As the shift from traditional banking to digital banking accelerates in the wake of the COVID-19 pandemic, banks are at risk of losing their current customers, not attracting the next generation, and ultimately becoming irrelevant.
Based on primary and secondary research included in this guide, we’ve found that these risks are often being driven by several challenges including:
- A legacy mindset. Fixating on costly branches and in-person interactions at the expense of digital innovation increases your overhead and weighs you down.
- A broken approach to build vs. buy. Building an ideal digital experience completely in-house is expensive, cumbersome, and slow.
- Not knowing your customers. Not having a 360-degree view of your customers means you don’t really know them.
- Data paralysis. Neglecting your internal data puts you at a long-term disadvantage.
- Poor digital banking. Being stuck behind the curve on digital banking features cripples your ability to retain customers and win new ones.
In this guide, we’ll outline you how you can overcome these five challenges, differentiate yourself in the market, lower your operating costs, and become the primary financial institution for your customers.
Let’s get started.
Digital Challengers and the State of Banking in the Wake of a Pandemic
Unlike anything before it, the COVID-19 pandemic has accelerated the shift to digital banking. For instance, in a global banking consumer study, Accenture Research found that half of consumers now use mobile banking at least weekly, compared to one-third who said the same just two years ago. Accenture also found that there has been a 30% to 40% decline in U.S. in-branch transactions over the same period.
And Deloitte writes, “It is now abundantly clear that COVID-19 has acted as a catalyst for digitization. In addition to accelerating digital adoption, the crisis has also served as a litmus test for banks’ digital infrastructure. While institutions that made strategic investments in technology came out stronger, laggards may still be able to leapfrog competitors if they take swift action to accelerate tech modernization.”
Forrester Research has come to the same conclusion, writing, “The COVID-19 pandemic has inarguably fast-tracked the digital shift. From entertainment to shopping, consumers all over the world have tried many digital services and products for the first time. Many consumers have also accessed their financial accounts online via their smartphone, opened a new financial product online, or made digital payments for the first time. As the majority of consumers migrate to digital-first experiences, the “early adopter” or “tech-savvy” profile will apply to the mainstream market.”
These trends match with what we’ve found in our original consumer research. For instance, 87% of the 1,000 random U.S. consumers we surveyed for this guide say they’re now visiting their bank branch less often than they did before the pandemic. And 89% say they’re using mobile banking more often.
In addition, 87% say they have an account with a digital-only banking service, with 81% saying they’re more likely to use such services in the future.
All of this data correlates with a trend that Ron Shevlin, Managing Director of Fintech Research at Cornerstone Advisors, has discovered. He writes, “In January 2020, just 4% of Gen Zers and Millennials considered a checking account from a challenger bank their primary account. By December 2020, that percentage had grown to 15%.”
That growth rate — nearly 3x in under a year — was likely propelled in part by the COVID-19 pandemic and the decreased desire many people feel about venturing to a bank branch. For instance, our primary consumer research in the Ultimate Guide to the New World of Banking shows that 36% of people say they don’t plan to go into the branch as often as they did before the pandemic, even after all restrictions have been lifted.
These branch-wary sentiments almost certainly represent a sustained shift toward increased digital banking use and not just a passing trend. As Parker Conrad, co-founder and chief executive officer at the IT platform Rippling, asks, “Who wants to go back to filling out insurance paperwork with a pen and trying to find a fax machine? No one.” Likewise, as more people realize how many of their typical banking processes they can do via a digital device, the desire to return to physical methods (such as signing a bunch of paperwork) will diminish. It’s no wonder that the global research team at CACI estimates that by 2022, 88% of all interactions at banks will be mobile.
What’s perhaps even more worrisome for traditional banks is that Cornerstone Advisors also found that two-thirds of customers at Chime, the most popular digital fintech challenger, name it as their primary bank.
This places Chime high on the list — just barely behind Citi — of institutions with the most people in the U.S. who call it their primary bank.
If Chime were just another traditional player on this list, that would be one thing. But given that they’re a company that saw a 3x increase in young customers in under a year, it doesn’t bode well for traditional financial institutions — particularly those institutions that don’t have a solid digital strategy to win over future generations.
In fact, Accenture’s study found that 17-18% of young people say they already use a neobank for most of their transactions.
