If I Were a Bank CEO...
Vol. 2: Learning from Competitors
In the rapidly evolving landscape of financial services, embracing a mindset of continuous learning and adaptation is essential to remain competitive. If I were a community bank CEO, delving into the successes of my competitors, whether they be credit unions, larger banks, or fintechs, could provide valuable insights to learn from and consider.
Here are the steps I’d use to effectively study and learn from them, along with potential lessons from each:
Step 1: Comprehensive Analysis
We’ll begin by conducting a comprehensive analysis of each competitor. We’ll examine the focus of their business models, customer bases, services offered, and market positioning. What do they do particularly well, where are they weak, and what opportunities do they potentially provide me and threats do they create for us? A classic SWOT can help.
Step 2: Understand “Member-Centricity” from Credit Unions
Credit unions excel in member-centricity, building trust by putting their members' needs at the forefront of their positioning and value statements. We’ll learn from their personalized approach to customer service, understanding that strong relationships foster loyalty. What channels are they using to communicate and interact with and support their members? What language do they use to speak with their members that reinforces trust and loyalty. We might want to consider ways to reinforce more of that with our customers as well as prospects we want to target.
Step 3: Study the Scope of Offerings from Larger Banks
Larger banks often boast a wider range of offerings to larger and smaller businesses, catering to their more diverse financial needs. We will study their portfolio and where they may be winning or retaining business customers today, and identify opportunities to expand our bank's services to better compete with them. And while we’ll tailor our services to our community's specific requirements, we will also consider innovative products such as comprehensive treasury services and embedded lending.
Step 4: Harness Agility and Digital Prowess from Fintechs
Fintechs are renowned for their agility and advanced digital capabilities. We will analyze their technology-driven approach to building streamlined processes and enhanced customer experiences. By incorporating fintech-inspired solutions to simplify account setup and management, digital lending, and multi-channel customer engagement, we’ll quickly be known for our agility as well. Fintechs are generally good at leveraging their data for timely interactions and personalization with users, so we should learn from that.
Step 5: Benchmark Our Digital Capabilities
We’ll also set up a head-to-head comparison of our current digital capabilities vs. competitors. This assessment will include website functionality, mobile banking apps, and online customer support with live assistance or customer self-service. Likely improvements will include more user-friendly and modern interfaces, seamless navigation, and consistent, responsive design to deliver a digital experience the customer expects.
Step 6: Foster Innovation
We’ll look for ways to encourage and reward a culture of innovation within the bank. By studying how others implement new technologies, hold hackathons or other innovation events, and collaborate or partner with startup fintechs to identify and build solutions, we’ll learn how to increase our speed and confidence as well. We know it will require us to dedicate resources to research and development, and welcome fresh ideas from our team.
Step 7: Develop Strategic Partnerships
We know that we can’t do all of this ourselves, so we’ll need to find and collaborate with technology providers, startups, or local businesses to enhance the bank's offerings. We need to have people and processes that can do this quickly, predictably and cost-effectively, with the goal of providing unique, enduring value to our customers.
Step 8: Continuous Improvement
These activities will become an entire slate of new ones that we’ll want to continue and evolve indefinitely: Monitoring competitor activities and industry trends; Continuously adapting our strategies based on changing market dynamics; Cultivating an environment of continuous improvement to stay ahead.
As a community bank today, learning from competitors is not only prudent but a strategic imperative. By studying credit unions' member-centricity, larger banks' scope of offerings, and fintechs' digital prowess, as examples, we can learn from them and develop a more holistic approach for our future.
