Can treasury management survive Digital Darwinism?

Google recently blew Silicon Valley’s collective mind when it debuted its digital assistant. Its voice is so human, filled with “ums” and hip expressions and human flaws, that it’s impossible to tell you’re talking to a machine. And just like that, Siri, the personal robot assistant that wowed us when it came on the scene a short time ago, became sort of nostalgic and outdated, like a Walkman or Liquid Paper.

Technology is advancing at lightning speed. Take a look at some of the popular technologies that didn’t even exist fifteen years ago. It’s hard to imagine what life was like without many of them:

• 5G
• Airbnb
• Alexa
• Android
• Bitcoin and Blockchain
• FaceTime
• Hulu and Netflix
• iPhone and iPad
• Instagram
• Lyft and Uber
• Nest
• Roku
• Snapchat
• Spotify
• Square
• TikTok
• Venmo
• WhatsApp

Every day, the giants that drive the technology listed above are innovating to deliver something newer, better, faster. Digital product lifecycles, be it our smartphones, TVs or social media, are becoming shorter. End-user adoption is getting faster, along with the pace of innovation. The R&D that has to fuel all of this is increasing.

It’s becoming increasingly difficult for everyone else — including the financial services industry — to keep up with this pace while still doing their day jobs.

Banks have ruled the financial landscape seemingly forever. But the emergence of Fintech and artificial intelligence (AI), among other innovations, have turned the financial industry on its head. Calling this a paradigm shift doesn’t begin to cover it.

This trend is so widely recognized across multiple industries, it’s spawned a new descriptive term: Digital Darwinism.

What is Digital Darwinism?

To quote from an article by Brian Solis, Principal Analyst at Altimeter Group, “Digital Darwinism is a fate that threatens most organizations in every industry. Because of this, businesses not only have to compete for today but also for the unforeseeable future. Digital Darwinism is the phenomenon where technology and society evolve faster than an organization can adapt.”

It’s not just about technology going into the stratosphere. It’s also a matter of customer expectations and behaviors creating demand for new business models and offerings, whether business (and banking) likes it or not. Only the fittest financial institutions will survive Digital Darwinism — and here are three ways they will do it.

Pay attention to the customer experience

Surviving Digital Darwinism will demand a use of technology to enhance and improve your customers’ experiences and, by extension, your relationships with them. It’s not just a matter of understanding that technology is evolving and changing; it’s about looking at how technologies are interacting with and impacting customers' behaviors and expectations in the world outside of the bank.

What’s the new normal out there in everyday life? What kinds of services are people expecting? How are people getting their news, entertainment or groceries?

Just one example is the instant, peer-to-peer money exchange. Fintech-facilitated apps like Venmo, Cash and Zelle are giving Google Cash, Apple Pay and PayPal a run for their money.

How are your customers sending money to their kids? If a bank’s mobile app isn’t up to par with a similar, simplified user experience, chances are the rising younger generation of company leaders will gravitate to an organization offering a similarly intuitive and easy-to-adopt platform instead of a more cumbersome or dated app.

Make adjustments to the enterprise

Take a critical look at your financial institution’s processes and procedures internally to see how they line up with life outside of your brick and mortar.

You may encounter the phrase, “Because that’s how we’ve always done it” — a classic predictor of resistance to change. This mindset is ingrained in many organizations, including traditional banks.

And then there’s the factor of cost. Upgrading systems that have been in place for years doesn’t come cheap, but there are strategies, such as outsourcing, that can help you streamline and improve without taking all of the bones out of existing systems. The benefit in the end: a forward-looking approach to investment and partnership that builds treasury management services and sale-ability.

Evaluate opportunities for future disruption

Take the treasury management onboarding process, for example. Onboarding treasury clients remains one of the most paper-intensive processes in any bank, making it costly, error-prone, hard to track and time-consuming for treasury sales and support teams. These pain points make it difficult to meet the high expectations that today’s corporations have of their banks. Antiquated, clunky processes filled with long wait times and lost documents can result in dissatisfied customers and an environment ripe for disruption — especially since the internet and the many devices used to access it have raised expectations to quick turnarounds and immediate feedback.

To counteract Digital Darwinism in this area, many financial institutions leverage Deluxe's paperless treasury management onboarding solution because the functionality mirrors their customer’s digital lifestyles. Electronic signatures can be captured on an iPad or other mobile devices instead of asking your client to sign a ream of paper. Deluxe also enables banks to offer self-service options to clients. Not only does this put the client in the driver’s seat, it expedites required information to your operations teams to reduce the overall implementation timeline.

Another opportunity includes providing solutions that easily integrate with existing accounting packages, particularly for smaller businesses that don’t have the resources for a wholesale upgrade or overhaul to their systems. Proving that you’re a committed partner that understands the challenges within a specific small-business could bring the benefit of a rich, profitable relationship — rather than the leftovers that a plug-and-play Fintech solution would leave in its wake.

It's survival of the fittest

The banks that adapt to change and delve into customers’ digital behaviors, expectations, wants and needs will be the ones staying ahead of their competitors.

Engaging customers the way they’re engaging with the rest of the world, with digital channels, devices and real-time service, isn’t just the next big thing. It’s making your services relevant to their lives, and responsive to their expectations.

As any third-grader will tell you: Dinosaurs ruled the world — until they didn’t. After a cataclysmic event, dinosaurs couldn’t adapt quickly enough to survive. The result: extinction. 

Financial institutions need to do better.