Evaluating Digital Banking In 2023

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Platforms that offer future flexibility, as opposed to products with a fixed shelf life, should be part of any bank’s digital transformation strategy for 2023, says Stephen Bohanon, co-founder and chief strategy and product officer at Alkami Technology. Chatbots and artificial intelligence can deflect many simple, time-consuming customer queries — saving time and costs — but digital channels can go further to drive revenue for the organization. To do that, bankers need to invest in data-based marketing and account opening capabilities.

Topics include:

  • Platforms Vs. Products
  • Sales Via Digital Channels
  • Advantages of Live Service

Renew, Recharge and Reassess Customer Service

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As interest rates rise and the retail housing market cools down, lenders are bracing for an uncertain environment.

While banks cannot control the market, they can control how they respond and future-proof their business. Successful navigation in these unchartered waters requires institutions to reassess traditional product, service and industry boundaries in order to capture and create new sources of value. Digital transformation and innovation will remain an important strategic priority in 2023 and beyond — however, it is now equally important for institutions to provide lasting value to customers through personalized, highly tailored services.

The slowing housing market creates a unique opportunity for financial institutions to revisit and refresh these fundamentals, including exploring how they can deliver a more personalized experience. As banks remain focused on their roles as financial intermediaries, this time of challenge can also be a time of opportunity to strengthen existing relationships and expand loyalty with customers. Lenders can also take advantage of a slower market by implementing new automation strategies to further streamline their mortgage loan process. Successful institutions will recognize that this slower pace enables them to recharge, rethink and renew their focus on providing customers a superior experience.

Accelerating personalization and building loyalty is critical in today’s increasingly competitive financial services market. The answer isn’t just faster, more automated technology; financial institutions must adapt a hyper-personalized approach. According to a recent NCR study, 60% of U.S. banking consumers want their primary financial institution to provide personalized financial advice. Many Americans are facing an uncertain financial future and don’t believe their financial institution is providing the necessary support.

To successfully deliver that personalized experience, institutions must leverage data to provide more relevant, timely support. That means more effectively gathering and analyzing data to yield insights that ultimately help the bank connect with the customer. Banks should have the most accurate and complete picture of their customer’s economic health, which allows them to make meaningful suggestions and provide impactful advice. Consumers can then look to their data enabled and informed banker as a guiding force helping them build a more stable financial future.

Anticipating customer needs and catering to them with personalized offerings allows banks to generate increased revenue, all the while meeting customer expectations around personalized experiences. According to the 2019 Accenture Global Financial Services Consumer Study, one in two consumers wants personalized banking advice based on their circumstances. They want an analysis of their spending habits and advice on handling money. Additionally, 48% of respondents indicated that personalized banking data, such as spending, would help them change how they used their money.

A 2021 Capco research report found that 72% of customers say personalization is highly important in today’s financial services landscape. This number increases for younger generations: 79% of Gen Z customers say it is critical their financial institutions provide more personalized offers and/or information to help them reach their financial goals.

Customers provide banks with a lot of information about themselves across their interactions. Banks can use this data carefully, employing technology like artificial intelligence to anticipate customer needs. Anticipating and then proactively acting on those needs is crucial to creating an effective, personalized experience. Banks can also position products with sensitivity, effectively demonstrate their understanding of their customer’s unique needs or suggest curated products that demonstrate a knowledge of that customer’s specific financial needs and ultimately, build lasting loyalty.

Banks should also consider the way they approach economic distress in a manner that doesn’t weaken customers’ future foundation. Institutions should examine their interactions with both the rental market and the single-family ownership market. Banks need to think in terms of households, not consumers. Consider the household and heads of households instead of thinking of them as consumers.

There is an opportunity in this moment for institutions to create more personalized offers that are relevant to their customers. To succeed, banks must take operational steps to authentically personalize offerings to their customers, using technology in a way that’s fair and compliant.

Leveraging Innovations to Double Down Where Fintechs Can’t Compete

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For years, financial technology companies, or fintechs, have largely threatened the domain of big banks. But for community banks — perhaps for the first time — it’s getting personal. As some fintechs enter the lending domain, traditional financial institutions of all sizes can expect to feel the competitive impact of fintechs in new ways they cannot afford to ignore.

