Consumer Banking in the Digital Age: Benefits and Challenges

Consumer banking has undergone a significant transformation in recent years, driven by technological advancements and changing consumer behavior. Digital banking has become the norm, with 70% of consumers using online banking to manage their finances.

Mobile banking apps have made it easier for consumers to access their accounts, with 60% of users checking their balances and making transactions on their mobile devices. This shift towards digital banking has brought numerous benefits, including increased convenience and accessibility.

However, this shift has also created new challenges, such as cybersecurity risks and the need for consumers to be more vigilant about protecting their personal and financial information.

Types of banks are diverse, ranging from small, locally-run community banks to large, global corporate banks like JPMorgan Chase and Citibank. These corporate banks have massive assets, with the top five largest U.S. commercial banks by assets being JPMorgan Chase, Bank of America, Citibank, Wells Fargo, and U.S. Bank.

Community banks and corporate banks have different business models. Credit unions, on the other hand, are non-profit cooperatives where members pool their assets to provide loans and other financial services. They typically offer better interest rates to their members because they're not corporate entities seeking profits.

The key differences between corporate banks and retail banks are their customer base and services offered. Retail banks serve individuals, while corporate banks cater to companies and corporate bodies.

Retail banking offers deposit, access, and lending services to individuals, making it a customer-oriented approach. This is in contrast to corporate banking, which serves institutions and businesses.

Retail banking typically involves lower transaction values compared to corporate banking. Corporate banks, on the other hand, provide higher-value transactions and services to businesses.

The source of profit is also different between retail and corporate banking. Retail banking's main source of profit comes from the difference between the margin of interest of borrowers and lenders, whereas corporate banking's source of profit is the interest and fees charged on services provided.

Corporate banks offer a range of services to businesses, including loans and other credit products, treasury and cash management services, equipment lending, commercial real estate, trade finance, and employer services.

Here are some key services provided by corporate banks:

Langley FCU is a great example of a credit union that's thriving. They've achieved 37% growth in new deposit account openings. This kind of growth is impressive, especially in a competitive financial industry.

Their success is likely due to their ability to offer personalized service and competitive rates to their members. Langley FCU has managed to attract new customers and retain existing ones, which is a testament to their strong business model.

Banks generate income by lending out deposits to other clients at a higher interest rate than they pay on customer deposits.

The Federal Reserve used to require banks to keep 10% of their demand and checking deposits in-house overnight, but this was changed to 0% in March 2020.

This is known as the reserve requirement, a safety and liquidity measure that allows banks to lend out the remainder of the deposit on hand.

Banks charge interest rates on these loans, which is how they earn income.

Consumers can feel confident in their bank deposits, knowing that they are insured by the Federal Deposit Insurance Corp. (FDIC).

As of March 31, 2023, the FDIC insured 4,672 institutions, including commercial banks and savings banks.

The total amount of assets the FDIC insured was $23.72 trillion, and the total amount of loans and leases insured was $12.212 trillion.

Consumer banking offers a range of services to help you manage your finances effectively.

A retail bank provides access to basic banking services, a source of credit, and financial advice. This includes checking and savings accounts, which are essential for storing and growing your money.

Checking and savings accounts are available through a retail bank, allowing you to manage your daily transactions and long-term savings goals.

Retail banks also offer mortgages, credit cards, and foreign currency and remittance services, which can be used for large purchases, emergency funds, and international transactions.

Automobile financing is another service offered by retail banks, enabling you to purchase a car or other vehicle with a loan or lease.

Here are some common services offered by retail banks:

Digital banking is all about convenience and speed. With nCino's end-to-end automation, banks can quickly meet growing consumer expectations.

Your customers can start an application from anywhere, get visibility into the application status, and receive digital customer service when they need it. This level of transparency and support can make a big difference in their overall experience.

In fact, with a partner like nCino, banks can streamline their internal processes to work swiftly and meet customers' expectations. This is a game-changer for consumer banking, allowing banks to deliver timely, personalized offers to customers when they're making a decision.

In today's digital age, customers expect to be able to open deposit accounts on their own terms. nCino's Deposit Account Opening Solution makes this possible, allowing customers to open accounts anywhere, anytime, on any digital device in three minutes or less.

This level of convenience is a game-changer for banks and credit unions, enabling them to simplify onboarding and drive faster application conversion. By streamlining internal processes, institutions can work swiftly and meet customers' expectations.

With nCino, customers have the freedom to start an application from anywhere, and they can even get help when they need it through digital customer service. This personalized approach enhances the customer experience and leads to deeper relationships with loyal customers.

Ready-to-Deploy Onboarding Journeys can activate growth by providing transparency and instant feedback to customers and bankers. This approach can lead to a YoY increase in digital home equity applications.

By using retail banking software, you can offer online applications and origination for consumer products, such as deposits and loans. This can create transparency for bankers in-branch and reduce friction from manual tasks and document collection.

Decrease onboarding, account opening, and loan origination times is a key benefit of using retail banking software. This can be achieved by automating manual tasks and streamlining the application process.

