Virtually anything today can be purchased with the tap of a digital button on a smartphone. Groceries, pet food, toilet paper, stocks, cars and even therapy sessions are among the myriad items you can buy at the click of an app. Yet, how many financial institutions allow a consumer to apply for and receive, say, a small business loan entirely through digital means? The answer is very few.
A great paradox of today’s banking industry is that despite the massive leap forward in tech innovation, most banks still have trouble selling digital services to customers. According to research from technology firm Temenos, banks are meeting “only the basic requirements of digital account opening for personal banking,” and even less than that for business banking. Overall, the global poll of 60 large and mid-sized banks found that only around 50% of the accounts they offer could be opened entirely on a mobile device. That number is surely much lower when it comes to smaller regional and community banks.
Some of this is regulatory-driven for sure — selling someone a loan or a money market account is different and more complex than selling them toilet paper. But still, the reality is that banks that can offer robust digital sales services can be well ahead of the curve and gain a competitive advantage going forward.