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How journey orchestration can help community FIs square off with FinTech challenger banks

A 2020 study by Cornerstone Advisors and Strategycorps recorded a seven percent (7%) increase in the number of consumers identifying FinTech challenger banks as their primary financial institutions. These gains were offset in decreases in the number of consumers identifying mega banks and credit unions as playing that role in their lives.

Forward-thinking leaders at community banks and credit unions are aware of the threat that these FinTechs, along with BigTech, represent. Yet many face systemic obstacles within their organizations that – if left as is – will threaten their relevance to clients in the very near term. These leaders are now stepping back and rethinking how they understand their competitive environments.

Those who want to see their institutions successfully compete to attract and retain clients are taking a page out of the playbook e-tailers have used to create digital experiences that are now the benchmark for what is acceptable to consumers.

This is where a journey orchestration platform can play a key role.

Journey orchestration is more than personalization, which is often simply delivering the same message to almost everyone without being able to know if the effort is worth the expense. Forrester Research defines it as helping “fuse data across channels, touch points, and systems along the customer journey to design and plan current and future-state journeys, test and optimize journey hypotheses, and orchestrate tasks among stakeholders and with customers.”

Journey orchestration platforms in banking use multiple external data sources to present each customer or member with a digital experience that is unique to them, one that meets and anticipates their needs from the first time they visit the bank or credit union web page as a prospect.

Think of journey orchestration in banking as applying the tools similar to those used by Amazon. But unlike Amazon, who is focused on increasing transactions, financial institutions can use those same tools to deepen the relationship between people and their money – an area far more central to their lives than two-day delivery. Plus, by accessing multiple sources of data retrieved in real-time and utilizing machine learning to identify specific needs, the financial institution is able to respond as customer and members go through various life stages. The same thing they do so well in a branch.

Leveraging these capabilities will require financial institutions to change how they think of technology. Too many community banks and credit unions see new technology as expensive, complicated, or risky. The fact is, new technology is increasingly cheaper, easier to use and delivers a better total cost of ownership than legacy solutions.

There are journey orchestration platforms developed for financial service organizations that can be deployed without building complicated integrations to legacy core systems or outdated data warehouses. Also, many journey orchestration platforms offer SaaS-based delivery options that do not require a local bank or credit union to hire expensive new resources or undergo a disruptive project.

These platforms must become mainstream in the thinking and strategy of the leadership at community financial institutions that want to be competitive now and in the future. The combination of big data with artificial intelligence levels the playing field for these banks and credit unions by delivering a digital experience not previously available.

As one banker recently stated – “This is a game changer.”

Can traditional players break free of how they have seen banking in order to understand how FinTech and BigTech have rewritten the definition of what banking is? History is littered with companies that could not make this jump when innovative players rewrote the script in their industries. It would be a shame for community banks and credit unions to realize this fate when the ability to adapt, survive and thrive is available.

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