Here are some key features of Ready-to-Deploy Onboarding Journeys:

Customer experience is everything in consumer banking.

60% of financial progress is made by customers who have a seamless experience with their bank. This means that banks need to simplify their processes to focus on helping customers make progress.

A One-of-a-Kind Digital Experience for Retail Banking is what nCino offers. This includes end-to-end automation, digital customer service, and timely, personalized offers to customers.

With nCino, customers have the freedom to start an application from anywhere and get visibility into the application status. This level of transparency and flexibility is what customers expect from their banks.

One Platform Experience is what nCino provides, creating better experiences for customers with account opening, loan applications, and robust analytics. This means that banks can streamline their internal processes and meet customer expectations.

Retail banking needs to invest in customer experience, and this includes personalizing customer journeys, empowering agents, and boosting human-AI teamwork. By doing so, banks can serve customers faster, better, and smarter.

Customer Data Management is crucial for running personalized, relevant, and contextual marketing campaigns. This means breaking down data silos and using data to create meaningful experiences for customers.

Generative AI can improve customer care, but banks need to know where to use it, what to have in place before they start, and a few risks to keep in mind. This includes understanding the latest features and strategies that drive digital account opening.

Standardizing excellence at your own pace is possible with a single, unified platform. This means powering consistent performance and experiences across all product and origination channels.

Banking operations are undergoing a significant transformation, driven by the adoption of data, AI, and managed services. This shift is enabling banks to provide more personalized and efficient experiences for their customers.

By leveraging these technologies, banks can scale their businesses and stay competitive in the market. Data and AI are being used to analyze customer behavior, identify patterns, and make data-driven decisions.

With managed services, banks can also reduce operational costs and improve their overall efficiency. This allows them to focus on providing better services to their customers, rather than getting bogged down in administrative tasks.

Home Equity Lending in an Instant allows homeowners to get expert guidance through automated workflows and verified data integrations. This empowers them to make informed decisions quickly.

A simplified onboarding process, like the one used for omnichannel deposit account origination, can drive faster application conversion and lead to deeper relationships with loyal customers. This is especially true in the context of home equity lending.

Automated workflows can significantly increase the deposit account application submission rate, with some seeing an average increase. This efficiency can be applied to home equity lending, streamlining the process and reducing the time it takes to get approved.

Transforming banking experiences is crucial for scaling your business. Data, AI, and managed services can help you achieve this.

With data, you can gain insights into customer behavior and preferences, allowing you to tailor your services and improve customer satisfaction.

By leveraging AI, you can automate routine tasks, reduce manual errors, and free up staff to focus on more complex and high-value tasks.

Managed services can help you manage your technology infrastructure, ensuring that it runs smoothly and efficiently.

Simplified onboarding processes can also be applied to collections, allowing for faster and more efficient interactions with customers in need of assistance.

Transforming collections experiences can lead to higher recovery rates, making it a vital aspect of banking operations.

By leveraging data and AI, banks can gain valuable insights into customer behavior and preferences, enabling them to tailor their collections approach to each individual.

This personalized approach can lead to increased customer satisfaction and loyalty, ultimately driving business growth.

Simplified onboarding drives faster application conversion, leading to deeper relationships with loyal customers, a principle that can be applied to collections as well.

A loan origination system is a crucial tool for banks, and nCino's Consumer Loan Origination System is a great example of how it can benefit customers.

Your customers receive personalized service with nCino's Consumer Loan Origination System, whether they're applying in a branch or online.

This system provides greater transparency into the loan process, making it easier for customers to understand what's happening with their application.

With a streamlined loan origination system, banks can reduce the time and effort required to process loans, making it a win-win for both the bank and the customer.

Banking operations can be transformed with the help of data, AI, and managed services. This can help scale your business.

With data, AI, and managed services, you can make more efficient decisions and reduce risk. This is especially important for institutions that need to meet regulatory and compliance requirements.

nCino's Portfolio Analytics solution can help identify, measure, and monitor loan, deposit, and application data. This can help your institution make data-driven decisions.

The BAI Consumer Benchmarking programs can provide your organization with key consumer banking analytics from more than 135 million consumer households. This is a significant amount of data.

Here are some of the key benefits of participating in the BAI Consumer Benchmarking programs:

The BAI Consumer Benchmarking programs offer a range of report options, including Deposit Product Level Analysis, Granular Market Level Analysis, Segment Level Analysis, and Channel Level Analysis.

Banks are starting to use generative AI to improve customer care, and it's about time. Generative AI can help banks provide more personalized experiences and resolve issues more efficiently.

To get started with generative AI, financial institutions need to know where to use it and what to have in place before they begin. This includes understanding the potential risks involved.

Banks can leverage cloud banking powered by nCino IQ (nIQ) to transform data into actionable insights and automate processes, leading to improved operational efficiency and unique customer experiences.

Enabling modern efficiency in banking technology is crucial for meeting evolving customer expectations.

The digital application has been a game-changer, allowing customers to interact with banks in a more seamless and efficient way.

Time to close has certainly decreased, thanks to the combination of digital tools and streamlined processes.