The good news is that fintechs can’t replicate the things that make local community banks special and enduring: the relational and personal interactions and variables that build confidence, trust and loyalty among customers. What’s even better is that local financial institutions can replicate some of the fintechs playbook — and that’s where the magic happens.

It’s likely you, the board and bank management understand the threat of fintech. Your bank lives it every day; it’s probably a key topic of conversation among the executive team. But what might be less clear is what to do about it. As your institution navigates the changing landscape of the banking industry, there are a few topics to consider in creating your bank’s game plan:

  • Threat or opportunity? Fintechs give consumers a number of desirable and attractive options and features in easy-to-navigate ways. Your bank can view this as a threat — or you can level up and find a way to do it better. Your bank should start by identifying its key differentiators and then elevating and leveraging them to increase interest, engagement and drive growth.
  • It’s time for a culture shift. Relationships are not built through transactions. Banks must move from transactional to consultative by investing time, talent and resources into the relational aspects of banking that are best done in-person. They also need to find ways to meet the transactional needs of consumers in low friction, efficient ways.
  • It’s not about you … yet. Step outside of the services your bank directly provides. Think of your institution instead as a connector, a resource and trusted advisor for current and prospective consumers. If your bank doesn’t provide a certain service, have a go-to referral list. That prospect will continue to come back to you for guidance and counsel and one day soon, it will be for the service you provide.
  • What’s in your toolbox? What is the highest and best use of your team’s time? What are your team members currently spending time on that could be accomplished more efficiently through an investment in new, different or even fintech-driven tools? By leveraging technology to streamline operations, your bank can benefit from efficiencies that create space and time for staff to focus on relationship-building beyond the transaction.
  • Stop guessing. You could guess, but wouldn’t you rather know? Banks have access to an incredible amount of data. Right now, many financial institutions are sitting on a treasure trove of data that, when activated appropriately, can help target and maximize growth efforts. Unlocking the power of this data is key to your financial institution’s growth and evolution; data drives action, offering valuable insight into consumer behaviors, preferences and needs.

Your bank can adopt a view that fintechs are the enemy. Or it can recognize that fintechs’ growth stems from an unmet consumer need — and consider what it means for your bank and its products and services. The key is doubling down on the who, what and why that is unique to your brand identity, and capitalizing on the opportunity to highlight and celebrate what makes your bank stand out, while simultaneously evolving how your institution determines and delivers against your consumers’ needs.

2022 Technology Survey: Complete Results

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Bank Director’s 2022 Technology Survey, sponsored by CDW, surveyed 138 independent directors, chief executives, chief operating officers and senior technology executives of U.S. banks below $100 billion in assets to understand how these institutions leverage technology in response to the competitive landscape. The survey was conducted in June and July 2022, and primarily represents banks under $10 billion in assets. Members of the Bank Services program have exclusive access to the full results of the survey, including breakouts by asset category.

The survey finds that most respondents (81%) say their bank increased its 2022 technology budget over last year, reporting a median 11% increase. Banks have primarily prioritized investments in new technology features and updates in areas like security, or where customers frequently interact with the bank, like payments or digital loan applications. 

Leveraging technology to create a more competitive and efficient organization requires internal know-how, and directors and executives find this to be a key area for concern: 48% worry about an inadequate understanding within the bank of emerging technologies. Forty-five percent say they’re worried about their organization’s reliance on outdated technology. 

While directors aren’t involved in day-to-day decisions about the bank’s technology, the board needs to align technology with strategy and ensure that the bank has the resources it needs to achieve its goals. Forty-two percent of respondents say their board has at least one member they would consider to be an expert in technology, including digital transformation, user experience or data analytics. 

Click here to view the complete results.

Key Findings

The Competitive Landscape
Fifty-six percent of all respondents view local banks and credit unions as their top competitive threat, followed by big and superregional banks, at 46%. One-third worry about competition from big tech companies such as Apple, while an equal number are concerned about competition from digital, nonbank business lenders. 

Hit-or-Miss on Digital Applications
Nearly half of respondents say their bank has a fully digital process for opening retail deposit accounts, with larger shares representing banks over $1 billion reporting as much. Far fewer respondents report a fully digital process for retail loans, small business deposits or loans, or commercial loans. 

