Advances in digital and mobile technologies are driving fundamental changes in customer behavior and expectations. Retail banks and credit unions are facing more challenges than ever before when it comes to reaching new customers and finding ways to stay ahead of emerging competition rising from the likes of companies like Google and Apple in the realm of mobile payments. Global banking organizations must also deal with increasingly diversifying customers in regions embracing emerging technologies (like mobile apps) and other regions where customers going to a branch remains the main form of banking.

In order to stay competitive with this changing landscape, the time is now for banks and credit unions to take risks and test new methods of engaging with consumers and increasing their lines of business.

Here are three actions banking needs to take toward this goal:

Banking Must Enhance Their Mobile Apps to Engage Customers

With the arrival of Apple Pay, Google Wallet and other mobile payment options, banks will up the ante and invest heavily in building out more robust and user-friendly mobile applications. Users can already deposit checks, make transfers and pay bills using their mobile apps, but banking will begin to tinker with adding QR Code functionality to help consumers pay for goods in real-time from their phone.

Banks and credit unions must also explore “money-sharing” technologies to allow users of the same and different banks to share money seamlessly in real-time. This kind of functionality would compete with increasingly popular bank-agnostic apps like Venmo.

Banking should make mobile an experience, not just a service, as more consumers embrace the digital technologies around them. A collaborative report between The Economist Intelligence Unit and SAP found that 82% of retail bankers agree or agree strongly that in the next five years mobile will become the number one channel for millennials and younger consumers.

Existing tools and solutions are just the beginning of what’s to come as we advance through the digital and mobile tech revolution that is taking over the banking industry.

Banking Must Initiate New Programs to Reach Millennials

The millennial generation is growing up, yet they are still largely unaware and uneducated in how they can effectively manage their money with a bank. While mobile banking is a desirable feature for millennials (according to a recent Independent Community Bankers of America report, 70% of millennials say that mobile banking is an important feature of their financial experience) many consumers, millennials included, might not be sure exactly how to take advantage of these services.

Financial institutions must face this challenge of communicating head-on, using a combination of technology and consulting services to attract millennials and others as long-term, loyal customers. These programs are largely untested, so organizations should get creative and approach this with a trial-by-error mentality.

The manner in which new financial offerings are presented is also important, as nearly three quarters of millennials said they’d be more excited by financial innovations from Google or Amazon than from their own banks. Millennials report that mobile banking is an important feature that should be offered by retail banks.

In addition to millennials being largely uneducated in ways banks can help them, many also see little need for traditional banks at all. With large amounts of debt and slow acquiring wealth, millennials are hesitant to see the value that incumbent financial institutions can offer them.

As a result, banking must regain the trust of millennials and demonstrate the value they add. Incorporating technology into new offerings and using technology to fundamentally shift the banking experience will give organizations the leg-up they need to remain competitive and relevant as consumer expectations continue to evolve.

Banking Must Approach Big Data in a New Way

The banking industry has already improved leaps and bounds in their ability to leverage analytics to streamline processes and become more efficient. Now, the big task for financial institutions will be to use consumer analytics to understand what makes them tick and serve them better in a predictive way.

The Internet of Things will play a key role here as banks and credit unions connect ATM, mobile and location-specific data to better understand each individual customer and their needs. Consumer data such as usage trends, frequency of branch visits and service requests can also help organizations identify which customers will be most receptive to incentives in addition to consumers who might be unsatisfied.

As banking uses this data to better understand their customers and members, they must also channel this value back to the user and make their insights an ‘indispensable, relevant part of their customers’ everyday lives.’ According to a recent study by Accenture, this can be achieved by providing advice when and where a consumer wants it and developing special alliances that generate exclusive offers for individuals with additional service providers like insurance providers, healthcare practitioners, airlines or hotels.

Harnessing the true power of this data, banking can create more rewarding perks, programs and offers that meet real-time consumer demand regardless of how they choose to interact with the bank or credit union. This kind of analytical modelling provides unparalleled understanding and transparency into what’s needed to attract and retain the new generation of banking customers.

Conclusion

Banking has immense potential to capitalize on the vast amounts of data and are currently “sleeping giants” in regards to the ability to enter predictive trend recognition practices. If banks and credit unions can capitalize on new technologies and gain the trust of consumers of all ages, they will have a very bright and prosperous future ahead.