4 charts on the state of digital transformation in banks
- Only 11 percent of banking executives plan to enhance mobile or omnichannel banking this year.
- Projects prioritized in the next 24 months, are more likely to be middle- and back-office focused, like building an enterprise-wide compliance architecture.
Digital transformation is one of the buzzwords causing a stir in the banking community. Many bank execs are leading the process of unifying digital strategy and operations, spanning from the front office to back office.
Digital transformation is seen as the way banks can ensure they serve their customers even during times of great changes in technology and customer expectations. Data shows, however, that bankers are still thinking of innovation in a very siloed and opportunistic way.
According to CSI’s 2016 banking priorities study, about 11 percent of banking executives plan to enhance mobile or omnichannel banking. 18 percent plan to incorporate new technology. Driving interest income and loan growth was seen as the greatest opportunity.
Most bankers will say their organization in engaged in digital transformation. Many banks, though, still manage their transformation as business-led “islands of innovation”, posing as digital transformation, while true business-wide transformation remains much rarer, according to a recently published IDC report.
Only a quarter of respondent banks in the IDC study are in the two highest maturity levels and are truly able to support the level of agility and innovation that the market demands.
North American banks are investing the most in digital transformation. One in five banks is investing more than a quarter of its IT budget in DX initiatives, which is three times greater than the next closest region.
Digital transformation usually starts with front office applications like mobile banking or other customer service initiatives. However, as banks progress in the digital transformation maturity journey, back and middle office initiatives get more focus. Projects prioritized in the next 24 months, according to the IDC study, are more likely to be middle- and back-office focused, like building an enterprise-wide compliance architecture.