Generational Divides
Just 25% of the directors and executives surveyed say their bank has the tools it needs to effectively serve Generation Z (16-25 years old), and half believe their institution can effectively serve millennials (26-40). Eighty-five percent say as much about Generation X (41-56), and 93% say this of baby boomers (57-75). 

All-In on the Cloud
Eighty-eight percent say their bank uses cloud technology to generate efficiencies internally; 66% use application programming interfaces (APIs), which allow different applications or systems to exchange data. Robotic process automation (32%) and artificial intelligence or machine learning (19%) are far less commonly used. 

New Frontiers
Three-quarters say their board or leadership team has discussed risks or opportunities related to cryptocurrency or digital assets in the past 18 months. Sixty-four percent say the same of banking as a service (BaaS), and 69% say that of environmental, social and governance issues. Cannabis, on the minds of 58%, has been more commonly discussed at banks under $5 billion of assets. 

Views on Collaboration
More than half of respondents view technology companies as vendors only, as opposed to collaborating with or investing in these firms. Thirty-nine percent, primarily representing banks over $1 billion in assets, say their institution has collaborated with technology providers on specific solutions. Twenty percent have participated in a venture fund that invests in technology companies, and 11% have directly invested in one or more of these companies. 

2022 Technology Survey Results: Investing in Banking’s Future

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In mid-July, at the peak of second quarter earnings, large regional banks showed off an array of technology initiatives. 

Providence, Rhode Island-based Citizens Financial Group, with $227 billion in assets, highlighted a new mobile app for its direct-to-consumer digital bank. And $591 billion U.S. Bancorp in Minneapolis realized the benefits of its ongoing investments in digital payments capabilities over the years, reporting $996 million in payments services revenue, or a year-over-year increase of nearly 10%.

Community banks, with far fewer dollars to spend, have to budget wisely and invest where it makes the most sense. For many, that means prioritizing new technology features and updates in areas like security, or where customers frequently interact with the bank, like payments or digital loan applications.

Bank Director’s 2022 Technology Survey, sponsored by CDW, delves into some of these strategies, asking bank senior executives and board members about the concerns and challenges that their institutions face, and where they’ve been investing their resources in technology.

Eighty-one percent of respondents say their bank increased its 2022 technology budget over last year, reporting a median 11% increase. Asked where their bank built more efficient processes by deploying new technology or upgrading capabilities in the past 18 months, 89% named cybersecurity as a key area for investment, followed by security and fraud (62%). During the same time period, 63% implemented or upgraded payments capabilities to improve the customer experience; 54% focused on enhancing digital retail account opening.

Leveraging technology to create a more competitive and efficient organization requires internal know-how, and directors and executives find this to be a key area for concern: 48% worry about an inadequate understanding within the bank of emerging technologies. Forty-five percent say they’re worried about their organization’s reliance on outdated technology.

While directors aren’t involved in day-to-day decisions about the bank’s technology, the board needs to align technology with strategy and ensure that the bank has the resources it needs to achieve its goals. Forty-two percent of respondents say their board has at least one member they would consider to be an expert in technology, including digital transformation, user experience or data analytics.

Following on the heels of Bank Director’s 2022 Compensation Survey, which found technology talent in demand, the 2022 Technology Survey indicates that most banks employ high-level executives focused on technology, particularly in the form of a chief information security officer (44%), chief technology officer (43%) and/or chief information officer (42%). However, few have a chief data officer or data scientists on staff — despite almost half expressing concerns that the bank doesn’t effectively use or aggregate the bank’s data.

Key Findings

The Competitive Landscape
Fifty-six percent of all respondents view local banks and credit unions as their top competitive threat, followed by big and superregional banks, at 46%. One-third worry about competition from big tech companies such as Apple, while an equal number are concerned about competition from digital, nonbank business lenders.

Hit-or-Miss on Digital Applications
Nearly half of respondents say their bank has a fully digital process for opening retail deposit accounts, with larger shares representing banks over $1 billion reporting as much. Far fewer respondents report a fully digital process for retail loans, small business deposits or loans, or commercial loans.

Generational Divides
Just 25% of the directors and executives surveyed say their bank has the tools it needs to effectively serve Generation Z (16-25 years old), and half believe their institution can effectively serve millennials (26-40). Eighty-five percent say as much about Generation X (41-56), and 93% say this of baby boomers (57-75).

