Small and midsize financial institutions (FIs) – which have less than $ 100 billion in assets – do not expect to compete directly with the quality of digital user experience (UX) on offer at most US banks due to their small tech budget Can. According to 2020 e -market data, the nine largest US banks accounted for 60% of total banking IT / technical spending as of May 2020.
And with the onset of the coronovirus epidemic eventually forcing banks of all sizes to reduce and digitalize in-person services, FI faces intense pressure to keep up with the demands of digitization. Despite the obstacles small FI can face when it comes to a digital transformation, there are many advantages and strategies they can use to reach success and remain competitive in the space.
How can small FIs use digital to their advantage?
Although small and midsize FIs may lack financial resources as large counterparts, they have higher consumer confidence than some of the largest US banks. This trust could compensate for some of his delayed innovations. Additionally, their deep customer relationships may enable them to roll out more granular personalized products.
Small FIs can offer more competitive rates on financial products than large and giant banks, which they can combine with convenient application processes to deepen loyalty.
Innovation strategies for small and midsize FIs
Despite the financial and digital constraints FIS sufferers tend to be small and mellow, there are key strategies they can exploit. Below are some strategies in the Insider Intelligence Strategies for Small and Midsize FIs report:
- partner: Open to small FIs are often the best choice due to cost efficiency and rapid time to market, either in conjunction with fintech or software vendors to leverage their existing products or to shape the design of new ones.
- Create: Creating digital products and services from scratch with no or minimal input from vendors is usually prohibitive for small FIs, but some are adapting this approach by heavily tailoring off-the-shelf products.
- exchange: Participating in consortia to pool resources and exchange best practices is an ideal fit for small FIs, enabling them to achieve more collectively in terms of digital user experiences independently.
Want to learn more?
The Insider Intelligence Innovation Strategies for Small and Midside FIS report discusses the unique challenges and advantages FIS faces in relation to digital innovation; Outline innovation strategies open to them, and their pros and cons; And gives real-world examples of these strategies in action.
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