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Human-focused Digital Banking Has Arrived

How do community financial institutions (FIs) stay relevant during and beyond the pandemic?

Well, the first thing is, leadership needs to change its view of what digital banking (and digital marketing) means.

When ATMs hit the US scene in 1969, this was the first wave of what has become known as digital banking. In this iteration, it was about automating certain transactions – deposits, balance checks, withdrawals - so customers could access their accounts without having to go into a bank.

From the FIs’ perspective, automation was good for some customers, but it was even better for their bottom line, since the more business ATMs did, the less traffic was in the lobby, meaning banks could use fewer bank tellers.

Let the Automated Good Times Roll

Plus, banks were quick to realize that they could also charge fees at those ATMs to non-members.

Cost savings and extra fees is a pretty heady combination. And if all your competitors are operating in the same way you are, it’s really just a race to add more ATMs and find other ways to use newer systems – like more powerful cores and payment systems – to automate work and lower overhead, both human and otherwise.

This worked for quite a while. As technology became more powerful, much of the ‘digital’ in banking came into operations, customers saw very little innovation. FIs were automating systems and making some account services available online. But it wasn’t until after the Great Recession in 2008, that digital banking as we know it really took off.

The Next Wave in Digital Banking

When the financial system buckled under the weight of the financial crisis, technology had reached a point where computers were commonplace, as was connectivity. And mobile technology was on the ascendency.

Financial technology began to reimagine the bank from the ground up, just as retail technology had done years earlier. And fintech brought a whole new wave of competition to brick and mortar banks.

But community banks have been struggling to stay relevant going back to the early 1990s.

From nearly 14,000 community FIs in 1992, today, there are about 5000 left. And they’re under significant threat from fintechs, neobanks, alternative lenders and expanding money center banks.

New Tech, Old Challenge

The upside to this challenge is the fact that community FIs still have the qualities that most customers want – people who know their customers and their community.

Yet there are significant challenges now that mobile networks are so fast and mobile devices are so powerful. Also, machine learning and artificial intelligence has changed the front facing side of digital banking significantly.

You can get a lot done in cyberspace.

That has meant digital banking for community FIs has to shift quickly. And part of that is becoming smart about digital marketing. TV ads don’t cut it in the world of social media and omnichannel marketing strategies.

The Opportunity in the Challenge

What’s more, digital banking can help keep smart community FIs relevant. If banks can use their ‘people skills’ to personalize their banking services with digital platforms, they can grow their business with the new digital native generations of customers.

Because when it comes to big banking decisions, customers – even the young ones - still want to talk to someone and feel like their business matters. And that’s the cornerstone of community FIs. In a recent survey, UK bank CYBG found that 81% of respondents still want to speak to a person or visit a branch – no matter how advanced technology gets.

Delivering this message takes a smart digital marketing strategy that can blend hyper-targeted digital marketing with the personal service (sometimes no more than hand holding) that is only available in bank and credit union call centers and branch locations.

Community FIs still hold the power of the human relationship in this age of e-banking and e-commerce. By finding smart digital marketing solutions – including working with fintechs to build personal, frictionless digital banking experiences – community FIs can still leverage their traditional values in a digital world.


The majority of consumers still want to work with a banker.

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Jim Craig

Jim Craig



Member since

03 Nov 2016


Eau Claire, Mi

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This post is from a series of posts in the group:

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