All-In on the Cloud
Eighty-eight percent say their bank uses cloud technology to generate efficiencies internally; 66% use application programming interfaces (APIs), which allow different applications or systems to exchange data. Robotic process automation (32%) and artificial intelligence or machine learning (19%) are far less commonly used.

New Frontiers
Three-quarters say their board or leadership team has discussed risks or opportunities related to cryptocurrency or digital assets in the past 18 months. Sixty-four percent say the same of banking as a service (BaaS), and 69% say that of environmental, social and governance issues. Cannabis, on the minds of 58%, has been more commonly discussed at banks under $5 billion of assets.

Views on Collaboration
More than half of respondents view technology companies as vendors only, as opposed to collaborating with or investing in these firms. Thirty-nine percent, primarily representing banks over $1 billion in assets, say their institution has collaborated with technology providers on specific solutions. Twenty percent have participated in a venture fund that invests in technology companies, and 11% have directly invested in one or more of these companies.

To view the high-level findings, click here.

Bank Services members can access a deeper exploration of the survey results. Members can click here to view the complete results, broken out by asset category. If you want to find out how your bank can gain access to this exclusive report, contact [email protected].

Where Banks Can Find Tech Talent

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Even as the labor market cools, the need for tech talent remains particularly acute. The problem for banks is that they compete not just with other banks, credit unions and financial technology companies for data scientists, software engineers and product designers. 

“The reality is, when we start talking about engineers, designers, product individuals, every company on the face of the planet is hiring those types of talents,” says Nathan Meyer, head of innovation strategy at $545 billion Truist Financial Corp. 

That’s why Meyer and several other bankers are turning to the Georgia Fintech Academy, a unique program that trains college students across the University System of Georgia for technology jobs in financial services. Students in 26 institutions such as Georgia State, Georgia Tech and Kennesaw State, totaling 340,638 enrolled as of fall 2021, can work toward a certificate in financial services from a mix of nine undergrad courses and six graduate level courses. They might be majoring in computer science or business and taking those classes as electives. To complete the certification work, they need to finish three classes and complete an internship. The goal of the program is to help students find jobs in financial technology with employers across the nation. 

Normally, Generation Z students don’t gravitate to a career at Truist, BankSouth in Greensboro, Georgia, or Ally Financial, all of which are involved in the program, says Tommy Marshall, executive director of the Georgia Fintech Academy. Nor have they heard of the fintechs that have used the program, such as core providers FIS, Fiserv, or U.S. Bancorp’s payment processor Elavon. “If you say Square or CashApp, they’ll say yes, or Venmo, they’re there,” he says. 

Banks could improve their message to attract college students, says Meyer. “We’ve just started to do a better job around telling the story of banking, and helping students understand why it’s important,” he says. 

And the need is great. Marshall estimates that bigger banks are hiring 800 to 1,000 people from college campuses every year for technology jobs. Meyer says that Charlotte, North Carolina-based Truist needs to hire hundreds of software engineers annually and adds that even the business side of banking needs people who have an understanding of technology, as well as people who can articulate the technology needs to upper management. 

And it’s not just big banks that are hiring. Even community banks are looking for tech talent as they transform digitally. Kim Kirk, the chief operations officer for $2 billion Queensborough National Bank & Trust Co. in Louisville, Georgia, is looking for application program management and business intelligence folks. When she started working at the bank more than six years ago, a lot more employees performed mundane, clerical tasks. The bank’s business intelligence director now focuses on getting a better handle on customer information across the different departments and visualizing that data. “The talent you need is quite a bit different than what you needed maybe even five years ago,” Kirk says. 

This fall, she hopes to work with Fintech Academy students on a way to use predictive analytics to foresee when a customer is going to close an account. “We really need a way to be able to get a 360-degree view of our customers,” she says. 

Meyer, meanwhile, was interested to the program as a way to recruit racially and ethnically diverse prospects to Truist, so the bank’s employee base looks like the communities it serves. Truist has its heaviest branch concentration in the Southeast, following the consolidation of SunTrust Banks and BB&T Corp. in 2019, but it also crawls up the Eastern Seaboard into Washington, D.C., New Jersey and Pennsylvania. Marshall estimates that 71% of the students in the Fintech Academy belong to minority racial or ethnic groups and a third are women, due to the nature of the schools inside the Georgia university system. In its three years of operation, the Georgia Fintech Academy has placed 1,600 students in internships or jobs.

