On this episode of Expert Insights, industry trailblazer James Robert Lay sits down with our host Joe Welu for an exciting conversation on the barriers to innovation in finance. James Robert is the founder and CEO of the Digital Growth Institute. He has guided more than 560 financial brands on a mission to simplify digital marketing and sales strategies that empower banks and credit unions to generate 10 times more loans and deposits.
In this week’s show, we tackle innovation in financial services and why the topic is more relevant than ever. Let’s break down some of James Robert’s insights.
What’s Preventing Financial Institutions from Innovating?
James Robert identifies three negative patterns he continues to see financial institutions fall into and hold them back from truly innovating:
- There’s no clear focus. Innovative decisions are being made blind, and key decision-makers aren’t using data to inform their strategies and help them make confident decisions. As a result, they end up “dabbling” in innovation here and there, but it doesn’t result in long-term change.
- There’s no cultural support or buy-in. The fear of failure is very real for financial services leaders. Big change – that may require time, money, and resource commitments – can be uncomfortable. But this fear of change can leave organizations in the “cave of complacency” – which, according to James Robert, is a very dangerous place. Instead, James Robert encourages leaders to lean into change and get used to feeling comfortable with being uncomfortable.
- There’s a perception that there isn’t enough time. When a financial institution is unable to actually commit to innovation, they typically end up doing what they’ve already been doing time after time. In the end, no growth is achieved.
So is it innovate or die for most financial brands? From James Robert’s perspective, it’s more of a slow death. If you’re not innovating, you’re not transforming. And if you’re not transforming, you’re not growing. If your business isn’t growing, it might be time to reevaluate what you’re doing.
Innovation is Rooted in Data
For many financial organizations, the lack of innovation stems from their inability to act on data. They’re unable to take all of the information about a customer, understand that person, and then change how they serve that customer. It’s a multiple-step process – turning data into analytics so that it can become actionable insights – but it’s imperative to innovation.
Financial brands are in a unique position when it comes to data because they have a tremendous amount of valuable information at their fingertips. It truly is a transformative opportunity because banking institutions know much about the lives, habits, and behaviors of their individual account holders. When data is handled correctly, it can be leveraged to make recommendations and to help customers get from where they’re at to an even better, brighter financial future.
Data can feel overwhelming. But with the right tools and a dedicated focus, it will create the greatest value going forward.
Macro vs. Micro
According to James Robert, financial institutions must begin to move from the macro to the micro. The one-to-one connection (micro) people crave is going to take priority over the macro. People today are longing for personal connection and many organizations are realizing the potential of a human-first strategy.
Embedding touchpoints – real and meaningful, human connections – along the customer journey can make a tremendous difference in the relationship that financial brands have with people. It can be as simple as making a phone call, sending a text, or giving advice. James Robert’s advice? Look at the individual customer and prioritize the transformation of that person over the commoditized transaction.
Where Can Financial Institutions Begin?
When it comes to tackling innovation, start small and don’t try to boil the ocean – progress is greater than perfection, James Robert recommends.
One potential starting point is to identify a process that can be easily automated. Consider this scenario: With every person that abandons an application, send them an automated email. Now add the human element into this by also adding outbound calls. These small, additional touch points added strategically throughout the customer journey can lead to significant value over time.
After incorporating a new process, James Robert reiterates the importance of asking questions to review the progress. What have you done? What worked well? What could be even better? From there, tweak the process to make it more effective, then rinse, and repeat.
For more of James Robert’s insights, listen to the full Expert Insights episode.
