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Community banks, the heart and soul of many local economies, have long played a crucial role in providing essential financial services to individuals and businesses. Today, however, they face unprecedented challenges including the rising costs of operations, increasing regulatory burdens and the changing customer expectations.
But these risks and pressures are not only external. Community banks face several internal pressures, a key one of which is the burden of legacy technology systems. With the rise of fintech companies disrupting the traditional banking landscape, community banks have no choice but to compete with these nimble competitors, who can quickly launch new products and services directly to consumers.
According to the 2024 CSBS Annual Survey of Community Banks, many banks still rely on outdated systems that are difficult to maintain, upgrade, and integrate with newer technologies. on their core banking systems for essential services like account management, lending, and payment processing. In fact, 39% of bankers use their core provider exclusively for all of their services, and have no other partnerships - a reliance that comes with a hefty price tag:
- Legacy core systems can be slow and clunky, making it difficult to keep up with the fast-paced world of fintech.
- Upgrading and maintaining these systems can be a major drain on resources, limiting the bank's ability to invest in other areas.
- Outdated systems are often more vulnerable to cyberattacks, putting customer data at risk.
- Legacy systems can slow down the development of new products and services, making it tough to compete with agile fintech firms.
Furthermore, the relationship between community banks and core providers can be complex. As core providers consolidate and evolve, community banks may feel trapped and find themselves with fewer options and less bargaining power.
So, what’s a community bank to do?
Technology Investment & Community Banking
Community banks are increasingly recognizing the need to invest in technology to remain competitive. However, they often face budget constraints and may be hesitant to undertake large-scale technology projects. They are more likely to invest in solutions that offer a clear and immediate return on investment.
Key factors influencing investment decisions, include:
- Cost-effectiveness, including having a low total cost of ownership
- Ease of implementation and integration
- Vendor support and ongoing maintenance
- Scalability
A New Path Forward: Enhancing the Core Relationship
Rather than a complete overhaul, community banks can significantly improve their operations and customer experience by focusing on enhancing their relationship with their core provider. By connecting your core system with other key systems and partners, you can create a more unified and efficient customer experience that reduces inefficiencies and costs while maximizing budgets.
Imagine a world where all your teams have a single source of truth for all customer interactions, including those with your core provider. A lightweight CRM solution can make this a reality, enabling you to track case statuses, collaborate with your core provider, and provide timely updates to customers.
By integrating your systems with your core provider, you can access real-time data on customer interactions, identify potential issues, and collaborate more effectively. This can lead to faster resolution times and spare team members the heavy burden of following up endlessing to get up-to-date customer information (that may not be so up-to-date anymore).
Imagine that this system then empowered your teams with a unified communication platform where they can see and manage all customer interactions, including those with your core provider, in one place across several channels. What if team members could get instant case and customer summaries, quickly search for targeted information and know how to best respond to customers based on their sentiment with the power of generative AI?
Finally, by monitoring service levels and performance metrics, you can ensure that your core provider is meeting your needs and delivering value. And if not, what are the areas for improvement to help strengthen your relationship with your core provider and, ultimately, your customers?
OvationCXM for Community Banks: A Tailored Solution for the Future
OvationCXM offers a comprehensive solution designed specifically to meet the unique needs of community banks. By leveraging cutting-edge technology, CXMEngineⓇ empowers banks to enhance customer experiences, streamline operations, and drive growth. With CXMEngine, the world we imagined is a reality.
- Your core system talks to your team: Seamlessly connect your core system to CXMEngine with our pre-built ecosystem connectors - a game changer in today’s technology landscape. See customer information instantly for faster decision-making and better service.
- Everything's in one place: All your customer interactions, cases, and documents are neatly organized in one central hub. No more switching between tabs, digging through files or calling different teams endlessly to get the information you need.
- Robots do the boring stuff: Let automation handle the repetitive tasks and manage routine workflows, like case creation and assignment. Your team can focus on what they do best - building relationships with customers.
- Data-driven decisions: Use the power of real-time data aggregated from all your systems, including your core, for better insights into customer behavior,trend spotting, and make smarter decisions to drive growth.
- Empower teams, happy customers: Instantly access internal knowledge as well as concise case and customer summaries when customers connect with your bank. Pick up where you last left off and easily collaborate with your team in real time to deliver personalized service, resolve issues faster, and keep your customers coming back for more.
Interested in learning more? We’d love to hear about your community bank and how we can partner with you to achieve seamless operations and efficiency.
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