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Episode 7 - Budgeting for Your Bank or Credit Union Digital Branch

Meredith Olmstead
Nov 17, 2021 1:49:00 PM

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Podcast Episode 7:The FI GROW team define what a Digital Branch exactly is, why it's important for your financial institution and best practices.

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Transcription:

Have you ever been talking about something that's really useful and thought, "That's a great idea, let's hit record so we can share this with everyone?” If you're looking for best practices for your bank or credit union, join us while we talk all things sales, marketing, and strategy for financial institutions. Let's make it happen with FI GROW Solutions.

Meredith Olmstead:

Hi, I'm Meredith Olmstead, the CEO and founder of FI GROW Solutions.

Penne VanderBush:

And I'm Penne VanderBush, Chief of Strategy.

Meredith Olmstead:

We were just sitting here having a great conversation. And we thought we'd hit record and talk to you guys today about budgeting for a digital branch. And the way this came up was, I'd actually recently, I've recently written a blog on this topic. This very topic, on their top priorities for branch, for budgeting for the budgeting season coming up. And Penny was giving me a such a hard time because she said, even though I talked about digital branches, I spent less than three long paragraphs on the topic. And there's so much more to it. So we wanted to spend a little bit more time talking about budgeting around a digital branch, and some of the challenges and some of how you can get your digital branch built. And with the budget that you need it for.

Penne VanderBush:

Yeah, absolutely. So before we jump in there, why don't we give a quick recap of our definition of a digital branch? Because there's probably listeners saying, well, we have a website. Our website is our digital branch. So let's start there. In your opinion, what's a digital branch and how's it different than a website?

Meredith Olmstead:

Yeah. So a digital branches is a website. It is incorporated in your website. But it's better. It's basically when a customer, or a member if your credit union, can come to your digital channels and do anything and everything there that they could do if they walked into a brick and mortar location. And so it's when there's a digital interactive experience there. They can apply online. They can interact with a person. They can find out all of the answers to all of their questions, and explore, and do some educational research if they need it. And it's personalized to them. So it shows them information that's more relevant to their experience because they're an identified contact, or they're an identified person in the digital realm. I don't know. Did I get it all?

Penne VanderBush:

I think so. And let's not forget about the live elements of it, right? Like live chat, live video banking. I mean, we're in a post pandemic world right now. So a lot of that was really accelerated. We saw that with our clients. And we saw that really across the industry. Where video banking and more of that interactive, whether it's in the palm of your hand, or at a desktop computer, that you can really sit and talk with your banker or your member service representative face to face now. And it's more commonplace. So digital branches had to accelerate really fast to get there. Which makes it a really timely topic. We're heading into budgeting season. And I think the blog post really hit on it, but I think there's so many more points when we talk about digital branch.

Penne VanderBush:

I mean, one of the biggest things we hear from clients, and from potential clients, when we talk about digital branch is the budget. And it almost has me wondering a little bit, do you think the budget has become almost an excuse for not developing the digital branch? Because it's quick. The response is like, oh, we can't budget. We can't budget. It's a very fast response. And it's a lot of work to build one. So I don't know.

Penne VanderBush:

I've kind of been thinking, is someone... I don't want to say it, but like is someone at fault? Should the marketer be doing a little bit more to convince the rest of the executive team and their peers that they need this? Or should the executive team and the CEO really be doing their own research and understanding why this is so important, and why they need it? Where do you think some of the shortcomings are? And do you think that a budget kind of is a quick excuse in some cases to put it off till next year?

Meredith Olmstead:

Yeah. I think that's a really great point. And honestly, I think that what ends up happening a lot of times is people think of the digital branch as a marketing initiative. But really it's not, really it's an initiative that has to incorporate every other major department in the financial institution. And whenever you have something like that going on where say you've got chat, live chat, that you want to bring on live. And you want to start running that, you probably have to incorporate operations, and retail, and maybe even a phone call center into the mix there. As well as anybody else in your executive team. And so I think that maybe not so much about, it's not so much about blame as much as it's just understanding that it's kind of a shared blame, I think, that goes around.

Meredith Olmstead:

And I think a lot of times budget is a really easy reason to delay, or to not make a decision, or not try something new. But in today's day and age, the digital branch is not something that you can set to the side. I mean, if there's one thing I think that could have come out of my blog that I wrote, if there's one thing that you could be focusing on for 2022, it should be all of the digital parts and the interactive parts of a digital branch. Getting those live by the next year. I mean, I think that should be, that's a reasonable goal, and should be a goal for any financial institution.

