Successfully growing a community bank requires a different set of criteria in today’s market. Excellent customer service has always been the key differentiator for community financial institutions, but speed and digitization are now top priorities for customers too.
Despite digital usage accelerating across many areas of institutions, too many banks still operate using outdated, paper-based commercial lending processes. These manual processes are frustrating and time-consuming for both lenders and borrowers alike.
Maintaining the exceptional customer service that community banks are known for is as important as ever, especially as new competitors like challenger banks, digital banking solutions and other technology providers continue to arrive on the scene. Embracing more widespread digitization can reduce tedious, manual processes and optimize efficiencies, freeing up the already limited supply of staff time and resources. This will allow bankers more time to focus on forming and building meaningful customer relationships, making their jobs more rewarding.
Attracting and retaining talent has become even more of a challenge due to “The Great Retirement.” According to the St. Louis Federal Reserve, older generations are retiring beyond the expected number of Americans set to naturally retire. More than 3.3 million people retired in October 2021 compared to January 2020, marking a 7% rise in retirements.
With leadership exiting en masse, institutions are left with roles to fill and responsibilities to reallocate. However, hiring top talent isn’t easy, especially for those in rural markets looking to fill positions that require technical knowledge and skill. Such difficulties are even forcing some banks to consider selling or closing their doors permanently. However, digitizing traditionally manual processes can combat these talent struggles.
By adopting modern technology, banks can operate on tighter margins and provide tools to help employees do their jobs more efficiently. By creating automated workflows, streamlining processes and increasing transparency into borrower relationships as well as the entire portfolio, community banks of all sizes and locations will be much better positioned to attract and keep talent. Plus, such tools enable greater lender collaboration, a significant benefit for both lender morale and company growth.
Those that fail to accept the need for digital lending processes risk being left behind. According to Grand View Research, the global digital lending platform market size was valued at $4.87 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 24.0% from 2021 to 2028. As more and more banks adopt digital lending platforms, it will become even more of a necessity rather than a commodity.
Leveraging a high-tech, high-touch approach to lending enables banks to operate more efficiently without sacrificing customer relationships. This balance is attractive for both lenders and their customers, as their job is to build relationships with customers and grow their portfolio. The banks that fully embrace automation and digitization and leverage strategic tech partnerships will be well equipped to attract talent and customers, significantly expand customer relationships and grow with confidence.