Although Marshall says other universities offer certificates in fintech, they’re mostly associated with graduate degrees or executive-level education, and won’t nearly meet the demand for talent. Outside of Georgia, the Centre for Finance, Technology and Entrepreneurship in London has noncredit courses, and Duke University, The Wharton School at the University of Pennsylvania and New York University all have programs. 

“There’s no other school system in the United States of America doing anything like what we’re doing now,” asserts Marshall.

Bank Director magazine’s third quarter 2022 issue has an additional article for subscribers on what banks are doing to attract and retain technology talent. 

What to Look for in New Cash and Check Automation Technology

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Today’s financial institutions are tasked with providing quality customer experiences across a myriad of banking channels. With the increased focus on digital and mobile banking, bankers are looking for ways to automate branch processes for greater cost and time savings.

This need should lead financial institution leaders exploring and implementing cash and check automation solutions. These solutions can improve accuracy, reduce handling time and labor, lower cost, deliver better forecasting and offer better visibility, establish enhanced control with custom reporting and provide greater security and compliance across all locations, making transactions seamless and streamlining the branch experience. However, as bank leaders begin to implement a cash and check automation solution, they must remember how a well-done integration should operate and support the bank in its reporting and measurement functions.

Ask Yourself: Is This the Right Solution?
When a bank installs a new cash or check automation solution, the question that should immediately come to mind for a savvy operations manager is: “How well is this integrated with my current teller software?” Regardless of what the solution is designed to do, the one thing that will make or break its effectiveness is whether it was programmed to leverage all the available functionality and to work seamlessly with the banks’ existing systems.

For some financial institutions, the question might be as simple as: “Is this device and its functionality supported by my software provider?” If not, the bank might be left to choose from a predetermined selection of similar products, which may or may not have the same capabilities and feature sets that they had in mind.

The Difference Between True Automation and Not
A well-supported and properly integrated cash automation solution communicates directly with the teller system. For example, consider a typical $100 request from a teller transaction to a cash recycler, a device responsible for accepting and dispensing cash. Perhaps the default is for the recycler to fulfill that request by dispensing five $20 notes. However, this particular transaction needs $50 bills instead. If your cash automation solution does not directly integrate with the teller system, the teller might have to re-enter the whole transaction manually, including all the different denominations. With a direct integration, the teller system and the recycler can communicate with each other and adjust the rest of the transaction dynamically. If the automation software is performing correctly, there is no separate keying process alongside the teller system into a module; the process is part of the normal routine workflow within the teller environment. This is a subtle improvement emblematic of the countless other things that can be done better when communication is a two-way street.

Automation Fueling Better Reporting and Monitoring
A proper and robust solution must be comprehensive: not just controlling equipment but having the ability to deliver on-demand auditing, from any level of the organization. Whether it is a branch manager checking on a particular teller workstation, or an operations manager looking for macro insights at the regional or enterprise level, that functionality needs to be easily accessible in real time.

The auditing and general visibility requirements denote why a true automation solution adds value. Without seamless native support for different types of recyclers, it’s not uncommon to have to close and relaunch the program any time you need to access a different set of machines. A less polished interface tends to lead to more manual interactions to bridge the gaps, which in turn causes delays or even mistakes.

Cash and check automation are key to streamlining operations in the branch environment. As more resources are expanding to digital and mobile channels, keeping the branch operating more efficiently so that resources can focus on the customer experience, upselling premium services, or so that resources can be moved elsewhere is vital. Thankfully, with the proper cash and check automation solutions, bank leaders can execute on this ideal and continue to improve both the customer experience and employee satisfaction.

5 Things Banks Can Do Right Now to Protect Older Customers

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Your bank’s most valuable customers are also its most vulnerable.

Americans born before 1965 hold 65% of bank deposits in the U.S., according to the American Bankers Association 2021 Older Americans Benchmarking Report. They are also routinely targeted by criminals: Adults ages 60 and older reported losing more than $600 million to fraud in 2020 alone, according to the Federal Trade Commission.

Banks’ role in protecting these customers is quickly becoming codified into law. More than half of states mandate that financial institution’s report suspected elder financial exploitation to local law enforcement, adult protective services or both.