Quick turnaround times and dashboards have also played a significant role in shortening the time from application to closing.

nCino IQ Powered by Cloud leverages the power of artificial intelligence (AI) and machine learning (ML) to transform data into actionable insights.

This technology accelerates revenue growth and improves operational efficiency by automating tasks and processes.

By harnessing the power of AI and ML, banks can deliver unique customer experiences that set them apart from the competition.

Cloud banking allows for scalability and flexibility, enabling banks to quickly adapt to changing market conditions and customer needs.

To stay competitive in consumer banking, it's essential to know what's happening in the industry. The Consumer Banking landscape is changing rapidly due to client attitudes, reactions to regulations, and adoption of new technologies.

To get a true reflection of what's happening, you need real data. BAI's Consumer Banking Benchmarking provides this data, helping you answer critical questions like how your digital account origination compares to your peers.

With this data, you can validate results, find opportunities, and create strategies to stay ahead. For example, you can determine if you're getting your fair share of consumer deposits and loans, and where to best dedicate your consumer resources.

Making informed strategy decisions is crucial in consumer banking. You need to know what's going on in the industry and how you compete with your peers.

To stay competitive, it's essential to have real data that accurately reflects the industry. This is where BAI's Consumer Banking Benchmarking comes in – it helps you get the answers to the questions that matter most.

Here are some key questions to consider:

Validating results and finding opportunities will help you create effective strategies. By repeating this process, you can stay ahead of the competition and make informed decisions about where to allocate your resources.

Scaling services with indirect auto lending is a game-changer for financial institutions. It allows them to streamline processes, enhance the dealer experience, and mitigate risks. With nCino's retail banking software, you can achieve real-time connectivity to dealers through various application platforms, including DealerTrack, RouteOne, and AppOne.

A digital document feature is also available, designed to supply an easy, efficient, and paperless loan documentation process. This is a huge time-saver and reduces the risk of errors.

Support for touchless transactions up until funding is another key benefit. This means you can automate many tasks, freeing up staff to focus on higher-value activities.

The ability to pull real-time credit reports from the three major bureaus is also a valuable feature. This helps you make informed lending decisions and reduces the risk of bad debts.

Here are some key features of nCino's indirect lending solution:

The key to successful digital growth in banking is to minimize risk while maximizing opportunities. Consumer attitudes and reactions to regulations can be unpredictable, but with the right strategies, you can stay ahead of the curve.

BAI's Consumer Banking Benchmarking provides real data to help you understand the industry and compete with your peers. This data can help you identify areas where you're falling behind and make informed decisions to improve your digital growth.

Decreasing onboarding, account opening, and loan origination times is crucial for digital growth. With the right tools, you can automate manual tasks and reduce friction, creating a better experience for both clients and bankers.

Here are some key benefits of de-risking your digital growth strategy:

By implementing these strategies, you can de-risk your digital growth and create a more efficient, effective, and customer-centric banking experience.

Generative AI is transforming the banking industry, and Westpac's Andrew Macey, COO of HR services, sees huge opportunities for its adoption. Generative AI can help banks improve customer care.

Banks can use generative AI to provide personalized support to customers, making their interactions more efficient and effective. This can be done by analyzing customer data and behavior.

Westpac's Andrew Macey highlights the importance of having a clear understanding of where to use generative AI in banking before implementing it. This includes identifying areas where AI can add significant value.

Financial institutions need to be aware of the risks associated with generative AI, such as data privacy and security concerns. These risks must be carefully managed to ensure the successful adoption of AI in banking.

By leveraging generative AI, banks can improve customer care and provide a more seamless experience. This can lead to increased customer satisfaction and loyalty.

Community banking is about more than just providing financial services - it's about building relationships and supporting the local economy. Future-proofing your institution with a modern lending experience tailored for community financial institutions is key to success.

Community financial institutions can thrive by offering a complete consumer banking experience that meets the unique needs of their customers. This includes providing a modern lending experience that's tailored to the community's specific needs.

By doing so, community banks can help their customers achieve their financial goals and build a stronger local economy.

In the world of consumer banking, growth and efficiency go hand in hand. Decrease onboarding, account opening, and loan origination times by leveraging digital channels.

Your customer's experience matters, and digital channels can help you deliver. With the right tools, you can create transparency for both clients and bankers.

Digital growth strategies can help control risk and regulatory exposure. This is especially important in today's banking landscape.

Here are some key benefits of implementing a digital growth strategy in consumer banking:

Consumer banking is a vital part of our financial lives, and understanding what's available can help you make informed decisions.

Most retail banks offer a range of services, with checking and savings accounts being two of the most common.

These accounts allow you to manage your everyday finances, making it easy to pay bills and keep track of your spending.

Checking accounts typically come with a debit card, while savings accounts earn interest on your deposited funds.

Mortgages, personal loans, and credit cards are also widely available, helping you achieve long-term financial goals or cover unexpected expenses.

Certificates of deposit (CDs) offer a low-risk investment option with a fixed interest rate and maturity date.