How cutting-edge tech gives mid-tier banks the edge
As mid-tier banks continue to compete with the big four banks, customers expect more from lenders than ever before with innovative technology the key, says the head of cloud banking platform nCino.
Mark Bernhardi (pictured above), the managing director for Australia and New Zealand at nCino, said brokers and their customers now expected their lender experience to be digital first.
“Pre-populated data, simple pricing and loan qualifications are almost mandatory digital tools for brokers to survive as customers demand instant service,” he said.
“Having a technology stack that sees a central solution to make these tools work better together is a critical piece of infrastructure that mid-tier banks and lenders need to make the broker and customer experience a success.”
According to Bernhardi, mid-tier banks are harnessing technology such as nCino’s cloud-based solutions to enhance their digital agility and directly compete with larger institutions.
“These mid-tier banks face challenges from larger counterparts and new entrants, prompting them to streamline processes, boost efficiency, and innovate for better customer service,” Bernhardi said.
“By addressing pain points like duplicative data entry, outdated systems, and the lack of a digital ecosystem, mid-tier banks are positioning themselves to not only survive but thrive in a rapidly evolving market.”
Bernhardi said in the US, nCino had a history of partnering with mid-tier banks, providing them with the solutions to drive automation and digital transformation.
“nCino becomes the central hub to the bank’s digital ecosystem, allowing smaller banks to offer seamless online and mobile experiences, enhance customer satisfaction, and fortify risk management and compliance, all while gaining valuable insights through data analytics and reporting.”
Bernhardi said banking customers' needs are undergoing significant changes.
According to a PwC Australia's Customer Banking Survey 2021, a substantial majority of Australians – 69% – consider having the latest technology to be important when choosing a bank for financial products or services.
In addition, 72% believe it's crucial for companies to seamlessly integrate their digital and in-person experiences.
However, Bernhardi said the survey highlighted a discrepancy.
“Many digital banking products in Australia are perceived as lacking the ease of use and functionality that customers anticipate.
“These expectations are being influenced by interactions with organisations outside the banking industry, such as Amazon and Netflix, where customers experience engaging and seamless interactions.
“Specifically, 36% of Australian customers say their primary bank's mobile banking service can’t perform all necessary tasks.
“Moreover, 42% of millennials (aged 25 to 42) are inclined to explore new banking products and services in the coming year, indicating that banks cannot afford to take these customers for granted.”
He said in this changing landscape, only the mid-tier banking players with speed, agility, and a tech-forward approach, would succeed.
Bernhardi said technology was a game-changer for banks such as Bendigo and Adelaide Bank, which recently announced a partnership with nCino, allowing them to streamline their processes leading to faster decision-making.
“Moreover, the platform enables banks to enhance compliance efforts, helping to ensure that they meet regulatory requirements efficiently and effectively … the adoption of technology leads to improved efficiency, ultimately resulting in a `frictionless’ experience for both staff and customers.”
Bernhardi said technology platforms help mid-tier banks and other lenders work more effectively with mortgage brokers who can use digital platforms for applications, automated verification systems, and tools for tailoring mortgage products to customer needs.
“This tech-driven approach can help ensure that lenders can offer the most efficient and transparent processes for brokers and their customers, which now account for 70% of residential home lending volumes, up from 40% a decade ago.
“This shift is attributed to technology's ability to streamline processes, reduce paperwork, and enhance efficiency, which contributes to growth for a broker's business.
“It also allows brokers more time to build stronger relationships with clients, ultimately leading to greater retention and recommendations for more business.”
CPA Australia, the peak body for certified practising accounts, carried out an annual survey of the technology use of more than 800 businesses in Australia, New Zealand and Asia at the end of last year.
The report found respondents from high-growth businesses were much more likely to indicate their business had a digital transformation strategy and had used robotic process automation, CRM software, business intelligence software and AI in the past 12 months than respondents from businesses that had shrunk.
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