Penne VanderBush:

Absolutely. And I think you're really hitting the nail on the head with it being something for, it's not just the marketer's responsibility, right? If you were looking at building a new brick and mortar location somewhere, you would have the majority of the executive team, maybe some outside consultants, in there. You're talking traffic count. Do your competitors have brick and mortar locations? Is it an up and coming area. Are restaurants moving in?

Penne VanderBush:

There's so much research that happens when we look at a brick and mortar location. From the extent of building one or maybe even closing one. But there's a lot of people involved in that. And I think you're right that when it comes to the digital branch, people often think it's a website, or it's the marketer's responsibility. And don't really think of it as something that's really more vast to the entire organization. That whole executive team. Especially your sales and your service areas. Using a CRM integrated into that digital branch so that everything that marketing is doing is working with the backend. And you're learning from one another. And just overall really enhancing that experience for anybody who's looking for you digitally.

Meredith Olmstead:

Yeah, absolutely. Absolutely. And I think, too, from a budget perspective, start comparing what a brick and mortar location would take to construct and put up with what you're going to spend on your digital branch. I mean, why wouldn't you be spending a comparable amount of budget on a branch that's open 24-7, 365? That's fielding the most traffic of any branch you're ever going to have. If it has all of the right capabilities, it could be driving the most new revenue, the most new accounts, the most new loans. All of those things could be coming in through your digital branch.

Meredith Olmstead:

And I think we give... A lot of times we give websites way too small of a budget. Or you give a marketer way too small of a budget to work with in order to build a digital branch. Because you're not really thinking of it as a digital branch. You're thinking of it as only a website. But I think if you really reframe it as an actual brick and mortar, another brick and mortar location, an actual branch location, I think that there should be, or maybe there could be a slight shift in the budgeting priorities. Or maybe help getting more people on board for the budgets that will be needed in order to really fully implement all of those capabilities that come along with a really fully robust digital branch experience.

Penne VanderBush:

Yeah, absolutely. A hundred percent. You know, like you said, it wasn't given enough weight and then it's not given the budget. It's not given the priority. And it is. It's open 24-7. And it feels like the up and coming generations, for years as credit union marketers or financial institution marketers, we talked about the millennials and gen Z. And at this point, it's everybody. Everybody's got that smart phone in the palm of their hand. Right? So I think that's definitely heavy focus.

Penne VanderBush:

So I know we're telling everybody, it's definitely a priority. It absolutely is a priority. Maybe some quick advice, if it does get cut from your budget again this year. So how have we helped some of our clients really be able to present to those who need to hear it? Whether that's a board of directors or an executive team. Or a single point of contact, like a CEO. We've housed a lot of clients by really understanding and capturing leads on their way into those third party applications. Which we haven't always been impressed with some of those third party applications.

Penne VanderBush:

We see a significant drop off in people who start those applications and then fall off. So we've encouraged people that we've worked with, some of our clients, to capture those leads on the way into the application so that we can get a better understanding of potential lost revenue and lost growth.

Meredith Olmstead:

Absolutely. Start putting some numbers to it. And really understanding, okay, what are the leads coming in? What's the potential revenue that they could represent, basically, Say the average of an auto loan. That the average value of an auto loan, or some other product or service. And then really start doing some math on it to really prove all of the potential leads that are coming in on that digital side of the business. And that should be justification enough to start treating your digital branch with the priority that it deserves, and the respect that it deserves.

Meredith Olmstead:

So we actually have a really great free webinar on building your digital branch in the FIGROWTH Academy. And so if people want to check that out, they can. So if you go to figrowthacademy.com, we have a free webinar there all about building your digital branch. And we actually look at, I think in that webinar, you and I look at a couple of websites and really talk about whether or not they're hitting all of their digital branch needs. So it's a great resource for people who are wanting to kind of delve deeper into this topic.

Penne VanderBush:

And the price is right. Free, right?

Meredith Olmstead:

Yeah. Of course.

Penne VanderBush:

And there's tons of great information in there. Definitely hit up by figrowthacademy.com. Get that webinar. And really start putting together for your budget in this upcoming year. Digital branch as your priority and making sure that, make it happen. Make it what it needs to be. Because it does. And we don't want to see more institutions becoming irrelevant. And it's really important. So I know I hope that you guys give it top priority. And Meredith says as well as all of us at FI GROW solutions are telling you that digital branch has to be your priority for 2022. So go make it happen.

Meredith Olmstead:

Thanks everybody.

Penne VanderBush:

Bye.

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