To win these future generations, financial institutions must partner with leading fintech providers that can give their customers (especially their young customers) a digital experience that competes with upcoming challengers. Without help on the digital front, it’s bound to only become more difficult to retain the edge that traditional players have held in this space. Fortunately, there are many fintech companies, including MX, that partner to help traditional banks offer a customized mobile banking experience that wows customers.
But it’s not just basic account services people are looking for. It’s also a better lending experience. This is partly why the share of personal loans that have gone to fintech companies has been climbing from 2013 to 2018 (the latest data currently available).
What’s more, the average personal loan size at a fintech is nearly as large as those offered by banks, with TransUnion pinning the average amount from a fintech at $10,338 and the average amount from a bank at $13,514.
It’s no wonder that bank executives are focused on a key set of priorities right now, leading with improving the digital experience.
What often gets overlooked is the fact that a foundation has to be laid before a bank can truly improve the digital experience for their customers.
Here are the steps you can take to get there.
- Adopt a digital-first mindset
- Get beyond build vs. buy
- Know your customers with a 360-degree view
- Build a data flywheel
- Optimize and personalize the digital banking experience
It all starts with changing your mindset and culture.
Adopt a Digital-first Mindset
For centuries, people were stuck with whatever bank had good enough service at a location close enough to them. They wanted banking nearby.
But a phone in the pocket is even nearer than a branch down the street. And that changes everything. As Chris Skinner, author of Digital Bank, puts it, “We built an industry on the physical distribution of paper in a localized world, and we’re now having to get to grips with the digital distribution of data in a networked world.”
Unfortunately, too many bankers still haven’t realized the full implications of this shift or the need to flip old models on their head. To illustrate this need in his book Banking on Digital Growth, James Robert Lay, CEO at the Digital Growth Institute, talks about a pyramid growth model. He writes, “When digital came on the scene, digital was bolted onto the pyramid, retrofitted to the old structure.”
But, as Lay shows, that approach no longer works. Today, digital must be the primary entry point at a bank. This means that the traditional pyramid must be flipped:
Lay writes, “What we’re trying to do is flip the growth pyramid upside down: transform the entire growth model so it’s now three-fifths digital and two-fifths physical — at a very minimum — as digital becomes the primary driver for growth, regardless of whether someone applies online, calls into a call center, or comes into a physical branch location to apply for a product. Digital is the heart of the consumer buying journey. With the new pyramid, your growth model will reflect that. In fact, maybe digital might become four-fifths — or even 100 percent — of your growth pyramid.”
This process requires adopting a digital-first mindset from top to bottom at your organization.
How do you do this?
1. Find or hire a core group of digital enthusiasts.
Start small. Find a group of people who are enthusiastic about — and have the know-how — to enact a digital-first approach. What does digital onboarding look like? What does digital lending look like? What does digital card issuance look like? You’ll want people who have a clear, simple, and enthusiastic response to these questions — people who are willing to envision the possibility of eventually becoming a digital-only bank. These people are your digital braintrust.
2. Get a unified vision.
The goal here isn’t to get 100% agreement on every possible way forward. Rather, the goal is to find areas of consensus wherever you can and be clear about what you need to de-prioritize. Ask for a list from each person in your digital braintrust about how they think becoming digital-first could most help their teams, departments, and company. Then look at where the suggestions overlap and start there.
3. Refine your vision to a 5-minute pitch.
How do you know when you’ve arrived at an effective vision? John Kotter, chairman at Kotter, Inc, gives a useful rule of thumb, saying, “if you can’t communicate the vision to someone in five minutes or less and get a reaction that signifies both understanding and interest, you are not yet done with this phase of the transformation process.” Ask yourself how you fare on this front. Can you communicate your vision for digital transformation in five minutes or less and get an enthusiastic, informed response? If not, keep refining — paying attention to how your vision ties to a tangible return on your investment.
4. Track your success.
When you start any initiative, you need to know what success will look like when you finish. To do this, you’ll need a way to track progress and success — preferably in an easily accessible and dynamic dashboard that everyone can see. At MX, for instance, we put our metrics on TV screens throughout the office, monitor unified dashboards, use proprietary algorithms to track interactions internally, and more. Fortunately, digital-first banking makes tracking easier than ever.
5. Repeat your vision everywhere.
To become a digital-first bank, you’ll need everyone to know what you’re doing. Talk about being digital-first in your hiring guides. Hang your approach on the wall in your offices. Weave it into your emails and instant messages. Mention it in company meetings. Whatever it takes to make digital-first top of mind. After all, changing your culture requires way more than a single email message. It requires changing habits, and changing habits requires constant reminders.
