The fusion of financial services and technology has opened new frontiers for banking, challenging traditional institutions to redefine their digital journey. Retail banking is undergoing a significant transformation towards digitalization. The “Alkami Retail Digital Sales & Service Maturity Model Report” provides invaluable insights from 215 financial institutions into how digital channels are redefining consumer experiences in banking. The research shows how banks and credit unions can leverage retail banking solutions, namely their online banking and mobile banking platforms, to drive revenue growth and how to embrace advancements such as leading-edge applications and data analytics to enhance customer service, improve user experiences and engagement, and maintain competitiveness.

The 4 Segments of Digital Maturity Defining Transformation

As discussed in our first blog, “Alkami Research Measures Digital Maturity in Financial Institutions,” not all financial institutions are at the same level of digital maturity; the research illustrates what separates those still digitally emerging from those who are on the forward edge of the digital and data spectrum. Analysis of the data categorizes the banks and credit unions in the study into 4 evolutionary segments: Patiently Exploring, Innovation-Ready, Digital-Forward and Data-First. 

The research report titled, “Digital Sales & Service Maturity Model,” unpacks the differences between these segments and the below insights:

• Digitally mature institutions showed twice as much revenue growth in 2022 as the least digitally mature.
• “Digital transformation starts when legacy leadership embraces change,” is a concept embraced by the most advanced, embedding in their DNA the commitment to innovation and change-readiness in expanding digital capabilities
• Banks and credit unions who have democratized analytics across their institutions and have a data-driven mindset are leading, and leveraging data to inform most decisions
• Some smaller institutions are punching above their weight in their digital maturity journey

The Digital Account Holder Experience

At the core of the digital transformation in retail banking is the shift towards prioritizing account holder experiences. More than half of the Digital-Forward and Data-First groups within the industry now prioritize investment in account holder experience technology over all else. This pivot from traditional banking methods to digital-first strategies signifies a broader change in how financial institutions approach account holder engagement through a digital sales and service concept.

Predictive Personalization: The New Standard

The era of one-size-fits-all banking services is ending. Today, the most successful banks and credit unions use advanced analytics and artificial intelligence to offer predictive personalization. This approach not only meets but anticipates account holder needs, offering personalized financial advice, product recommendations, and more, all in real-time. By transforming data into actionable insights, financial institutions can create more meaningful and engaging experiences.

The Role of Technology Partnerships

One of the key strategies for enhancing digital maturity, as highlighted in the report, involves partnering with third-party vendors to pilot emerging technologies. This collaborative approach allows banks and credit unions to stay ahead of the competition by integrating cutting-edge digital banking solutions that enhance the user experience, from seamless digital account opening processes to advanced security measures that protect consumer data.

Cultivating a Data-Driven Culture

The foundation of a superior digital consumer experience lies in a financial institution’s ability to harness and analyze data effectively. The report underscores the importance of shifting culture from intuition-led to data-driven decision-making. By embedding data analytics into the foundational strategies of the institution, banks and credit unions can unlock new opportunities for growth, tailor products and services to individual account holder preferences, and optimize operational efficiency.

Embracing Change for Future Success

As the banking sector continues to evolve, the financial institutions are encouraged to embrace change and innovation. This means not only adopting new technologies but also rethinking traditional business models and processes. Banks and credit unions that are open and quick to adapt and pioneer can better meet the rising digital expectations of their account holders, setting a new standard for excellence in customer service.

Conclusion

The “Alkami Retail Digital Sales & Service Maturity Model Report” paints a clear picture of the future of retail banking—a future where digital transformation and channels play a pivotal role in enhancing consumer experiences. By prioritizing a customer-centric techstack, fostering data-driven cultures, and embracing innovative partnerships, financial institutions can thrive in this new digital landscape, and continue the path forward in the digital maturity journey. As consumer behavior continues to shift heavily towards digital, the institutions that succeed will be those that view these changes not as challenges but as opportunities to redefine what it means to offer exceptional customer service in the digital age.