How we define community has noticeable changed over the past few years. People now have the option of being a part of a community with people next door and on the other side of the world at the same time. For financial institutions focused on building and fostering community, this means they can provide excellent service for customers down the street and beyond – something increasingly crucial as working, living, and finance management habits change and evolve with technology.
People need their financial institutions to innovate to support their evolving, and sometimes chaotic, lives. These are characteristics that form the foundation of a true digital community approach, no matter how far away their customers may be.
Societal changes inform the direction of technology, and vice versa. This has never been more evident than in the wake of the COVID-19 pandemic and the Great Resignation, which saw a record 7.9 million Americans voluntarily quit their jobs by June 2021, with some of the largest quit rates happening in the restaurant industry. These events have reshaped the way people think about working, connecting, and living.
That’s why it’s so crucial that banks and credit unions keep up with these shifts by ensuring their digital banking experience is the kind of experience people of all backgrounds have come to expect. According to a recent report on the state of technology in banking by KBW, 90% of banks are increasing their technology spending and investment by up to 25%. Two thirds of banks already have the means for customers to open an account digitally. However, the majority of those institutions – 60% – are not happy with their core providers’ ability to meet their needs. Most feel though that they have no other choice but to stick with those legacy providers despite the flaws and shortcomings.
The first step to building a community using the digital sphere is to have a website and mobile platform that meets user expectations and is frictionless, intuitive, and attractive. That’s what will get people involved digitally and make them more likely to stay for the long haul.
Creating a digital space for members, customers, and staff to interact like real people gets banks and credit unions closer to this goal.. It also means providing users with the same resources they expect from a physical location, and organizing it in an easily navigable and searchable way so they can feel empowered.
And to establish trustworthiness, and therefore a lasting relationship with any community, an institutions’s digital platform must be reliable. A study carried out by the Filene Research Institute found that customers determined their level of trust in a bank by how well their digital banking platforms met their expectations. A frictionless experience communicates competency and stability – that’s something everyone wants when they bank.
Of course, this only scratches the surface of what it means to serve a community.
“As community bankers, we're called to be community leaders, and that goes well beyond just serving on nonprofit boards or being the president of the chamber of commerce, we're responsible for community building, for ensuring that everyone our community has equitable access to credit. There's an understanding that we're elevating the economic system success of everyone for generations.” – Jill Castilla, President and CEO of Citizens Bank of Edmond
It might sound obvious, but being part of a community means knowing who that community is. For financial institutions with physical locations, that means getting involved with the people around you, especially local businesses. It’s a great way to gain visibility and educate the public about your services, as well as get to know them and what they’re looking for in a financial institution. Community meetings, events, and celebrations are excellent ways to invite your community in..
But a community doesn’t just have to be limited to the people in a geographical area, which means that digital-only banks have the unique opportunity to build and foster communities wherever they grow. This is especially important with the increase of people living as “digital nomads” who travel or move frequently, and work from a whole new location thanks to remote access.
Other digital communities exist to serve the needs of more marginalized and overlooked groups of people. For example, OneUnited Bank, the largest Black-owned bank in the U.S., has a specific focus on the needs of Black Americans. They have special services to help build savings and investments for generational wealth, something that systemic inequalities have prevented many Black families from developing and leveraging. By providing services tailored to the needs of the Black community, OneUnited’s owners hope to change that reality and bring better financial stability to Black families across the country. While they have brick-and-mortar locations, they use their website to reach customers they otherwise wouldn’t be able to access, and be a resource hub for financial education and literacy.
Daylight Bank is doing something similar for the LGBTQ community, a demographic that also sees more financial instability. Daylight Bank’s CEO and cofounder Rob Curtis told Forbes that of the 30 million LGBTQ folks in the U.S., 44% of them struggle to maintain savings. They developed a hyper-personalized approach to banking to attract younger customers. They also took special care to allow customers to use chosen names, rather than legal or dead names, on their accounts and credit cards;something especially important for trans and nonbinary customers.
These might seem like basic user experience considerations, but they have much deeper impacts on long-overlooked communities. By providing these communities with a safe and reliable place to embark on their financial journeys, OneUnited and Daylight are making significant strides towards a more equitable financial world. Offering services and products tailored to the needs of historically underserved populations is a great way for banks to increase their community presence while also generating more account opening and loan origination.
Digital services and products specifically tailored to small and mid-sized businesses are a major opportunity, but many banks are still lagging when it comes to courting these customers. As a result, small business owners have the frustrating experience of trying to do their business banking on platforms designed for individuals, not businesses, and financial institutions are missing out on a huge customer demographic.
Banks can help small businesses by offering the services they need, and in turn those businesses can thrive in their communities and bolster local economies. And it’s not just good for brick-and-mortar businesses, but for those working online, too. Digital account opening and online commercial loans are a must for supporting business clients, though are still not always available, and not always supported by legacy cores.
While SMB banking services obviously help local businesses, online services can also create communities for digital-first businesses anywhere in the world by uniting people separated by geography but united by industries.
No community has ever been fostered without honesty, transparency, and trust. When financial institution are prepared and able to share their progress, field questions from their communities, and speak directly about setbacks, they break down walls and humanize the experience of banking.
But better communication and transparency starts from the inside. You might have to set up a communication protocol that documents your goings on in a way that can be easily shared with internal employees and the public as well, whether that’s through email, social media, or on your sites and platforms.
For example, the Greater Alliance Federal Credit Union (GAFCU) recently opened a new brick-and-mortar branch in Hackensack, NJ combining the traditional in-person approach of the classic community credit union with a modern, Apple store-like approach. Their goal is to bridge the generational gaps in digital adoption, and demystify digital in a comfortable and approachable setting. Chairman Richard Vega describes it as an olive branch for the more “old school” members, and a way to encourage intergenerational relationships.
In the digital sphere, this also means creating a user experience that feels welcoming, accepting, and responsive. Customers, both current and prospective, should be able to access the information they need about your products and services without clutter or confusion, and get the answers to their questions in a straightforward way.
Community banks have the opportunity to inspire their customers to make and support positive changes of their own. It can be as small and simple as hosting a food or clothing drive to serve those in need or partnering with local community aid groups on other projects.
Banks are also in a great position to invest in and support green initiatives, which have been shown to not only facilitate environmental improvements, but business, too. They can do this through investment in sustainable businesses small and large, or offering loans and incentives for things like sustainable energy implementation or public transit options.
Fostering community in person and through digital engagement is already in the wheelhouse of many financial institutions. By doubling down on community-focused digital investments, they can continue to serve their communities and stay relevant for years to come.