A Case Study in Going Digital-First: Citizens Bank of Edmond
Jill Castilla, CEO of Citizens Bank of Edmond, tells of her experience transforming a bank that was more than 110 years old into a digital-first bank — most pivotally with the decision to sell their branches in favor of digital banking, ITMs, and a single, premium lobby. “When I started sharing the economics through staff meetings with all of our team members, I would have tellers raising their hands and asking, ‘Why are they keeping these branches if they’re losing us so much money, and we’re saying we want to be around for the long term?’ We’re really fortunate our bank is owned a third by our employees through an employee-stock-ownership program, so those tellers are my shareholders. Having that come from them, through sharing the analytics and the information, really helped us get the buy-in.”
Still, the transition wasn’t easy. Castilla says, “This board designed those branches. They built them. They were part of the site selection so there was a lot of pride attached to them.”
Eventually, Citizens had an offer for all their branches and managed to move forward. Castilla says, “We were able to retain the deposits, just in how we communicated with customers. And then we deployed some technology to take the place of the drive-through near where those bank branches were. And we were able to have net customer growth as a result. A lot of it was about just being really transparent.”
Above all, the goal wasn’t just to replace branches with technology for the sake of technology, but to instead be driven by what’s ultimately best for customers. “Technology, from a banking standpoint, gives us a great level of care for the financial wellbeing of the people that we serve,” Castilla says. “There's not just a digital representation of the bank, but the human aspect of it — that piece is combined. And so a bank that is intuitive, both from a human standpoint as well as a digital standpoint ... is able to guide customers to achieve the dreams that they have for their businesses and for their lives.”
Human-centered digital banking. That’s the key to a successful digital-first plan.
Get Beyond Build vs. Buy
The history of banking — like so many industries — has been a history of building and buying.
There’s nothing new about it. When a bank executive decides they need a new branch, they don’t assign their tellers or loan officers to the task. Instead, they do what they’ve more or less always done: Contract outside specialists to construct it.
What’s changed today is that banks now have full-time internal employees who can build digital banking solutions directly. This forces banks to ask the difficult question of whether they should build or buy their way through the digital transformation.
And yet a fixation on building or buying negates a third option, which is to partner to create an ever-evolving and adaptable banking platform.
This partner-centered approach helps banks on two fronts.
First, it saves banks from the endless headaches that inevitably follow building everything from scratch. As Forrester Consulting writes, "Development teams are often bullish when it comes to how fast they think they can complete customer-facing projects, but those expectations often do not match reality." Forrester’s research shows that 42% of development teams at banks thought they'd complete their in-house project in less than six months, while only a quarter of projects wrapped up in that time frame. Forrester writes, "The bottom line is that development teams aren’t delivering customer-facing applications and services that are quick to update."
Second, a partner-centered approach gives banks an added measure of flexibility that can't be reached via buying solutions alone. Again, Forrester writes, "While conventional thinking dictates that internally-developed platforms deliver greater flexibility at lower costs, actual results from transformation efforts show otherwise."
In light of all of this, Forrester writes that "technology decision makers must abandon the traditional ‘buy versus build’ mentality, and instead adopt a ‘buy, build, extend, and assemble’ approach to creating a banking development platform that takes full advantage of the benefits of commercial components where possible.”
Another way to think of the “buy, build, extend, and assemble” model is as a series of partnerships. This mirrors a strategy outlined by Jane Fraser, president of Citi and CEO of Global Consumer Banking, which she describes as "a light branch footprint, seamless digital capabilities, and a network of partners that expand our reach to hundreds of millions of customers.”
Partnering in this way brings together the best aspects of building products from scratch (i.e., flexibility and control) alongside the best aspects of buying products outright (i.e., a quick rollout). The concept is captured well in the following quadrant from The Framework Bank, which illustrates the advantage of choosing to partner. It also shows that anything that doesn't have high strategic priority or urgency should rightly be deprioritized.
Here’s a breakdown that illustrates each option:
- Build: Best if you want total ownership, a full development team, and a long timeline.
- Buy: Best if you have a limited development team and have a short timeline.
- Partner: Best if you want flexibility, a partial development team, and have a short or medium timeline.
