Pub. 1 2021 Issue 1

20 | The Show-Me Banker Magazine DEVELOPING A DIGITAL BANKING STRATEGY TO SERVE CUSTOMERS AND MITIGATE RISK By Steve Kent, CSI Over the last several years, our world has been leaning further into the digital realm, largely thanks to a younger, more tech-de- pendent generation. To stay competitive, community banks must digitize and develop strategies for digital-first customers. Though many institutions re-directed customers to online, mobile and call center channels in response to COVID-19, that tactical piv- ot — though important — is not a digital banking strategy. Smaller institutions have various reasons for not fully digitizing, including fear of compliance or operational risk repercussions. Not long ago, those excuses seemed valid. Today, however, they embody com- munity banks’ greatest risk. Customers Embrace Digital Banking Online and mobile banking use has grown over the last few years, and the pandemic is accelerating its adoption even more. Consumers and businesses previously hesitant to rely on digital channels are now enjoying the convenience, speed and safety they afford. With consumers fully on board and larger banks already operat- ing in a digital-first mode, community banks have no choice but to adapt or risk being left behind. Here are the three big-picture essentials for a true digital banking strategy: 1. Top-down digital mindset: Digital transformation starts with the institution’s leadership embracing the idea of enterprise-wide digitization and investing in the human and technical resources needed to serve customers through digital means. 2. CX focus: Digital strategies must work to continuously improve the bank customer experience (CX). A bank’s com- petitive advantage lies in a frictionless, personalized and secure experience no matter the transaction processed. This requires rethinking all internal processes with the customer perspective as the focal point. 3. Self-service and consultation: The final piece of the puzzle is transitioning digital channels from self-service-on- ly transactions to more offerings featuring a consultative layer. Community banks need a digital strategy that provides contextualized consultation around savings, investment and insurance products and services. Risk Management in Digital Banking Even though customers demand digital transformation, making it a reality comes with inherent challenges and risks. The most pressing digital banking risk management issues break down into two categories and should be addressed so that your institution can move forward. Organizational Challenges: • Outdated corporate culture: Entrenched processes and per- spectives can hold back your digital transformation. Promoting a