By Jennifer Dimenna, SVP Enterprise Partner Management
As the financial market reels from the recent failure of two U.S. banks, the first since 2020, your community financial institution might be wondering if you should be worried. In truth, small and midsize institutions are not as vulnerable to the factors that caused these specific bank failures — and the recent crisis actually presents an unusual opportunity for growth.
Banks and credit unions are in a better place than they were during the banking meltdown in 2008, mainly due to increased regulation and reforms from the Dodd-Frank Act. As a community institution, your customer base is more diversified, and more representative of the communities you serve, so your institution is inherently safer than those that cater to a specific vertical, for example, tech startups. The community banking business model is also well positioned to withstand market and interest rate fluctuations.
After the recent crisis, as impacted businesses and consumers find themselves shopping around for a new financial institution, you have a unique opportunity to grow deposits by enticing these customers or members to come to your institution. Be warned, though. Your institution is not the only one vying for new business. Banks and credit unions seeking to grow deposits among their retail base of customers more than doubled in the last year, from 21% to 51%, according to the What’s Going on in Banking 2023 study by Cornerstone Advisors.
Amidst the push to grow deposits, banks and credit unions are still working to transition many traditional functions and touchpoints from the branch to digital channels. And many institutions still struggle to bring in new users outside of the branch. Transitioning to digital customer acquisition was important before Covid-19 struck, but now it’s absolutely critical.
You can better position yourself for organic growth by integrating an account opening solution into your digital banking platform. Today, digital account opening is more than a customer self-service utility — it should be a crucial piece of your digital strategy. Pairing a digital onboarding solution with a traditional branch opening option enables new customers or members to engage with you however they feel most comfortable. And as new users investigate banking options — increasingly through online channels — account opening in your digital channel allows you to put your best face forward, giving users a quick, seamless way to initiate a relationship with your institution.
Ready yourself for growth with digital solutions that can set you up for success. Read more in our white paper, Digital Transformation in Community Banks and Credit Unions: 4 Steps to Achieve Your Goals.