By merging strategic priorities and urgency via bank-fintech partnerships, traditional financial institutions can more successfully move toward digital maturity. Matthew Michaelis, Chairman and CEO of Emprise Bank, describes his experience in terms of the value he's seen. "One of the things we find really valuable about a partnership — and it’s something that I think differentiates itself in a meaningful way from some other relationships — is that you have that two-way learning," he says. "There are some great examples where our partners help us use their capabilities much better than we would have otherwise, just based on their learnings and what they have seen work in other places."
When a partnership works well, this spirit of collaboration fuels innovation across both teams. As Brandon Dewitt, CTO at MX, writes, “Financial institutions can leverage third parties for their agile approach and rapid innovation, allowing them to allocate resources more strategically, expand lines of business, and reduce errors in production. These new innovations will help your financial institution compete more effectively and gives customers better, smarter and more advanced tools to manage their financial lives.”
In short, partnering enables the best of both worlds: flexibility plus speed to market. Just look at the variety of approaches available via the MX cross-platform mobile framework, which gives banks the ability to quickly iterate, port custom features, and stand up a range of design choices. With this framework, banks can innovate in weeks, not years — and do it on their terms.
Know Your Customers Via a 360-Degree View
Once you have a digital-first mindset and a partner-driven approach to digital banking, traditional banks have to pivot from thinking of the niche of locality to thinking of the niche of persona. Who exactly are you trying to reach, and what is the job they want done? What is your market differentiation? How do you position yourself in a competitive market?
These are questions that challenger banks are asking to effective ends. As Ron Shevlin writes, “Challenger banks like Bank Boulevard (which caters to black consumers), Daylight (focusing on LGBT consumers), and Panacea Financial (serving physicians) are carving out defensible market niches by focusing on the unique needs of definable segments of the market. In some respects, challenger banks have become the new “community” bank. It’s just that the communities they serve aren’t geographic communities, but affinity-based communities.”
For too long, traditional banks and credit unions have relied on vague notions of customer service and location to win and retain customers. Unfortunately, that approach no longer works. You have to get specific, spelling out exactly who you want to reach and how you’ll help them do the job they need to get done.
Sam Maule, Key Account Executive at Google, says that when he consults with banks, he focuses on the root problem. “We don't start with a product,” he says. “We start with the job they're trying to get done. … What is it they're trying to do? What are they trying to actually get done? It requires actually diving in with the customers and talking with them and understanding what their intent is, what they are facing, and what all the touchpoints are that surround them. If you start there, it's amazing. Come out of that in the conversations and what product you'll eventually come to and what will actually work and what solution you're solving. And I guarantee you it won't be where you thought you were going to go.” Maule adds, “There's not a one size fits all strategy. … What's critical is to find out what's unique to your DNA, what's unique to your customers that you're servicing, and you should own that.”
So, what’s unique to your DNA?
You have to find your niche — the group you want to reach. And it can’t just be about location and customer service.
To do this well, you need a 360-degree view of your customers, replete with their internal and external accounts.
A 360-Degree View: The Key to Knowing Your Customers
In a prior ultimate guide, we asked U.S. consumers how valuable it is or would be to see their financial accounts in one app. Nearly half (48%) said that it would be very valuable, while nearly the same percentage (43%) said it would be somewhat valuable, adding up to 91%.
Despite the overwhelming majority who said this feature would be valuable, only 40% said their bank currently offers it. This represents a remarkable disconnect between what consumers and what financial organizations are providing them.
Put simply, people want the ability to sign into a single place and see everything — checking, savings, car loan, mortgage, 401(k), etc. — in one view. They want to see balances and transactions together so they don’t have to sign into a separate account to get a full sense of their finances.
And yet financial organizations still haven’t fully implemented solutions on this front, as evidenced by the 60% of consumers who say they don’t have this ability.
What these organizations might not realize is that enabling customers to see all their data in one place also benefits them in the form of being able to gather a 360-degree view of each customer’s financial life. In this way, financial organizations can better understand their customers and make hyper-relevant offers that meet each customer where they are. It also gives financial organizations insights against direct competitors each time a customer aggregates a financial account from that competitor. (If you aren’t seeing what your competitors are doing via aggregation, your competitors might be doing it to you.)
Traditionally, aggregation has happened via screen scraping from third parties that don’t have a formal relationship with the organization they scrape from. However, this process is quickly changing today, as more organizations are shifting to whitelisting data aggregators and implementing direct APIs. These new options bring many benefits to financial organizations that previously didn’t exist, including added transparency, clearer permissions, and increased security.
