By Roy Urrico
Atlanta-based enterprise technology provider NCR recently shared its take on trends to watch heading into 2022, including the maturation of personalization, acceleration of digital experiences, solidification of cryptocurrency strategies, and acceptance of the “as-a-service” model by more financial institutions.
Finopotamus took a deeper dive on those observations with NCR President and General Manager of Digital Banking Douglas Brown.
NCR, whose banking offerings include digital platforms, interactive and automatic teller machines (ITMs and ATMs), point-of-sale (POS) terminals and check processing systems, suggested a combination of quickly shifting consumer preferences, the disruptive impact of technology and relentless competitive pressures have made the strategic use of automation and digitalization more critical for financial institutions than ever before. From regulatory demands and disaster planning to staffing shortages, credit unions need to achieve more with less resources while still delivering excellent member service.
Among the trends NCR foresees:
The acceleration of digital and transformation of physical locations.
The pandemic prompted the fast-tracking of digitalization from a planned strategy to an execution phase, noted Brown. “That really accelerated the need for digital connectivity to members as an added convenience. The journey was underway, plans were started, but we accelerated these things forward.”
That is why digital-first banking, not limited to online only, will continue as a major theme next year, Brown said. “What we see is not so much a mass reduction of branch location, but a refit and a redesign of the branch presence and servicing aspects.” This includes optimizing its footprints with smaller, more digitally forward branch and retail models featuring more advanced self-service technologies, such as ITMs and branch employees migrating away from their traditional role by embracing relationship-centric advisor and sales roles.
Brown emphasized, “There's a heavy emphasis from our credit unions on a digital-first mentality and philosophy. That is the concept of digitizing the experience everywhere, not just on the phone, not just on a laptop, but engaging in a member experience and a cross-channel connected journey. That is occurring in multiple channels with a hyper-sense of personalization and awareness, but harnessing the data to do all that. That is really top of mind from the executives at our credit union customers today.”
Brown also noticed a massive sprint to leverage ITMs to augment and increase convenience of branch service and access. Now in many instances credit unions are deploying ITMs as standalone outposts or in a prominent branch role.
Customer awareness of their financial institutions’ digital capabilities at the branch is a key component of this digital everywhere strategy, Brown added.
Personalization will continue to mature, with financial wellness initiatives standing out as a significant use case.
NCR suggested as personalization efforts advance, a strong use case will include tailored advice and narrowly targeted product recommendations designed to help customers strengthen their financial health.
“One of the big strategies for credit unions in 2022 is hyper-personalization. That revolves around leveraging data to really understand and advise and guide people in a more meaningful way,” said Brown, such as looking at data patterns to help achieve their goals. “I need to know you well enough to understand what your needs, goals and challenges, and then offer you relevant advice — the wellness piece. It doesn't do me much good if you prescribed me a solution or advice that works for Jeff Bezos, I have a little bit different situation.”
It comes down to offering members options to make themselves stronger financially, and also making the credit union feel better about that interaction. “Wellness and personalization capabilities now are a really critical, and one of the big differentiators versus competitors in the neobank and fintech space,” Brown noted.
As channels continue to integrate, financial institutions will make it a priority to implement more simplified, flexible architecture to power and unify once separate experiences into more connected customer journeys.
NCR suggested by simplifying the technology that runs different customer touchpoints – from digital banking to call centers – credit unions and banks can improve efficiencies, deliver new products and services quickly and facilitate more consistent experiences across interactions of all types.
Up-to-date infrastructure also enables institutions to better participate from both member and operational perspectives in the shift toward open banking. This involves leveraging application programming interface (API) connectivity to innovate faster and match (or even exceed) capabilities offered by emerging competitors, including neobanks, big techs and fintech providers.
Also expect to see more financial institutions embrace cloud banking to help future-proof their business models, Brown noted.
Financial Institutions Continue to Embrace the “As-A-Service” Model.
Challenged with competing resources, budgets and priorities, more financial institutions will turn to the as-a-service model. This does not just mean managed IT services, but rather relying on a trusted partners to run areas such as security, compliance, business processes and asset ownership.
NCR indicates such a model significantly enhances efficiencies and helps ensure strong outcomes for financial institutions, while freeing time and resources for more customer-facing and growth-focused areas and initiatives.
Brown notes this helps credit unions get back to core competency. “The as-a-service model is really taking root with credit unions (and banks for that matter).” He explained the model revolves around two things for NCR. “We are able to offer a much more efficient and cost-effective models because historically credit unions tend to purchase a basket of point solutions, then work to manage them with all the providers to keep them integrated and current. We take all that hassle and challenge and are able to do it very efficiently and do it at scale. The second piece is that we are also constantly investing in it with a roadmap and innovation path forward, so we can keep them more current with available and new features.”
Brown also mentioned the June 2021 addition of financial self-service business Cardtronics to accelerate the NCR as-a-service strategy.
More credit unions and banks will solidify cryptocurrency strategies.
NCR observes what was once was a niche market is now receiving mainstream attention, and institutions must determine when and how digital currencies will fit into their service offerings.
Credit unions and banks, according to NCR, should be leaders when it comes to setting the vision of how digital currencies can work across all touchpoints. The buying, selling, and holding of cryptocurrency as well as its use in cross-border payments will continue to become more common next year. Financial institutions that solidify strategies and expand consumer access to a frictionless cryptocurrency capability can better compete with new threats, prevent customer attrition and grow wallet share and revenue.
In August 2021, NCR announced the acquisition of cryptocurrency software provider Liberty X and plans to integrate its digital currency platform within NCR’s ATMs, POS and kiosk systems. Brown explained Liberty X will provide NCR with a powerful set of cross-channel cryptocurrency capabilities. “We think it's really prime time for crypto because so many consumers now are aware of it. There is an interest in it and people want to participate.” Brown added NCR thinks that general public is going to prefer working with cryptocurrency through their credit union or bank, institutions they trust, and not have their members or customers go to third-party applications.”