The digital transformation opportunities for building societies

The financial services industry is undergoing a rapid digital transformation with global investment estimated at $2.3 trillion¹, and building societies must adapt and embrace the change to remain competitive.

The opportunities that digital transformation presents for building societies are numerous, and they include improving customer experience, enhancing operational efficiency, expanding reach and improving access, and embracing innovation and agility.

We explore these opportunities and discuss how building societies can use digital transformation to their advantage, while overcoming the challenges that building societies may face when implementing digital transformation initiatives.

Improving customer experience

Customer experience is key for building societies when it comes to growth – positive experience results in higher member engagement and retention.

By expanding into digital channels, building societies can offer their customers greater convenience and flexibility in accessing their services, as well as improving the speed and ease of transactions.

Convenience and access

A key example of this is implementing digital and mobile banking services. This allows members to manage their accounts at their own convenience, and can check their balances, transfer funds, and pay bills from their smartphones, anywhere and anytime.

The increased accessibility and control has a significant impact on member satisfaction and loyalty, as it allows an immediate banking experience.

One key benefit of this is that potential and existing members can browse products and sign up for an account at their own convenience. The restrictions of opening an account at a physical branch means many people who work or cannot easily travel to the location do not consider it to be a viable option.

By offering an online account opening process, building societies can enable customers to open a new account any place, any time.

Members can then manage their account when it suits them. Some building societies still utilise a physical passbook for accounts, which is very time consuming as every transaction needs to be manually added, and physical records can be easily lost or damaged.

This reduces the burden on branch staff too, allowing them to focus resource on more complex tasks and provide a better overall customer experience.

Value add

Digital transformation allows building societies to offer value-added services that enhance the customer experience.

For example, building societies can use digital channels to offer loyalty programs, personalised financial advice, and other innovative features that add value for their customers.

Overall, by introducing digital services to improve customer experience, building societies can increase customer satisfaction, retention, and loyalty.

In today’s highly competitive financial services industry, offering a seamless and convenient customer experience is essential for building societies to remain relevant and successful.

Enhancing operational efficiency

By automating manual processes and leveraging data analytics, building societies can reduce costs, increase productivity, and improve risk management.

Automation

By automating routine processes, such as account opening and loan processing, building societies can reduce the burden on branch staff and reduce the time and cost of processing transactions.

Embedding financial services from a technology partner such as Optimus Cards into an existing ecosystem can free up staff resource to deliver member services that require human intuition, such as personalised financial advice.

Data analytics

By leveraging data analytics tools, building societies can gain insights into customer behaviour, market trends, and other key factors that can inform strategic decision-making.

This enables building societies to make data-driven decisions that improve efficiency and effectiveness across the organisation.

Data also provides risk analysis, with advanced fraud detection tools available to identify potential risk proactively to mitigate losses.

Enhancing operational efficiency through digital transformation allows building societies to reduce costs, increase productivity, and better manage risk.

This can enable them to offer more competitive products and services, increase profitability, and stay ahead of the curve.

Embracing innovation and agility

By partnering with fintech startups, adopting agile methodologies, and experimenting with new technologies, building societies can stay ahead of the curve in the rapidly evolving market.

Partnerships

One way this can be achieved is through partnerships with fintechs. Fintech companies like Optimus Cards are often at the forefront of innovation, developing new services, technologies and business models that can help building societies stay competitive. These collaborations allow, building societies to leverage their expertise and access cutting-edge technology that can enhance their products and services.

Agile Methodologies

Adopting agile methodologies is another way that building societies can embrace innovation and agility. These allow organisations to quickly adapt to change, be highly reactive to customer needs, and more responsive to market trends and customer feedback.

This will allow building societies to attract newer audiences across all age groups, bringing in younger audiences for lifetime memberships.

Exploring new ways of working

Building societies can experiment with new technologies, such as blockchain, artificial intelligence, and the Internet of Things (IoT), to introduce new business models and improve customer experience.

By exploring new technologies and experimenting with new ideas, building societies can stay at the forefront of innovation and adapt quickly to changing market conditions.

Potential challenges of digital transformation

While the benefits of digital transformation for building societies are clear, there are also challenges that must be addressed to successfully implement new initiatives. Some of the common challenges building societies face are:

• Legacy Systems: Building societies often have legacy systems in place that are outdated and difficult to integrate with modern digital solutions. This can make it challenging to adopt new technologies and create a seamless customer experience.
• Data Security: As building societies adopt digital channels, they must also prioritise robust data security and comply with strict regulatory requirements to protect customer data from cyber threats.
• Staff Training: Building societies must invest in staff training to ensure employees have the skills and knowledge necessary to effectively use new digital tools and processes.

To overcome these challenges, building societies can:

• Offer staff training and support to help employees adapt to new digital tools and processes.
• Prioritise data security by implementing robust security measures and regularly reviewing and updating policies and procedures.
• Partner with an experienced financial service partner, who can seamlessly integrate digital transformation into systems, ensure compliance and security.

Overcoming these challenges requires a strategic and collaborative approach. Building societies must work closely with technology partners, regulatory bodies, and employees to ensure a smooth and successful transition to digital transformation.

In conclusion, digital transformation presents a wealth of opportunities for building societies to improve operations and better serve members. By embracing the latest digital channels and tools, building societies can improve customer experience, enhance operational efficiency, expand their reach and access, and innovate with agility.

At Optimus Cards, we specialise in providing white label card and banking services for building societies, helping them to take full advantage of digital transformation opportunities.

Our customised solutions are designed to meet the unique needs of building societies, while also providing a seamless and secure user experience for their customers.

With Optimus Cards as your partner, you can be confident that you are well-positioned to take advantage of the latest digital transformation opportunities and provide a superior customer experience for your members.

To learn more about how Optimus Cards can help your building society succeed in the digital age, get in touch today.

1. https://financesonline.com/digital-transformation-statistics/