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How community banks and credit unions can embrace the self-serve model without compromising their values

How community banks and credit unions can embrace the self-serve model without compromising their values
How community banks and credit unions can embrace the self-serve model without compromising their values

On the surface, the use of a self-serve model in a community bank or credit union seems completely at odds considering the people-focused philosophy they were founded upon. Their clientele is frequently attracted to the organization, based on their “personal touch and customized approach.” Yet self-serve is becoming an unavoidable part of banking and those who fail to embrace the trend risk being left behind. Why? Because increasingly it’s what clients desire and ultimately demand of their financial institution.

The Rise of Self-Serve for Banking

Conditioned by popular digital apps and online platforms, individuals of all age groups are regularly using simple interfaces to conduct everyday tasks like shopping, chatting and booking a vacation. The desire to have this practice spill over into other parts of their life is growing. The self-serve model allows customers to attend to their financial matters quickly and on their own terms. The news of bank branches closing is becoming more frequently. As more activity moves online, financial institutions are allocating greater investment into all things digital.

TD Bank, one of North America’s largest bank, presently sees in excess 80% of their transactions performed on a self-serve basis, and expects to increase that number to an excess of 90% over the next several years. The principal motivation behind the decision seems to be customer satisfaction. Adoption of this type of banking is growing and no competitive institution can afford to ignore it.

The Most-Wanted Digitized Transactions

An important consideration for credit unions and community banks to remember is that the advent of self-serve can be mutually exclusive of the need to provide the human element. Indeed, thoughtful technology can allow a financial institution more opportunity to interact in a responsive way and offer other products/services. Clients are attracted to this model for its efficiency, accessibility and timeliness. If they’ve already altered the way they manage other aspects of their life, they may be quick to abandon a financial institution that doesn’t accommodate this need.

Organizations looking to dip their toe into the waters should consider which transactions customers are most likely to embrace online.  One that has been demonstrated in the marketplace to have a high degree of adoption is payments. A study demonstrated that nearly a third of transactions of this nature are conducted on a smartphone, eliminating the need to travel to a branch. One major reason for this is because transfers irrespective of whether it’s paying for foreign invoices or sending funds to family etc. is becoming very common. Many businesses have some international aspect to them, even if it’s just ordering occasional overseas goods. If customers want to make these types of payments frequently, they’re unlikely to have the time to travel to a branch for every instance. One industry expert cited transfers as one of the five basic functions a financial institution must be able to offer online, along with viewing account balances and applying for loans.

How to Embrace Self-Serve

The notion of offering a self-serve option for the first time might seem intimidating in an environment in which financial institutions make headlines for taking big steps in this direction. One prominent Chicago bank recently  announced a branch would be replaced with total automation and comfortable couches in place of counters. In lieu of tellers, the space will host specialists and coffee machines to facilitate casual chats on financial services. 

Community banks and credit unions don’t have to take such an extreme step to embrace self-serve. This model can be best used to tackle the most frequent or in-demand customer operations. Allowing these types of transactions to execute without an in-person element can give customers a friction-less experience and allows them to travel in-branch for more complex and costly needs instead.

During the early rise of e-commerce, many retail stores feared that this practice would render their shops obsolete. While some suffered, successful businesses made the online component a complement to their regular operation and improved their overall brand and sales. Financial institutions too can find a way to integrate this practice into their culture and fabric. Self-serve may be here to stay.