Digital transformation isn’t just about technology—it’s a mindset. Alkami’s 2024 Business Banking Digital Maturity Model research reveals that the most mature institutions with a digital-first culture achieve 10x higher average yearly revenue growth compared to peers still mired in legacy thinking (& technology).
It’s about rethinking processes and challenging legacy norms. Legacy posture can hold institutions back, even those with advanced business banking solutions. It stifles innovation, delays decision-making, and prevents organizations from capitalizing on emerging trends. To overcome this, banks and credit unions should:
Financial institutions that lead in digital maturity prioritize a culture that values adaptability and continuous improvement. They ask themselves critical questions: Are we clinging to outdated processes? Is our organizational mindset equipped to adapt to disruption and seize opportunities? The answer to these questions is often the difference between success and stagnation.
Transformation begins at the top. Leaders must articulate a clear vision for digital innovation, align it with business goals, and champion cultural change across the organization. Institutions can benefit from encouraging a test-and-learn environment. This might involve shifting from traditional hierarchies to agile, cross-functional teams. According to an article in the MIT Sloan Management Review, to effectively transform an organization, leaders must embrace these four capabilities:
The most mature financial institutions are not afraid to move quickly. Once leaders make a decision, they do so with conviction and execute with speed, worried more about getting to market efficiently than meticulously being perfect.
"61% of the most digitally mature organizations tend to make decisions and move quickly in their execution."
Alkami’s Business Banking Digital Maturity Model, 2024
Collaboration is the foundation of innovation, but many financial institutions are hindered by siloed departments that limit the flow of information, ideas, and data. Research shows that collaborative organizations are 5x more likely to be high-performing in creativity and innovation. Breaking down silos involves creating cross-functional teams, using cloud-based solutions and shared dashboards to enhance transparency, and scheduling regular interdepartmental meetings to align priorities and measure performance. By fostering collaboration, institutions can deliver seamless business experiences while unlocking the collective potential of their teams – further empowering their employees.
"70% of the most digitally mature organizations empower relationship managers to leverage account activity data in client meetings. Meanwhile, approximately 11% of the least mature organizations activate the same dataset among client-facing teams."
Alkami’s Business Banking Digital Maturity Model, 2024
A transformational mindset prioritizes the end user. Leveraging predictive AI and real-time data insights, financial institutions can anticipate business account holders’ needs and deliver personalized services – building loyalty and trust and enhancing satisfaction. By prioritizing the business users’ experience, institutions can create deeper connections with their business account holders, positioning themselves as indispensable financial partners.
Effective transformation requires strong leadership to guide and inspire teams. Leaders must be equipped to communicate a clear vision, align teams with organizational goals, and navigate the complexities of change management. Leadership training focused on fostering innovation, collaboration, adaptability, and problem-solving ensures leaders can model the behaviors needed to be true champions of change. Empower leaders with the tools and confidence to create a supportive environment where every employee feels connected to the vision and inspired to achieve the institution’s strategic goals.
Upskilling employees in areas like data analytics, artificial intelligence (AI), and personalized service is critical. Leaders should also prioritize recruitment of talent with diverse, non-banking experiences to inject fresh perspectives. Building a culture of continuous learning and inclusivity not only equips teams with new skills but also empowers them to proactively contribute to the organization’s growth and build their career with the institution.
Innovation thrives where test-and-learn environments are celebrated, and institutions that experiment with emerging technologies often realize their return. Allocating budgets for pilot projects, rewarding innovative ideas, and fostering a “fail fast” mindset enables organizations to explore new frontiers with agility.
“When embracing a digital mindset and culture, organizations should keep the following in mind:
Alkami’s Business Banking Digital Maturity Model, 2024
Investments in business banking solutions are only the beginning. Institutions who are less digitally mature should ensure they fill gaps before they open themselves to falling further behind on the innovation curve. Once expected business capabilities are implemented, it is up to the institution’s leadership to ensure their workforce has adopted the technology and actively champion it with their account holders – using it in business client meetings, whether in-branch or online.
Imagine the growth an institution could achieve if they armed their relationship managers with account data that allowed them to have more thoughtful conversations with business clients and enable them to position new products and services that anticipated needs. The path to success is a data-informed digital banker backed by an organizational mindset that moves quickly, considers megabanks their primary competitor, and is open-minded.
Executives, the question is no longer if your institution will adopt a digital-first mindset, but how quickly you can make it happen. Tap into the knowledge of industry leaders and influencers to unlock insightful strategies that will align your culture with the evolving demands and expectations of businesses.
Financial institutions must acknowledge that transformation is an ongoing journey. The next wave of digital disruption will likely involve advanced AI, embedded banking, and decentralized finance. To stay ahead, institutions should embrace an entrepreneurial mindset, invest in their employees’ experience, experiment with new technology, and act decisively when opportunities arise.