As more financial institutions implement APIs, direct aggregation methods will become standard. This move will enable increased innovation since customer-permissioned data sharing is often bi-directional, meaning that financial institutions and fintech companies can share and receive data from the sources they connect with via API. This capability sets up all parties involved to use that data in creative ways to best serve and advocate for their customers.
Above all, this customer-centered approach to banking is at the heart of where things are headed. And that’s terrific news for the 91% of consumers who value account aggregation — as well as the financial organizations who offer it.
Build a Data Flywheel
Data-enabled disruption has overtaken key industries again and again, perhaps most famously when Netflix and Amazon overpowered competitors from Blockbuster to Sears .
To get a sense for how massive this change has been, look at how Amazon’s market capitalization grew from 2006 to now — an increase of more than 5000% compared to a increase of roughly 30% for Walmart and a decrease of 100% for Sears.
While the primary benefit Amazon provides is an effortless, one-click experience where products show up on your doorstep two days after purchasing them, data powers everything behind the scenes.
It works like this: The more engaged users that Amazon has, the more user data they acquire. This data helps them offer a more compelling experience to these users (and promote their own products), which in turn drives up the number of profitable users. The whole cycle is a flywheel that spins faster and faster with each turn, widening the gap between Amazon and their competitors.
Financial institutions can and should leverage this same data flywheel effect. After all, they collectively capture trillions of data points, creating a goldmine of essential insights on end users.
To do it well, focus on data aggregation, data enhancement, data analytics, and data discovery. All of this represents the foundation of all effective digital experiences.
You have to lay the right foundation.
Aggregation enables users to see all their accounts and transactions in one place. For example, if ACME Financial offers account aggregation, users can log in and view data from potentially anywhere they have a financial account — all through ACME Financial banking portal. In short, aggregation turns ACME Financial into a one-stop financial hub.
The process generally requires either “scraping” a financial institution’s website by mimicking human behavior or connecting directly through a data exchange. Of the two, connecting via a data exchange is a vastly better experience since it’s the fastest and most secure way to aggregate financial accounts.
However it happens, data aggregation empowers both the end user and the financial institution. The end user sees all their finances in one place, and the financial institution gathers all the data it needs to best help their end users.
Of course, it’s not enough to just aggregate data — largely because raw transaction data is often totally incomprehensible. Who knows what a transaction description like CSI-308613/22120-CHV refers to?
The fact is that consumers feel frustrated with unclear transcription descriptions, with 71% of consumers saying it happens at least yearly and 17% saying it happens at least once a month.
This results in user frustration, complaints to your call center, and a negative perception of your brand. In addition, it does little to help you understand your account holders. How can you make use of the data to empower people to be financially strong if the data isn’t clean?
If you’re going to fix this problem, you’ll want transaction data that has been cleansed, categorized, and classified.
Cleanse. When your users can’t understand a transaction description, they don’t get upset with the vendor or the card provider. They get upset with you. They dial in to your call center and drain your employee’s time. You can prevent this problem by cleaning all descriptions.
Categorize. Your users are looking for help with their finances, and they don’t want to spend all their time tracking their spending habits. By adding automatic categorization to your transaction feeds, you help these account holders better manage their money while improving user loyalty, driving revenue growth, and paving the way for future technology.
Augment. When you properly augment transactions, you can see which of your users’ transactions are marked as bill pay, direct deposit, fees, and more — giving you the ability to more precisely target end users. For instance, you might target account holders who use bill pay with your competitors to use bill pay with you instead (amping up your bottom line). You might also append demographic data and purchase behavior to make it even more powerful for eventual targeting.
Enhancing transactions this way — through cleansing, categorizing, and augmenting — sets the right foundation for not only a better mobile experience but also for whatever the future may bring. For instance, if you want to offer voice-assistance or AI-enabled features, you need clean data. (These features are useless without it.) As Ron Shevlin, Managing Director of Fintech Research at Cornerstone Advisors, asks, “If you don't have good data and analytics capabilities, what good will an AI-first strategy do?” You have to lay the right foundation with data before you start dreaming of an advanced user experience.
Do you know how many of your account holders use your digital products at least weekly? Do you know how many have aggregated an external account? Or what percentage have a loan with you?
If you have this information, is it easily accessible or is it buried in a database that’s difficult to view?
