The sphere of lending, like any other, is changing under the influence of digitalization. In such a situation, small financial institutions are forced to find themselves at a disadvantage compared to the giants, which have huge budgets for developing, testing, and implementing innovative technologies. Is it possible that small banks and credit unions are doomed to close? Experts from the US finance company YesLoanz believe that such banks have their advantages that will help them survive. The main one is a one-stop shop service.
Fintech companies have a variety of technological advantages, but they do not receive much public support. Many clients, especially those from small towns, prefer to work with local organizations due to long-term relationships and understanding of their needs. Regional banks may provide more personalized services by using these advantages. It’s not just about the range of services, but also how they are delivered. Customers prefer to get all their services in one place; that’s why “a one-stop shop” format gains popularity.
A personalized offer
What are the advantages of a one-stop shop service compared to other formats? One of the main advantages is, no doubt, time savings. The customer doesn’t need to visit several institutions located in different parts of the city to receive various services.
Another benefit is communication and networking. The customer gets to know his personal manager and can solve all issues thanks to him or her. This is a pleasant and convenient experience for the customer, as he trusts the company because of the certain personality of the specialist, with whom he establishes a personal connection. Thanks to this connection, long-term relationships can be built. If a person knows and trusts a company, he is less likely to switch to another company just to save a few dollars. In addition, this is beneficial for the company as well, as through the work of a single specialist, a bank may learn about the needs and issues of each client.
Based on this information, a customized offer can be created, making it easier to identify unclaimed services. Perhaps a client could ask for the creation of a new service. Such feedback would help to expand the company’s range of services and, as a result, generate extra profits.
Additional benefits
There are other, less obvious benefits of a “one-stop shop” – the disposal of intermediaries. As an example can be mentioned the situation that arose at the end of the COVID-19 pandemic in the mortgage market. People, freed from isolation, felt the necessity to buy homes, but the mortgage market was unstable. In that situation, brokers appeared who helped borrowers to find the best mortgage options and guided them through the complicated application process.
On the one hand, banks benefited from cooperation with brokers because they brought them new customers. On the other hand, they became dependent on the brokers’ solutions and lost profits from their own services. As a result, banks began taking steps to maintain direct relationships with customers. The main reason why it became possible is thanks to the introduction of “one-stop shop” services, which coordinated work on mortgages, insurance, utilities, and maintenance.
Key ingredients
There is a concern that having too many services under one roof may lead to a decrease in quality. “An expert in everything is an expert in none”, as people say. There is some truth in this claim. Being “universal in everything” will no longer work. However, it is quite possible to provide a wide range of services within one major area. It is important to note that this does not necessarily apply to the financial sector, where specialization has already been established. For instance, a company that specializes in loans may choose to offer a “one-stop-shop” service for this specific area.
Trust and long-term customer relationships, personalized offers, and providing all possible offers in one place are important components of a one-stop-shop. However, that’s not all. It is necessary to package digital technologies and delivery of all these services directly to customers. “The most successful financial institutions are those that can combine seemingly unrelated elements and create a seamless service. Trust, convenience, ease of use, personalization, and direct communication with customers, along with modern technologies, are the key ingredients for a successful “one-stop-shop” service,” summarized the experts from YesLoanz.