Banking on Digital Growth

If anything, the COVID-19 health and economic crisis has clearly demonstrated how critically important digital banking is after credit unions were forced to close or partially close their branches. Sure, there will always be a place for the branch, but while many employees are still working from home, credit union executives have been rethinking their branch positions. Some of them have already decided to permanently close a portion of their branches and invest more resources into digital banking to drive growth now and into the future.

Lay’s book focuses on how financial brands can leverage their digital banking channels to execute short-term and long-term digital marketing strategies. As the founder of the Digital Growth Institute in Houston, Lay holds 18 years of professional experience working on many digital marketing projects with more than 520 credit unions and banks.

He has found that many financial brands get stuck and stifled when pursuing digital marketing strategies because they only dabble in it or do it piecemeal, which always creates overwhelming frustration and confusion.

A reviewer of Lay’s book may have put it best when she posted these thoughts on Amazon: “As a professional in the field of financial marketing, and as one who prides herself on always looking to learn and grow in the ever-changing world of marketing – James Robert Lay’s book Banking on Digital Growth is exactly what this industry and all of its executives need – and need to read.”

Apparently, Lay’s book is getting noticed by credit union professionals who are looking for professional expertise on how to navigate through the complexities of digital marketing. On May 19, when his book was released, it rocketed to the No. 1 spot on Amazon’s Best Sellers List among sales and selling management books.

“If you really want exponential digital growth – which is what is needed for financial brands – you’re going to have to transform your entire way of thinking, your marketing and sales strategic models, and all the habits that go along with it,” Lay wrote.

The book defines digital growth as a systematic process centered on the modern consumer journey that unites marketing, sales, operations and IT teams around the following goals: Increasing website traffic, generating and nurturing leads, and converting those leads into loans and deposits.

It sounds simple enough, but as Lay pointed out, it takes time, commitment, resources and a lot of hard work that will lead to failures “as the cost of tuition” to achieve successes.

“I think it’s the dabbling that has really created the frustration for so many. They’ve only dabbled because they weren’t exactly sure what they needed to do in the first place,” Lay said in an interview with CU Times. “But it’s all interconnected, and I think the only path forward is to gain clarity into the opportunities, by defining a plan and committing to it and transforming the conversation about failure if you do fail, and you will on this path because that’s really what digital is.”

A CEO of a $2 billion credit union told Lay that the conversation about failure is fueling the cooperative’s digital marketing successes.

“The CEO said, ‘You know what’s really transforming our perspective was when we started looking at failure as the cost of tuition in this new type of environment, in this new type of world,’” Lay said. “Wow, I’ve never thought about failure being the cost of tuition. I’ve always looked at it as learning, but that really changed my perspective of just thinking about some of these conversations that credit unions are having.”

The first part of Lay’s book explains why and how credit unions need to establish a strong foundation for digital growth. Part two explains how to build a digital growth engine and part three offers insights into how financial brands can maximize digital growth potential.

Of course, Lay said readers don’t need to read the book in any particular order and can first read the chapters that may be of greatest interest or need. But he also said the most important chapter is the second chapter, headlined, “We will define a digital growth purpose.”

“I get a lot of, ‘Where do we start? What should we focus on?’” Lay said. “It’s really two things. Number one is defining a digital growth purpose. Without a purpose, we’re not going to get internal alignment. We’re not going to get buy-ins, and worse, we’re going to get and stay stuck in that circle of chaos. Purpose goes beyond the product and it goes beyond the process, but it really informs the, ‘Why are we doing what we’re doing?’ Once we have that, then everything else really begins to fall into place. Financial brands that skip that step may make progress on their digital growth journey, but when things get tough, when things get hard, they fall back to the traditional mission and vision that has driven them for the last 20, 30, 40, 50 years.”

Chapter three, titled, “We will empathize with consumer personas,” explains why it is critical for credit unions to create consumer personas of their ideal account holders based on market research and data, including what Lay defines as thick data, which provide insights into why people do what they do.

“There’s such a tremendous knowledge gap that runs from top to bottom within credit unions about how people shop and buy financial products,” he said. “A lot of people are still informed by the ways of the past, of the traditional broadcast marketing channels, print, TV, radio and direct mail, to drive traffic into a branch. My argument is the way people shop and buy financial products always starts in the digital channel and then they could end up in a branch, connect with the call center or do the whole process online.” What’s more, 70% to 80% of buying decisions for financial products are made long before a consumer walks into a branch or contacts a call center, according to Lay.

Building consumer personas is critical because they can help credit unions humanize the digital experience. Personas also create empathy, which establishes the emotional connection of trust and respect with members and prospective members about their financial challenges and goals – and consumers often buy products or services based on help and hope.

“Remember, it’s still not about you; it’s about them,” Lay wrote. “What are their needs and how can you help them?”

Consumers don’t want to hear financial brands brag about their commoditized rates, service and features because consumers hear that all the time.

“Rather, they want to feel you get them on every level of their lives,” Lay wrote. “Here lies one of the greatest opportunities for your financial brand.”

Although consumers want a smooth, quick and easy experience when they use a financial brand’s digital channels, it’s just as important for this positive digital experience to come with a positive human experience.

Lay said his research and research from Google found that human interaction – even if it’s just a two-minute interaction online via email, chat or even video – is still the most influential source in a consumer’s buying journey for a financial product.

“Human interaction doesn’t have to be face-to-face, but it must be all about the experience,” he wrote.

That’s why Lay said he expects mobile video banking to become a useful tool – people still want to talk to someone when they are looking for help or guidance in making financial decisions.

Because the pandemic either closed or partially closed branches, or because people don’t want to go into branches to limit their exposure to the coronavirus, financial institutions saw increases in mobile banking adoption among consumers who might have never considered it before, Lay said.

“If we can take advantage of this time when consumer behaviors are being shifted and transformed and really established, what better time than to do this now so that as we progress into the future, we’re going to be ahead,” Lay said.