By Jen Dimenna, SVP Product at Apiture
Digital transformation is a buzzword across industries today. But when it comes to banking, what does the term actually mean? Transformation is defined as “a thorough or dramatic change,” and in terms of digital banking, it represents a push to digitize all user touchpoints. Consider the pandemic and how it brought user needs into focus. People were stuck at home and bank branches were closed, but life did not stop. Even in a pandemic, users were opening accounts, sending money to family, depositing checks, etc. If an institution’s digital platform lacks solutions for these services, users will look elsewhere to fill their needs. The pandemic made it obvious that financial institutions must innovate or be left behind.
As I recently discussed at Aquire or Be Aquired in Phoenix, community banks have a difficult decision. These institutions need to innovate but often don’t have the staff or budget to execute technology initiatives. They could rely on their core to provide solutions, but cores are limited to the solutions they provide. Thousands of fintechs exist to solve every digital banking need for users, but the challenge is how to identify which companies are the best fit.
One suggestion is to find a partner who can combine best-in-breed third-party solutions with an existing digital banking solution. Historically, digital banking providers have been a point of contact with consumers and businesses outside the branch, and as more services have become available outside the branch, the digital channel has become the hub of innovation and customer experience.
Digital banking providers can curate and integrate relevant third-party solution providers to offer end-to-end customer-facing solutions. And with API technology in the mix, digital banking providers can simplify integration, mitigate technology challenges, ensure that the user experience is consistent, and assist with regulatory compliance. The right API banking partner can deliver change quickly and help anticipate future needs in the digital banking space.
The digital transformation process also requires a deep dive into the reasons behind the drive to innovate. Is it about solving problems for consumers or small business customers? Does the institution have a goal to expand banking services outside of traditional channels?
Whatever is pushing an institution to innovate, one important point to remember is that transformation is not about solving technology needs. It’s about solving customer problems. The end goal is customer satisfaction, and by incorporating innovative technology, institutions can define their own path forward to growth and user retention.