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  • Writer's pictureJess Fongemie

Designing Digital Differentiation

“Blockchain technology is going to rewire all financial services.” [1]

“The blockchain is the financial challenge of our time. It is going to change the way that our financial world operates.”[2]

Innovative, differentiated financial institutions need to be designing strategies that prepare for disruptions to traditional financial services like SWIFT/ACH/NACHA and electronic dollar exclusive paradigms, while paying special attention to the rapid and stealthily advancing crypto and DeFi current events.

Since March 2020 the market has seen a 15x increase in capital invested in Stablecoins, and in the last few months alone there has been an influx of significant announcements released including big names like BlackRock partnering with Coinbase and Wallstreet titans starting their own cryptocurrency exchange. But what does this mean for our community banks and credit unions? Further consolidation and centralization of capital away from your local financial institution.

“As a local, trusted institution you have a distinct advantage in this digital era”

Who are you partnering with to develop and drive your strategy, protect your ‘flank’ of deposit outflows to digital networks and currencies, and build digital operations to keep your FI plugged into the future of money?

The data is right in front of you as your members continue to trade in their traditional dollars to participate in the future of money. Understandably, this “change” can be seen as a disruptive field of landmines. But it doesn’t have to be. In fact, properly planned and managed digital change will result in sustainable progress, innovation, growth… and we cannot allow these opportunities to pass at this transformative moment in our in history. In this digital world, the Formula for Relevance is at once straight-forward and stubbornly difficult; fusing modern strategies with optimized operations built to extend frictionless digital interactions to your community.

“Meaningful relevance in the digital world is the domain of those who own their data and rebuild operations for deep relationships and durable connection to community.”

We certainly don’t expect you to have all of the tools and resources to solve this equation on your own. That's what our CUSO and partnership is here for, to support this level of priority change management alongside you.

If you’ve made it this far, we’ve pushed past the first phase of change, denial. Now, we can move forward to contemplation. Here you’re presented with the cold hard facts…money is starting to stream the way that movies, travel, music, and transportation all fused with the internet to become streaming realities. Now, the primary way consumers derive value from their financial institutions is a matter of digital engagement, value creation and exchange. Your members are being targeted by financial services that don’t require minimum balances, high balance loans, long term membership, or ‘wallet share’ in exchange for loyalty or reward. They are moving their deposits from your local FI to digital wallets or apps that support pay day advance and buy-now pay later, relationship-based rewards, and digital currency. The question is, are you strategically and operationally committed to maintain member engagement in this digital reality, creating sustainable, revenue generating relevance, or are you still focused on old world ways to ‘make up for the rapidly decreasing fee income’?

By now you’ve weighed the pros, cons, and you’ve assessed the risks. But as we mentioned above, properly planned and managed, change isn’t only disruptive, it’s an opportunity for those willing to efficiently and effectively manage change. As a local, trusted institution you have a distinct advantage in this digital era; no one knows your members and communities better than you do. It’s time to make the commitment and use this opportunity to benefit your members and your institution. How? Start by defining and mapping a multi-year strategy that prioritizes owning your data and using that core data for sustainable, relevant, responsible, revenue generating connection to community. Here’s how we have you covered…

Our Strategy Mapping process is designed to lead your team to do exactly that, prioritizing your data and aligning your strategic plan, financial picture, operational priorities, and technology roadmap to all work together as the charter of your future strategy and business plan. This essential step will take your institution from contemplating concepts to actionable priorities and realities as we solve the Formula for Relevance.

The experience you extend to your members can only be as deep and efficient as the intelligent strategy you define and the digital operation precisely built to support it. So, with your modern strategy and operational priorities mapped out, it’s time to take action! Relevance in the modern world means designing tools that engage digitally without outsourcing data. That final caveat is critical. After all, data defines the texture, quality, and character of the relationships you nurture. Data is the language of digital love! Digital relevance cannot be served by standing up shiny new apps and platforms that segregate data, leaving you a third-party to the relationship. Meaningful relevance in the digital world is the domain of those who own their data and rebuild operations for deep relationships and durable connection to community. That’s why our digital operations experts are here to lead your team in constructing a bridge that crosses from legacy core processing to modern digital consumer interactions.

DaLand has formulated the Relevance Equation to help community FIs move past legacy banking ideals, prioritizing modern strategies and digital, data-driven operations for targeted connections to consumers. Together, we can work through these phases of change, taking on the vital mission of planning and preparing for the future of local, democratic, financial literacy and flourishing beyond the familiar and comfortable boundaries of our legacy banking industry. Our CUSO is here to come alongside you during these historic opportunities to optimize banking operations, increase consumer engagement, and explore new ways to promote and protect financial wealth and health of your community.

We exist to partner with institutions looking to remain relevant and achieve digital differentiation through control of data and development of financial institution operations for connection to community.

[1] Tom Farley [2] Blythe Masters

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