concept of digital transformation

Optimize Your Digital Transformation Journey


Kelly Flynn |

‘Digitize to survive’ is a watchword we’ve been hearing ever since Covid closed workplaces and forced more consumers to do their shopping and banking business online. However, digital transformation is hardly a new idea. And while the pandemic has undoubtedly highlighted just how important it is to business growth, it’s still poorly understood and implemented.

How best to identify the products that will serve you and your market

For decades, financial institutions have been defined by their product and services. Whether free checking accounts or attractive loan rates, community banks and credit unions had their core offerings and could differentiate based on fees, niche products, and the “personal touch” of community-based financial services. After all, the competition was typically “the bank down the street.”

Today’s digital world has upended the definition of traditional products and services. Your offerings are no longer merely the account or loan. The digital platform(s) your account holders will use to access your products and services are now front-and-center. These are bolstered by features, speed, and personalization.

Gartner reports that Digital Transformation is an organizational priority for 87% of senior executives. Executives say that the top advantages of digital transformation are improved operational efficiencies (40%), faster time to market (36%), and increased ability to satisfy customer expectations (35%).

The 3 stages that all organizations face when replacing legacy technology and integrating new digital products

STAGE 1: Build digital technology to meet current consumer expectations

Consumer expectations continue to rise, and they demand a seamless, intuitive banking experience. From online banking to mobile, effortless, feature-rich products have become table stakes. And at a time when loyalty to a particular financial institution continues to decrease, anything less will give the average consumer a reason to jump ship for the latest neobank.

Today, mobile and online banking is where account holders spend the majority of their time. A study found that 99% of Gen Z and 98% of Millennials use mobile banking apps for everything from checking balances to reviewing their credit scores.

Yet many community-based financial institutions are often held back by their existing technology infrastructure, which may preclude digital products such as online account opening. Without digital support from the core vendor or other technology partners, your paths to achieving digital transformation are limited.

However, community banks and credit unions can no longer put off these technology imperatives. It’s a requirement to stay relevant and competitive in today’s environment which starts with the user experience. If you can’t draw in new and retain existing account holders, you won’t be able to grow — which will limit the other technological advancements needed.

STAGE 2: Improve automation and operational efficiency

Once you’ve built a foundation with your account holder digital experience, you can review ways to improve operational efficiency. These products may be less customer-facing, however, they end up benefitting your account holders. For example, automation will decrease the time to make a loan decision or reduce errors in data entry.

During this stage, each institution’s strategy will begin to vary widely, depending on their needs. Questions to ask in this stage are:

  • Where are the bottlenecks?
  • How can you reduce friction for account holders?
  • How will changes benefit your account holders and employees alike?
  • How does this fit into the organization’s overall strategic vision?

Prioritizing needs can be challenging, as there are nearly limitless opportunities. In the beginning, your steps in this stage may be little more than “improve speed in loan underwriting.” Once you begin addressing this need, you should form an internal committee that can speak to the specific requirements a digital vendor can bring to the table and then look at the value-add from any products you consider.

STAGE 3: Incorporate advanced analytics, artificial intelligence (AI), and personalization

The final stage should elevate your digital experience, relying on robust data-driven capabilities. You’re relying on products you’ve implemented in the prior stages and turning them into a competitive advantage by providing more targeted and personalized interactions.

Analytics and reporting show you how your account holders are using your mobile app or other digital products. This data should be informing all of the decisions you make about adding new products or services. Today’s consumers expect increasingly personalized experiences, including offers that meet their specific needs. Geo-fencing lets your financial institution provide location-specific offers. Data, combined with AI, can help you target the right message at the right time, whether it’s in-app, through a marketing campaign, or in a chatbot.

This last stage may not be part of every organization’s digital transformation strategy. Even if you can’t envision your financial institution relying on data today, you should consider that it will become necessary in the future in order to compete. Large banks and neobanks are already relying on this type of technology so they can deliver more faster.

Get expert help when choosing the technology for your digital transformation

Twenty years ago, most couldn’t imagine the digital world we live in now. That’s why you should plan for the future – and the future includes data and analytics. Throughout the stages of your digital transformation, you should keep this in mind — even if your institution isn’t ready for that type of product today. You want to lay the groundwork for your future account holders and employees.

Request a free Contract Optimizer Analysis to see how we can improve the financial outlook at your community bank or credit union.

Watch our video, JMFA Contract Optimizer: How We Get Results or read our whitepaper, “Three Reasons to Give Your Contracts a Closer Look.”


Sign Up Here