The news: Digital transformation is a major component of banks’ and credit unions’ near-term strategies. A new report from the cloud-based digital banking provider Alkami Technology highlights five trends banks and credit unions should be aware of during their digital evolution.
The Trends Driving the Digital Banking Landscape report is based on a survey of executives at 152 banks and credit unions.
Key stats: The COVID-19 pandemic accelerated banks’ and credit unions’ focus on digital transformation strategies. But the report shows that many financial institutions (FIs) still have a long way to go before their digital upgrades are complete.
Five trends: Participants’ responses uncovered a series of themes in digital banking that can inform FIs’ short- and long-term plans for digital transformation.
1. Contactless and cashless payments and transactions are becoming the default: The shift has been underway for quite some time, but the pandemic sped up the move.
2. Major financial institutions are adopting cryptocurrency, albeit slowly: Banks are recognizing that digital currencies will continue to grow in popularity, and they are taking actions to become the bridge between the traditional banking world and the digital currency space.
3. Banks are competing with fintechs. Some are partnering: FIs are recognizing the impact that fintech companies are having on customers, and some feel that partnering with the companies will help keep them relevant.
4. Many opportunities lie in hyper-personalization: Customers are craving an emotional attachment to their FI and are demanding their banks get to know them on a personal level.
5. Data analysis can enhance customer experience: Consumer data protection is top of mind for FIs. But those that can balance security and analysis can tap into new ways to serve customers.
The big takeaway: The trends identified in the report are valuable to FIs looking to sharpen their digital strategies, but banks should keep these caveats in mind when addressing them.