To transform into the digital era, you’ll want all essential data to be instantly available via a realtime dashboard. This might include total users over time, number of accounts per user, sessions per user, mortgages by organization, credit cards by interest rate, and much more — all of which is available via MX Analytics. Best of all, with machine learning available via MX Pulse, this data can be used for predictive purposes, giving you the ability to truly benefit your customers.
All of this culminates in an optimal digital experience.
Optimize and Personalize the Digital Experience
Once you’ve adopted a digital-first mindset, laid out a partnership strategy, started to know your customers via a 360-degree view, and built a data flywheel, you’re in the perfect place to optimize the digital experience — a task that’s more important than ever.
As Paul McAdam, senior director of banking intelligence at J.D. Power says, “With fewer customers visiting branches, it will be important for retail banks to replace the in-person service they would have provided with personalized services delivered instead through digital channels.“ He adds, “Given the technology available to banks, customer pain points with digital should be easy to address. Let’s keep in mind that digital retail banking was introduced 25 years ago. Executing basic user-friendly functionality, providing a full range of services and offering easy ways to pay and move money are areas where banks could improve their digital offerings.”
What’s more, all three primary trends in a 2021 trends report from Javelin Research align with optimizing the digital experience. They write, “The pandemic has heightened the pressure on FIs in three key ways — to develop new and better ways to help consumers monitor and manage their finances, to deliver personalized advice in digital channels, and to better satisfy the next generation of consumers.”
With the foundation of connectivity and data enhancement, you’re well on your way to help in all three of these areas. For instance, MX Pulse enables financial services companies to offer a newsfeed of personalized insights that empowers users to be financially strong. Users can view a list of everything they currently subscribe to (and might be surprised to know how much it all adds up). They can also see notifications about how they’re doing in real time and even see offers for products that might be a better fit for them, a feature that, as we mentioned above, 94% of consumers say they want.
How are you doing on this front? Can you see whether a customer’s mortgage rate with your competitor is too high? Can you see whether they’re paying too much for a car loan?
With the foundation of aggregated and enhanced data, coupled with the AI of Pulse, you can make these hyper-personalized experiences a reality and protect, guide, and inform your customers.
The system learns, based on each user’s financial patterns and choices, how to make the experience unique to them.
Here are just a few examples of what’s possible.
Giving your customers immediate and personalized alerts around potential fraud saves you time and money, especially as it relates to what could otherwise become a cumbersome legal process that wraps up your contact center. In addition, helping customers avoid unwise spending habits leads to long-term trust.
- Duplicate payment detected
- Uncategorized transactions
- Higher subscription amount notification
As you guide your customers step by step to financial strength, you pave the way for them to build their savings with you.
- Savings opportunity
- Monthly subscriptions
- Budget notifications
By helping your customers know exactly what’s happening with their money in a way that is far less cumbersome than budgeting, you transform from an intermediary to a true advocate.
- Upcoming subscriptions
- Payroll advance notification
- Debt payment reminders
A Personalized, Full Money Experience
These examples are just a small insight into the possibilities of Pulse, which caters to the individual needs of each user. As you can see from these examples, the right foundation gives you the ability to use this data to make hyper-personalized offers, win business directly from your competitors, and positively impact the lives of your customers. It sets you up to help people manage their money, offer personalized advice and appeal to the next generation — just as Javelin suggests you should do in 2021.
With all of this at play, you’re also set to ensure you’re offering a mobile experience that goes well beyond what’s considered table stakes — an experience that offers all of the mobile banking features that customers most demand, shown in a consumer survey from Business Insider.
By offering a personalized and full-feature money experience like this, you’ll be able to withstand new competition from challenger banks for years to come.
Conclusion: Money Experience = Growth
In the end, people want value and convenience. For example, KPMG’s “Future of Retail Banking” report shows that the key purchase drivers for consumers are the value for their money, followed by the ease of buying. Given that transactions done on a mobile device are exponentially cheaper for banks than transactions done in a branch, over time improving the digital experience will yield a high return on investment.
This is how the battle over the future of banking will go: Those institutions that can successfully adopt a digital-first mindset, partner with the right fintech providers, offer a 360-degree view, create a data flywheel, and optimize the digital experience will be able to hold their own no matter what a challenger bank throws at them. It will be a tough transition and it’s certain to result in ongoing industry consolidation, but those that take the lead will find themselves enjoying unprecedented growth.