December 21 – The major online and mobile banking replacement cycle that began in 2016 will gain significant momentum in 2017 as more financial institutions seek to stabilize and grow customer bases through an advanced, comprehensive digital banking strategy. This is the prediction of D3 Banking, the leading innovator in data driven digital banking.
A Gartner report Digital Disrupters and Customer Demand Force Bank CIOs to Find New Sources of Innovation details the forces at work creating this momentum. D3 Banking has seen evidence that supports this trend within its regional and midsized bank customers in North America. Over the last 12 months, the company has completed two of the largest digital banking replacement projects in recent history, involving the migration of more than one million digital end users. In 2017, the company already has two projects underway that will move an additional 1.2 million users onto its platform.
Mark Vipond, CEO of D3 Banking, explained, “Multibillion-dollar banks such as Arvest, First Tennessee Bank and IBERIABANK have recognized the challenges associated with using disparate digital systems. In response, they have replaced their legacy products with a strategic digital platform that will give them a competitive advantage for years to come. Other institutions will follow their lead in 2017 as customers continue to expect Amazon-like digital services from their institutions.”
During the replacement of aging online and mobile banking solutions several themes will emerge including:
• One step at a time. Banks and credit unions will begin their digital transformations with a multi-step approach, replacing disparate systems one channel at a time as existing mobile and online systems’ contracts expire and/or as budgets that support modernization become available. Most institutions will prefer this staged approach as it is typically more manageable and less risky.
• Anticipation, not personalization. Simply personalizing customer offers will not be good enough; instead, financial institutions will implement technology to correctly anticipate consumers’ needs. By identifying what consumers need before they realize those needs themselves, banks and credit unions will add value to the overall customer relationship.
• The return of the Jedi. Research in 2016 indicated that customer satisfaction with the digital experience at regional and mid-sized banks was lower than that recorded at the largest financial institutions in the United States. However, recent scandals at national banks may provide an opportunity for regional and mid-sized institutions with an advanced long term digital strategy to reclaim the lead in customer satisfaction. More regional players will leverage hosted and Software as a Service (SaaS) offerings that provide robust scalability and configurability to deliver cutting edge technology that differentiates their brand and provides an optimal user experience at affordable costs.
• The new digital core. The complex, legacy core processing software that anchors the operations of most financial institutions is not nimble enough to keep pace with an increasingly dynamic digital landscape. These inadequacies, paired with rising customer expectations for a superior digital experience, will result in a strategy based on deploying a digital core that insulates the consumer from limitations of legacy systems. This will also allow banks and credit unions to more quickly adjust to business changes and reduce overall risk.
“This digital revolution is creating one of the most dramatic and comprehensive changes in financial services recorded to date,” said Vipond. “Breaking past the first generation of siloed, disparate channels is profoundly shifting how consumers are able to interact with their financial institutions. This new year will be a very exciting time as more regional and midsized institutions take the necessary steps to deliver a consistent user experiences enriched by data and analytics about the individual customer. This will become the minimum requirement for all organizations that want to maintain a competitive advantage over the next decade or more.”
About D3 Banking
D3 Banking reduces the cost and complexity of digital banking by providing a scalable single platform solution for consumers and small businesses that can be accessed via laptop, smartphone, tablets and wearables. The company’s solutions provide a consistent, intuitive user experience in a highly configurable environment that allows banks and credit unions to leverage their brand positioning and respond to consumer needs quickly and without additional cost. By providing Data Driven Digital™ banking using a powerful, proven analytics engine, D3 Banking’s platform delivers value-added financial management tools to consumers and small businesses while providing financial institutions with the ability to use this information to personalize their product and service offerings. Learn more about the company at www.d3banking.com.