Research Findings - Digital Banking Trends

New Research Digs Into Digital Banking Trends and What Financial Institution Leaders Really Want

As financial institutions start the new year, new research reveals a growing sense of urgency among financial institution leaders to modernize their digital banking offerings. in90group Research recently completed a survey of more than 100 executive leaders of US financial institutions.

The key findings show that nearly half (48%) of financial institution leaders are less than fully satisfied with their current digital banking offerings. The top reasons respondents cited for this dissatisfaction were:

• Outdated core technology systems and digital solutions
• Lack of skilled resources to guide and deploy new solutions
• Time needed to bring new solutions to market

This dissatisfaction comes at a time when usage of online banking services is skyrocketing, as the projected number of digital banking users reaches 216.8M in the US by the year 2025, according to an InsiderIntelligence report. In 2023, leaders are feeling the pressure from all different angles:

• Customer/member expectations are rising, driven by their personalized retail experiences with companies like Amazon and Google.
• Technology is evolving at break-neck speeds, enabling tech-savvy institutions to find extreme efficiencies and make more informed decisions about their growth strategies.
• Global boundaries are disappearing, forcing many institutions to offer more multilingual, multinational capabilities.
• Competitive threats from new market entrants, such as fintech innovators and neobanks, are rising as these organization are more likely to leverage modern technology to respond faster to market demands.
• Cybersecurity threats continue to increase in volume and level of sophistication, making banks and credit unions that operate on outdated software more susceptible to attacks.
  
  

Making a Change

According to the survey, most financial institution leaders understand the urgency to modernize their digital banking offerings, and many have put forth aggressive goals for their digital transformations, including:

• 36% want to be viewed as an industry leader
• 26% aspire to improve the lives of the communities they serve
• 24% plan to expand the markets they serve through their digital transformation strategies

But the barriers that stand in their way are significant. In fact, 34% say they struggle most with the time it takes to bring a new solution to market. 24% feel their top challenge is the lack of internal expertise and resources to support the launch of new solutions, which makes selecting the right digital banking

platform partner even more critical. And finally, 16% report their biggest barrier to be integrating new solutions with their core system. Having a modern, open banking platform is key to overcoming the integration issues that have plagued the industry for decades.

Investing in the Future

When asked about investing in new solutions for the future, 70% of respondents said they plan to invest in digital banking solutions that help them make better use of the data captured across multiple channels. 65% said they plan to invest in solutions that more easily integrate with fintech solutions, and 51% said they plan to invest in open banking strategies.

Each of these investment categories offer new hope for banks and credit unions who want to compete more effectively in today’s highly dynamic marketplace. Not only will they help organizations make more informed decisions based on data, but they will also create a more agile infrastructure that allows for more personalized digital banking experiences and faster time-to-market with new digital offerings.

Taking the First Step

Delivering better digital banking experiences requires looking beyond the transactions in order to create and configure the personalized digital experiences customers and members expect from their financial institution. When implementing new strategies to improve digital delivery, financial institutions must look to leverage modern, flexible, and open banking technologies, including open API access and a micro front-end architecture that will empower their financial institution with the agility required to keep pace with the rapidly evolving digital landscape.

References

Phaneuf, Alicia (2022). The disruptive trends & companies transforming digital banking services in 2022. Digital Banking in 2022: Disruptive Bank Technology Trends (insiderintelligence.com)