Implementing digital transformation has become a major focus for banks in recent years, a critical task topping the to-do lists of every executive charged with optimizing customer retention and cross-selling, improving customer experience and engagement and even protecting customers and the institution from evolving fraud risks.
The reason for all the focus is that implementing digital transformation is a goal that’s no longer considered aspirational, it’s reached the point of being a necessity. The youngest of the Millennial generation are now entering the workforce and Gen Z is right behind them. This presents banks with the ideal opportunity to woo a virtual army of new customers … but with just one catch. These are people who have grown up immersed in the superior digital experiences of organizations like Amazon, Netflix and Apple. That’s a serious bar of expectation for banks to meet, especially when you consider the impact digital experiences have on customer satisfaction and engagement.
Underscoring this point is Deloitte’s “Accelerating Digital Transformation in Banking” report, in which respondents were asked to compare their bank to their favorite brand in a variety of different categories. In every case, the favorite brand won by at least 12%, making it clear that banks have their work cut out for them if they expect to win younger customers and hold on to their existing base.
Ultimately, banks must commit to technology-driven service and also leverage new technologies to streamline and improve back-end processes. By embracing technology and implementing digital transformation, banks will be able to, among other things…
- More profitably acquire and serve customers
- Optimize customer retention and cross-selling offers
- Deepen customer relationships and engagement
- Unravel complicated tech stacks to spur future growth
Thankfully, to take advantage of these benefits late-adopter institutions can jumpstart their progress by following the experiences and best practices discovered by their early-adopting counterparts.
Out of all the approaches that have been tested in the digital transformation journey, three stand out as the most likely to succeed:
- Expanding on existing core systems
- Building customized, proprietary systems
- Buying applications from specialist third-party providers
To find out which journey is right for you, check out the whitepaper “Expand, Build or Partner? Choosing the Right Path for Digital Transformation.”