Lessons from Car Makers on How to Streamline Banking

Imagine building a car by putting a Honda engine, GM powertrain and a transmission from BMW onto a Ford chassis. You’d have created a Frankenmobile that probably doesn’t drive very well.

Sure, the vehicle is made with ‘best-of-breed’ parts, but they weren’t designed to work together. A car is greater than the sum of its parts. It’s all about the integration and how each component works together to create a great driving experience.?

While we understand this hodgepodge approach doesn’t work for cars, many credit unions and banks think the ‘mix-and-match’ strategy is perfectly fine for engagement banking. They implement one application for digital account opening, another for credit card onboarding and others yet for digital lending. Even within their lending offering, many financial institutions have different apps dedicated to each type of loan — a different solution for consumer loans, mortgages and commercial loans, for example.?

Just like the ‘best-of-breed’ car parts, these banking apps are very good on their own but don’t work well together as part of the overall banking solution. In fact, this stitched-together ‘FrankenBanking’ approach is driving up costs, creating operational inefficiencies and delivering poor member- and customer experiences.?

Unifying engagement banking — ideally onto a single platform — can overcome these challenges and deliver significant benefits, including:?

• Lower Costs: Consolidating the banking tech stack can reduce the number of software fees (and vendors), while lowering maintenance and overall IT costs with one unified platform. It also cuts staffing costs, particularly for training, development and retention.?

• Drive Operational Efficiencies: In addition to staff and IT savings, a unified platform streamlines operations, enabling faster and better service. It’s easier to manage one system vs multiple apps, each with its own user interface. From an IT perspective, the team can focus on optimizing the platform as opposed to a wide collection of unique applications.?

• Meet Member- and Customer Expectations: A consistent banking experience deepens satisfaction by building familiarity and trust. When borrowers have very different experiences in applying for an auto loan, a HELOC and an SMB loan, for example, they feel like they are banking with multiple organizations. It only takes one poor experience to lose them. A good experience, on the other hand, enhances loyalty and spurs more activity, from loans and credit cards to insurance and wealth management.?

Ultimately, it’s the driving experience that sells cars. In banking, it’s the member- and customer experience that grows deposits and activates revenue-generating activities, such as lending. A collection of ‘best-of-breed’ applications for each banking function might look good on paper, but in practice it creates a disjointed experience that hurts business.?

Consider a unified engagement banking platform that delivers a consistent user experience from account opening to applying for a credit card, a student loan and a mortgage, supporting members and customers across the entire banking lifecycle. You’ll cut costs, see efficiency gains, and most importantly, grow your institution by meeting member and customer expectations.