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10 min read

Banks Should Make 2024 a True ‘Year of Digital’

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Banks and credit unions won’t find a perfect digital vendor. What they can find is the right partner to fulfill their strategic needs. 

2024 will prove to be a remarkably busy year in the digital space, when many financial institutions will make near-life-or-death choices about the future of their digital platforms and how they will support them.

While the mobile banking revolution has been going on for more than 15 years, most bank and credit union executives report that they are still only partially through their digital transformation. In fact, according to Cornerstone’s What’s Going On In Banking 2024 report, 14% of banks and 20% of credit unions stated that they are less than 25% complete with their digital transformation.

A key aspect of digital transformation centers around which retail and business digital platforms an institution will place its faith in for future growth and customer retention. In the face of a digital vendor landscape teeming with activity and competition, financial executives have several key trends to consider:


#1. The major core providers are under the gun to prove their digital capabilities.

As the industry’s big tech companies go toe to toe with best-of-breed digital solutions, this era may be their last chance to prove they can remain competitive in the digital game:

  • FIS is staking its hope on a Digital One or “D1” strategy. This initiative is proceeding, but it has faced delays and unexpected changes concerning which products will fill each part of the retail and business digital tech stack. Importantly, the company’s announced migration of “CEB” customers to D1 is a major lift and cheese-moving event for FIS customers.
  • Fiserv has worked to consolidate multiple digital platforms, and after disappointments from previous aspirations of its Corillian, Retail Online Banking and Architect platforms, the company is now working to build credibility with its “Experience Digital” strategy.
  • Jack Henry continues to build out its Banno platform from a prior acquisition and is rapidly moving its customer base away from the NetTeller internet platform. Like FIS, this announced migration has spurred many future digital discussions among the JHA install base.

As one might conclude from these updates, it’s wise that financial institution leaders don’t panic and force a core vendor to determine their digital future but rather build a conscious plan with strategic considerations for the future.


#2. The major digital providers are driving healthy competition while service remains a challenge.

Over the past decade, best-of-breed competition has grown with major players like Q2, NCR and Alkami working to hold their ground while competition has grown from platform/toolkit type players like Backbase and NCR D3 and niched entrepreneurial players like Tyfone, Narmi, Apiture, Mahalo and Bankjoy. Lumin in the credit union marketplace has gained widespread attention as a new best-of-breed player.

The digital players are working to differentiate based on stronger customer experience features and tight integrations in areas such as financial health, data-driven marketing and fraud/security. While the general flow of new capabilities is reasonable, service and support from some of these players can be inconsistent and backlog on roadmap items can be frustrating. This is an area where speed-to-market competition will be important.


#3. Banks and credit unions are maturing their internal digital support capabilities.

Faced with competition from national banks, challenger banks and fintechs, financial institutions are working to take a portion of matters into their own hands, bringing in strong digital product management, user experience, development and integration capabilities. While very few are developing digital applications from the ground up, efforts are being made to better configure, customize and integrate digital platforms more at fintech speed. This is forcing traditional banks and credit unions to adopt more agile practices that allow for the continuous delivery of new customer experiences and features.

Banks and credit unions that have been hearing grumbles from users, noticing a decline in App Store ratings, or fighting a losing battle to improve their Net Promoter scores (NPS) for active digital users realize it’s time to explore their options in the vibrant digital banking ecosystem.


#4. Bank and credit union leaders must love their due diligence!

Choosing a new partner is no small feat. There are a multitude of digital banking solutions out there, each with its own set of pros and cons. With every change comes opportunity, whether an institution is migrating to a new solution with an existing provider or deciding to navigate the myriad alternatives.


Every digital leader and the executive team they support should ensure the following strategic process is occurring for digital:

  • Start by reviewing existing contract language. Your options in this digital revolution depend on the fine print. Understand your contractual commitments, obligations and potential avenues for transition. Knowledge is power, especially in the opaque world of vendor contracts.
  • Define real digital outcomes versus glorifying the tech. Digital platforms and their support resources are expensive, and it’s important to define business success in terms of digital usage, satisfaction scores, product sales, digital account opening and the exact experience that aligns with the bank or credit union’s brand and strategy. For example, does the institution want a unified experience for consumers and small businesses to differentiate from competitors? How important is integrating financial health capabilities into the experience? How will the institution compete with the more sophisticated treasury management business?
  • Due diligence is your friend. Before deciding on a new digital provider, conduct a deep diligence and future road mapping exercise. Don’t be sold on vaporware. Demand concrete evidence for each feature, use case and integration presented by a provider. Ask for specific product delivery roadmaps and dig into the vendor’s existing client base to determine how well a particular vendor delivers on its roadmap commitments.

There is no perfect vendor. It is all about finding the right partner to fulfill your strategic needs.  Don’t wait for the ball to drop on a system that already isn’t meeting your needs. Get ahead of the game and resolve to make 2024 the institution’s true Year of Digital.

Josh Davis is a director at Cornerstone Advisors. Follow Josh on LinkedIn. Jessica Pinkston is a senior director at Cornerstone Advisors. Follow Jessica on LinkedIn.

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