Many banks and credit unions are in a state of digital fatigue. 

Over the last decade, the desire to become a technology-driven business resulted in dramatic increases in IT spend. While the industry’s biggest names

announced multi-billion dollar modernization efforts, even smaller institutions invested heavily in their own transformation strategies. And it’s not stopping.
Overall, IT spending in the sector was expected to grow 8.1% in 2023 to $652 billion,

according to Gartner.   

For many, a large portion of those increased budgets was spent on software. The growth of so-called “best of breed” tools available under an “as-a-service” model allowed both large and small financial institutions (FIs) alike to more quickly take advantage
of new innovations in digital banking, helping many to delight customers and capture more business. For example, during the pandemic, smaller FIs with larger IT budgets reported a greater increase in loan growth,

according to the Federal Deposit Insurance Corporation.  

But it also injected increased complexity into those technology environments – much of which is now undermining the intended benefits of the digital overhauls. Today, institutions are relying on tens if not hundreds of different systems, sometimes multiple
for the very same function. What started as a dedicated effort to ingrain technology deeper into the business instead resulted in the proliferation of competing systems that, in many cases, have little to no connection with the rest of the IT portfolio. 

Instead of operating more efficiently, employees are spending a big chunk of their workdays switching between different applications. And instead of bringing data together from all those systems to help improve operations, the information is trapped. Now,
as banks and credit unions look to take advantage of the AI boom to automate workflows and drive personalized interactions with customers, among other use cases, they are struggling to actually take stock of all the data they have and use it to create a competitive
advantage. 

Meanwhile, after being wooed by the promise of new digital tools, customers are increasingly forced to chase information across many interfaces, leading to fatigue and, in worst cases, a switch to a new bank or credit union. In the rush to modernize, banks
and credit unions overlooked the critical step of building the right foundation to serve as the connection center for all the different software points.

For FIs to truly future-proof their operations, they need to invest in a comprehensive digital platform that will allow them to still take advantage of point solutions, while also ensuring a connected experience for employees and customers. 

Think and Build Modularly 

When thinking about building a technology environment that will last the next decade, banks and credit unions should think modularly. 

With the right foundation, it becomes much easier for FIs to layer on new software tools without compromising the overall design or functionality of the rest of the IT stack. It’s like building a house room by room over several years with the confidence
that, once construction is completed, the finished product will still look and feel like it was designed that way from the start.

System of Engagement. System of Integration. System of Core Banking.

Under such a model, enterprises have greater control over their IT portfolios, helping to ultimately lower the overall cost of running the software. That’s key, as 85% of CIOs report greater pressure to produce a return on tech investments,

according to an industry study. Likewise, it will also enable organizations to more freely take advantage of both open source and proprietary software.

While a vital layer, a single digital banking platform will never be able to independently address every need a business has. It’s why point solutions, which often lead the way on innovation, aren’t going away. And FIs looking to be on technology’s bleeding
edge will want to still be able to easily and quickly deploy the latest best-of-breed tools, ideally within an engagement banking platform that also provides a robust marketplace of best-of-breed fintech offerings with deep, specialized capabilities.

With the right platform, those new applications become additive, as opposed to the legacy days when new systems would often create yet another operational silo to address. 

The Seamless Experience

That integration is vital, as it’s key to a bank’s ability to deliver the experience that customers are expecting. 

Today, members demand seamless interactions with their financial services partner over their medium of choice, which increasingly is through a digital application.
And every disruption they face is a lost opportunity and a possible opening for a competitor to pounce. 

For example, onboarding is a common place where banks and credit unions fail to secure new customers. And where they do, studies have shown a surprising percentage of new accounts don’t always survive beyond three months. The process is often clunky. Typically,
the customer is forced to use many different systems. And they must wait for documents and other materials to be physically mailed to their residence. 

The right platform can automate many of the common onboarding steps, making it far easier and faster for members to get their new accounts online. And with a connected IT foundation, a digital banking application can even generate a virtual credit or debit
card while the physical one is in transit and enable customers to immediately deposit funds into their account. 

Or take loan processing. Many interested applicants are overwhelmed by the amount of information that must be submitted. With an integrated IT stack, many of the common forms can be filled in automatically with information already available in the customer
profile, lowering the barrier to entry for those seeking a loan.  

And all of these can be seamlessly integrated with core servicing platforms in the exceptional case that a digital journey gets pivoted to a call center or branch.

The days of status quo are over. With the rise of AI, FIs are under more pressure than ever to take advantage of modern IT tools. And companies risk getting lost in the chaos. 

However, with the right technology foundation, companies can build a future-proof system that will allow them to balance the mandate for speed, efficiency and lower costs with the desire to take advantage of new innovations as they come to market – and thrill
their clients and members in the process.

• SEO Powered Content & PR Distribution. Get Amplified Today.
• PlatoData.Network Vertical Generative Ai. Empower Yourself. Access Here.
• PlatoAiStream. Web3 Intelligence. Knowledge Amplified. Access Here.
• PlatoESG. Carbon, CleanTech, Energy, Environment, Solar, Waste Management. Access Here.
• PlatoHealth. Biotech and Clinical Trials Intelligence. Access Here.
• Source: https://www.finextra.com/blogposting/25808/the-answer-for-finservs-digital-fatigue-the-right-it-platform?utm_medium=rssfinextra&utm_source=finextrablogs