Connect with us

Hi, what are you looking for?

Online Business Success

How Digital Transformation Could Help Black-Owned Banks


By Daniel Griggs, founder of ATX The Brand, a tech agency focused on solving problems, building businesses and strengthening communities.

Between 2018 and 2021, half of all Black-owned financial institutions in the United States closed permanently, and as of 2021, there were only 42 Black-owned banks or credit unions in the country. Industry experts predict that number will continue to decline if big changes are not made.

The decline of Black banks in the U.S. is problematic on several levels, not the least of which being its widening of racial wealth and economic opportunity gaps. About 70% of Black Americans don’t have a bank branch in their neighborhoods, which means they are often paying more for financial services like check cashing. The lifespan of a dollar in Black communities is six hours, as opposed to weeks in other communities, as shared by The Famuan. In addition, CNBC also reported that Black and brown business owners were disproportionately affected by Covid-19 setbacks, with a 41% decline in Black-owned businesses compared to a 17% decline for white entrepreneurs. 

I’ve worked with financial institutions for the past five years, and for the past couple of years, my company has had a detailed focus on Black-owned businesses. We’ve found that while there are many factors contributing to the dwindling number of Black-owned banks in the U.S. — including the fact that they received fewer federal bailouts than major financial institutions did in the Great Recession — there is one clear solution that could help many minority-owned banks get back on their feet. The answer is growing membership through digital transformation. 

Digital transformation has become a popular business buzzword in recent years, but the concept behind it holds the key to helping small, minority-owned businesses — including banks — stay competitive in a digital economy. 

Advertisement. Scroll to continue reading.

More and more consumers prefer to do their banking online and are opting for financial institutions with digital services — such as online applications, video meetings, virtual account management and convenient apps that put banking services at their fingertips. Increasing membership is what will prevent Black-owned banks from becoming extinct, and digital transformation is the key.

In order to keep up with these new customer standards and expectations, Black-owned banks need to be implementing the following strategies.

• Website Upgrades: First impressions matter. The average user will leave a bank website after 10 to 20 seconds if they can’t find the information they’re seeking. To capture the attention of potential customers, a bank’s website needs to be useful, engaging and aesthetically pleasing and connect to the user’s tech-savvy lifestyle.

• Responsive Design: Modern websites need to be created with modern users in mind, and that means responsive, intuitive design. About 43% of millennials have at some point abandoned mobile banking activity due to a poor user experience. Top reasons millennials may discontinue using a mobile banking app include lengthy processing time and complicated forms.

• Social Media: Social media accounts aren’t just a way to promote a brand, they are channels for direct communication with clients and potential clients as well as a tool for building trust. The average consumer spends almost six hours each week engaging with social media, and the majority of younger consumers (under age 25) view social media as the most effective advertising medium. By directly engaging with followers, answering questions, commenting on posts and asking for feedback, Black banks can build trust and credibility.

• Video Capabilities: In 2021, more consumers attended virtual events and communicated through video conferencing software than ever before. In the absence of in-person interaction, video is the next best medium for communicating the emotional and practical appeal of a product or service. A Black-owned bank or credit union’s video capabilities should be technically on-par with large financial institutions in order to stay competitive. Ideally, these video capabilities should be integrated within a mobile app for ease of access and use. 

• A Banking App: A 2021 survey from the American Bankers Association found that banking customers prefer mobile apps more than any other channel to manage their financial accounts. While this was true before the Covid-19 pandemic, consumer preference for mobile banking apps has risen 11% since the world went into lockdown, according to the survey. 

Black-owned banks and credit unions have served an important purpose in serving Americans who have been historically marginalized and left out of the mainstream banking system, according to Independent Banker. These institutions not only provide a crucial resource for individuals and businesses but also help address the racial wealth gap and ensure equitable access to the banking system. 

There is a clear need for Black-owned banks in the United States, yet these institutions are under threat and need to embrace new digital tools and technologies to stay afloat. We still have a long way to go when it comes to providing equal access to the financial system and ensuring that all Americans have the opportunities they need and deserve — and increasing the digital capabilities of Black-owned banks is the start.

Advertisement. Scroll to continue reading.

.



Source link

Click to comment

Leave a Reply

Latest

Top Stories

Ethereum’s native token, Ether (ETH), gained alongside riskier assets as investors assessed weak U.S. economic data and its potential to cool down rate hike...

Technology

We are excited to bring Transform 2022 back in-person July 19 and virtually July 20 – 28. Join AI and data leaders for insightful...

Top Stories

United States Securities and Exchange Commission (SEC) chair Gary Gensler is in talks with Commodity Futures Trading Commission (CFTC) officials on a “memorandum of...

Online Business Success

Business professionals in a meeting presentation discussing company growth getty You’ve got a product the team’s excited about. The group wants to start getting...

Social Media

Are you looking for ways to improve your social media content? Want to add video to your strategy but not sure where to start?...

Top Stories

Sky Mavis, the creator of the play-to-earn game Axie Infinity (AXS), announced that it will reimburse victims of the Ronin bridge hack and reopen...

Advertisement

You May Also Like

Uncategorized

Introductions get a lot of attention. I’ve explored the topic of how to write them even though as a reader, I always skip them....

Online Business Success

The internet is now our nervous system. We are constantly streaming and buying and watching and liking, our brains locked into the global information...

SEO Guide

There are all kinds of pictures of the world on the internet, but to find one of these specific pictures that you want to...

Online Business Success

You can think of link building in many ways. I like to call it tedious, painful, and a test of patience. It’s also necessary...

Advertisement