This article first appeared in the May BAI Executive Report: Unlocking value through technology optimization. Find more articles within covering the tech decision-making spanning CX, fraud, core updates and more.
Fintechs are arguably rewriting the rules of banking, so it’s no surprise that 64% of bank executives see these disruptors as a significant threat over the coming decade. Their sleek, intuitive apps, hyper-personalized services and always-on marketing may be what customers see, but behind the scenes, it’s a modern, agile infrastructure that makes it all possible.
For your bank, the path to growth starts the same way: by looking at your digital strategy from the outside in. What kind of experience do you want to deliver? How can you remove friction, enhance engagement and meet customers where they are? Once that vision is clear, the next step is building the operational backbone and leveraging the right digital tools to bring it to life.
In a disrupted market, waiting isn’t an option. The banks that thrive will act swiftly and with intention. Here are five tips to help you start reflecting on modernizing your digital strategy—from the outside in.
Assess and optimize the full customer journey
The term “front-end experience” was once synonymous with in-person interactions, like those with your tellers and branch staff. But today, the front-end experience extends far beyond a physical desk. With most customers engaging through digital channels, it’s critical to assess how they interact across each of these touchpoints and uncover opportunities for improvement. The goal is to make it easier for them to do business with you and, in turn, make it easier for you to convert interest into tangible outcomes—such as new deposits and loans.
Start by evaluating your front-end experience. When a new customer applies for an account, how seamless is that process? Can they open both a deposit account and apply for a loan in one smooth interaction? Are there areas where drop-offs tend to occur? For existing customers applying for a loan, are you pre-filling their application with information you already have? Is the identity verification process both smooth and secure? From application to funding, how long does the process take?
By answering these questions, you can pinpoint key areas to prioritize on the back end to improve your front-end experience.
Strengthen data centricity for smarter decisions
Data is one of your bank’s most powerful assets. Yet, about 50% of banks say that their use of data to enhance the customer experience and their operational efficiency is ineffective. That sounds like a massive opportunity.
Having easy access to your data—whether it’s customer data, transaction history or data about your bank’s performance—and knowing how to leverage it at every level of your organization is critical for driving smarter decisions.
To maximize the impact of your data, start by identifying which data will have the most significant effect on your operations and customer experience. Look for patterns that reveal customer behaviors, such as account activity, loan application trends or service usage. Consider what data will help improve decision-making in key areas like credit underwriting, fraud detection and personalized marketing.
Once you’ve identified the most valuable data, the next step is ensuring you can easily access and use it. Modernization plays a key role here. By upgrading your technology infrastructure, you can break down data silos and create a unified platform that integrates data across both customer-facing and back-end systems. This makes it easier to collect, store and analyze data in real time, giving you actionable insights when you need them most.
Automate key processes to boost efficiency
Slow processes, manual workarounds and inefficiencies don’t just drain resources. They drive up costs, delay service and frustrate customers. But surprisingly, 30% of banks still report that robotic process automation (RPA) isn’t even on their radar. AI and machine learning to automate repetitive tasks is a powerful solution that can optimize both your customer-facing experiences and internal operations for speed, accuracy and scalability.
Take, for example, loan approvals, account openings and document verification. Employing automation to optimize these experiences can accelerate processing, deliver quicker decisions and improve overall customer satisfaction. When these front-end processes are simplified, it sets the stage for smoother workflows throughout your entire operation. Back-office tasks such as credit assessments, fraud detection and compliance checks become faster and more reliable. This not only reduces manual work and the risk of errors but also helps maintain compliance in an increasingly complex regulatory environment, all while freeing your team to focus on higher-value tasks.
Then, the savings and efficiencies you gain can be reinvested into creating innovative products and services that further elevate your customer offering.
Enable instant decisioning for faster, smarter responses
Did you know that fewer than 50% of financial institutions can fully handle their products digitally from start to finish? That’s an astonishing percentage. And even those with digital lending processes often face delays due to slow, fragmented systems. Timing is everything, and if your bank’s processes aren’t keeping up with customer needs, you’re already behind.
Instant decisioning is the linchpin, the culmination of the first three steps. You’ve optimized the customer journey, harnessed critical data and automated key processes. Now, it’s time to take it further with advanced analytics and intelligent decision logic to deliver faster, more precise approvals. This not only enhances the customer experience by reducing wait times and friction but also improves operational efficiency. Your team can process more applications, quickly identify those requiring extra review and capture opportunities before competitors can react.
The result? A bank that operates smarter, responds faster and builds stronger customer relationships.
Deepen customer relationships with proactive engagement
57% of customers will stay with their bank unless offered attractive incentives elsewhere. That may not sound concerning until you consider that competitors are offering those incentives. So, while attracting new customers (and new deposits) will always be important, retaining and maximizing the value of your existing customer base is even more critical for long-term growth.
Leveraging predictive analytics and prequalification can make a powerful impact on maintaining customer loyalty and driving growth. By analyzing application and credit data, you can proactively identify cross-sell opportunities for products such as vehicle loans, credit cards, personal loans and HELOCs. This insight helps you engage your customers with relevant offers that align with their financial needs, keeping them from looking elsewhere.
Parting shot: Think of end-to-end modernization
In a disrupted market, technology is only part of the equation. To stay ahead, you must embrace a holistic approach to modernization—one that connects the front-end customer experience with back-end efficiency, creating a seamless journey that positions your bank for sustained success.
Devesh Khare is Chief Product Officer at MeridianLink.
