography and time.
Welcome to the new age of “better than before.”
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