However, banks need to go further to keep older adults’ money safe. Not only will these efforts help retain the large asset base of these valuable customers, but it can drive engagement with their younger family members who are involved in aging loved ones’ financial matters. Banks can do five things to support and protect their older adult customers.

1. Train employees to detect and report elder financial exploitation.
Although most banks train employees to spot elder financial exploitation, there’s confusion around reporting suspected exploitation due to privacy concerns, according to the Consumer Financial Protection Bureau. And when banks do file reports, they often aren’t filed directly with law enforcement or state Adult Protective Services agencies.

Executives must ensure their bank has clear guidelines for employees on reporting suspected exploitation. Training employees to detect and report fraud can help reduce the amount of money lost to exploitation. A study by AARP and the Virginia Tech Center for Gerontology found that bank tellers who underwent AARP’s BankSafe training reported five times as many suspicious incidents and saved older customers 16 times as much money as untrained tellers did.

2. Use senior-specific technology to monitor for fraud and financial mistakes.
Standard bank alerts don’t go far enough to protect against elder fraud. Banks should offer a financial protection service that:

  • Recognizes senior-specific risks such as unusual transfers, unfamiliar merchants and transactions that could be related to scams.
  • Monitors accounts to determine what is “normal” for each individual.
    Detects changes in transactional behavior and notifies customers of suspicious activity and their own money mistakes.
  • Bank Director identified companies and services, like Carefull, that can offer added protection by analyzing checking, savings and credit card accounts around the clock, creating alerts when encountering signs of fraud and other issues that impact older adults’ finances, such as duplicate or missed payments, behavior change and more.

3. Ensure older customers have trusted contacts.
The CFPB recommends that financial institutions enable older account holders to designate a trusted contact. If your bank isn’t already providing this service, it should. Technology gives banks a way to empower users to add trusted contacts to their accounts or grant varying levels of view-only permissions. This helps banks ensure that their customers’ trusted contacts are informed about any potential suspicious activity. It’s also a way for banks to connect with those contacts and potentially bring them on as new customers.

4. Create content to educate older customers.
Banks should inform older customers how to safeguard their financial well-being. This includes alerting them to scams and providing time-sensitive planning support, video courses and webinars about avoiding fraud.

Banks must also provide older customers with information about planning for incapacity, including the institution’s policy for naming a power of attorney. And banks must accept legally drafted power of attorney documents without creating unnecessary hurdles. Having a policy here allows for this balance.

5. Create an ongoing engagement strategy with older customers.
The days of banks simply shifting older adults to “senior checking accounts” are fading. Banks should take a more active role in engaging with older customers. Failing to do so increases the risk that this valuable customer base could fall victim to fraud, which AARP estimates totals about $50 billion annually.

Banks need a strategy to combine training, technology and content to generate ongoing senior engagement. Working with a trusted partner that has a proven track record of helping banks engage and protect older customers could be the key to implementing this sort of holistic approach.

Poll Results: Digital Transformation’s Next Phase

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NYDIG-Report.pngJPMorgan Chase & Co., which is the largest U.S. bank by assets, spends $12 billion a year on technology, investing in a vast array of technologies that include machine learning, artificial intelligence and blockchain. The second largest bank, Bank of America Corp., spends roughly $3.5 billion annually on new technology initiatives alone, according to Chairman and CEO Brian Moynihan.

It’s a lot of money — and a level of spending that smaller banks can’t hope to achieve. Executives and directors primarily representing community banks under $10 billion in assets reported a median technology budget of $1.7 million for fiscal year 2021 in Bank Director’s 2021 Technology Survey, with a median increase in spending of 10% compared to the previous year.

Those limitations should have bank leaders thinking strategically about how to allocate those precious dollars. With that in mind, Bank Director’s FinXTech division polled bank executives in January and February 2022 about technology adoption trends, and asked about specific noncore solutions that have had a recent, significant impact toward achieving their goals.

Bankers identified 20 platforms as their favorites when it came to driving that change, ranging from digital lending solutions to data analysis. You can find the companies listed on page 7-8 of the report. To categorize the solutions by type, we relied on input from FinXTech Research Analyst Erika Bailey, who manages Bank Director’s FinXTech Connect platform, a guide to financial technology companies working with U.S. banks.

