Webinar: The Path to Primary Financial Institution Status | Blend
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February 2, 2023 in Thought leadership

3 minutes

Webinar: The Path to Primary Financial Institution Status

Win long-term in a downturn with a consumer-centric strategy.

Pink rectangular card featuring an illustration of a man surrounded by digital assistants, application processes, and charts

With the confluence of rising interest rates, higher cost of living, and overall economic uncertainty, many consumers are struggling to keep up with their savings goals. In fact, the personal savings rate is currently at 2.3% — an all-time low since 2005.

As consumers are feeling the squeeze and reevaluating how comfortable they are spending money, carrying debt, and so forth, their banking behaviors are changing. How can financial institutions’ strategies evolve in response to shifting consumer needs?

In this on-demand webinar, “The Path to Primary Financial Institution Status,” Aite-Novarica Group’s Strategic Advisor Stewart Watterson discusses this and more with Blend’s Product Marketing Manager Darrell Noble. With 30 years of broad professional experience in the consumer banking industry, Watterson works with financial institution (FI) leaders to help develop their digital transformation strategies. Explore what FIs can learn from challenger banks to uplevel their digital experience and build consumer trust — even in times of economic uncertainty.

What consumers really want in banking experiences

While the best prices and rates have often been the top drivers for consumers when selecting a product or service, a recent Aite-Novarica report¹ found that that is no longer always the case. When asked, “What’s important when choosing a lender?” 58% of consumers selected “speed and ease of loan approval.”

“58% of consumers prioritize speed and ease of loan approval when choosing a lender.”

What has not changed, though, is the need for consumers to be able to trust their FI. When asked about the importance of several factors when choosing a FI, 89% of consumers selected that it is very or extremely important that their FI has their complete trust. Furthermore, 82% of respondents feel that it is very or extremely important that their FI has their best interest at heart.

FIs that can deliver the trifecta of speed, digital convenience, and trust via tailored and proactive offers will be well-positioned to become trusted financial advisors — a foundational step in the journey toward primary financial institution status.

¹ “Consumers’ Lending Preferences: And Financial Institutions’ Plans to Satisfy Them”, January 2023

What the competition gets right

When asked, “With which type of FI did you most recently open a checking account?” 64% of respondents noted that they did not choose their primary FI. Of those consumers, 21% chose a challenger bank.

Challenger banks have been successfully taking more market share due to zeroing in on a frictionless digital experience. As they are not encumbered by siloes within legacy systems, they have the agility to implement workflows that facilitate the smooth end-to-end experiences on any device that today’s consumers demand.

In addition, challenger banks excel in proactivity. Their operating platforms effectively combine previously provided customer data with external data to better understand where customers are in the life cycle — resulting in hyper-personalized offers at opportune times.

A consumer-centric strategy prevails

While challenger banks may excel when it comes to digital excellence and tailored offers, traditional FIs can deliver digital experiences that surpass the competition’s with a platform solution that integrates with their existing infrastructure. What’s more, FIs’ ability to supplement their digital offering with expert in-person guidance remains a paramount competitive advantage.

Furthermore, digital disruptors compete on rate — an unsustainable strategy. FIs can differentiate themselves by making trust their calling card. Relatedly, having consumer financial wellness as their North Star can pave the way for deepening relationships and providing lifetime value.

In this current economic downturn, now is the perfect time for FIs to reevaluate if consumers’ best interest is at the heart of their digital strategy. When asked, “Who will be the winners in this market?” Watterson replied, “Those who bank with empathy…start with a happy customer and work backward.”

“Start with a happy customer and work backward.”

Stewart Watterson
Strategic Advisor, Aite-Novarica Group

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