While the past 18 months found many banks putting digital account opening and lending platforms in place — in response to the digital acceleration brought about by the pandemic — banks shifted plans for the next 12 months to application programming interface (API) platforms, data aggregation and analysis, and workflow automation.

To gain additional perspective on these trends, we talked to the executives of three banks that are actively accelerating their digital journeys. Mascoma Bank, a $2.6 billion mutual in Lebanon, New Hampshire, is in the early stages of implementing an API-enabled, cloud-based core platform that will help the bank customize its product and service offerings. St. Louis-based Midwest BankCentre, with $2.4 billion in assets, leveraged its digital subsidiary to expand its capabilities to all of its customers; it will expand digital account opening to business clients in 2023. And West Reading, Pennsylvania-based Customers Bancorp, with $20 billion in assets, is using data-driven insights to fuel the next phase of its digital transformation.

Click here to access the poll results and learn more about how those banks are moving technology transformation forward in this special report.

Also included is a success checklist, questions that boards and leadership teams could ask to help strengthen their technology strategy.

Bank leaders should start by evaluating their organization’s strengths and how technology can align with strategy, advises Ron Shevlin, chief research officer at Cornerstone Advisors. “Stop thinking about technology adoption, and focus more on … the business opportunity,” he says. “Focus on the business results.”

An Inside Look At One Bank’s Digital Growth Planning

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By now, most bank leadership teams understand the importance of offering well-designed digital experiences. What we’ve found is often more elusive is knowing where to start when making a significant investment in digital.

One bank that recently grappled with this was Boston-based Berkshire Hills Bancorp, the $11.6 billion parent company of Berkshire Bank.

Executives wanted to digitally transform the bank and that success would only be achievable if they unified around a core set of goals and built a robust strategic plan for reaching them. This vision allowed teams to work toward individual milestones along the way.

We recently spoke with Lucia Bellomia, EVP and head of retail banking and CIO Jason White. They gave us an inside look at what went into developing the Berkshire BEST plan for transformation, and the factors they believe will lead to their successful digital growth.

The Berkshire leadership team started by recognizing that if the plan was going to truly transform the entire bank, they needed to gather input and feedback from every department. “Executives spoke to stakeholders in every department to what milestones the bank would need to hit and what it would take to achieve those goals”, says Bellomia. They also formed groups specifically to achieve some of the components of that milestone.

Involving this many additional stakeholders extended the strategic planning phase — In Berkshire’s case, it took three months of meetings. But White felt the time spent laying a foundation of transparency and open communication will help the bank execute and fulfill the objective of the transformation.

Without some clearly defined pillars outlining your main goals, the whole process of starting the institution’s digital plan can feel chaotic and messy. White suggests that banks first investigate what it means for their institution to digitally transform, and then define the core strategic pillars from there.

Berkshire’s three core pillars were: optimize, digitize and enhance. These pillars support efforts to improve the customer experience, deliver profitable growth, enhance stakeholder value, and strengthen their community impact. Taking the time to first define core pillars that support a larger strategic plan helped Berkshire Bank recognize even greater opportunities. Rather than simply adding new digital services to their banking stack, they realized they could facilitate the evolution of their entire bank.

With the plan announced and in place, Berkshire launched into the execution phase of its transformation. Here, they were met with new challenges that required thoughtful commitments from leadership and investments in project infrastructure. One impactful early investment was developing a transformation office that was responsible for measuring, monitoring and communicating the success of the plan. Executives and sponsors worked with the office to define both date and monetary milestones.

A dedicated internal resource focused on project management helped Berkshire communicate the progress made toward each milestone through regular meetings, tracked and updated key performance indicators, and other updates.

Equally important to the success of Berkshire’s transformation plan was its commitment to scrutinizing each investment and vendor to ensure the right fit and an acceptable return on investment for the bank. The bank is a “low-code” development team with limited resources and used achievable digital goals to identify and select vendors to digitize, according to the bank’s plan.

As part of its transformation plan, the bank extended its existing fintech relationship to include digital banking platforms for consumer and small business customers. This allows the bank to innovate and digitize at an accelerated pace, without having to grow internal developer resources.

Ultimately, institutions like Berkshire Bank are realizing that developing a successful plan for digital transformation that works for both internal stakeholders and customers requires a rethinking of the way executive teams gather feedback, address challenges across departments, and monitor the success of a project.