Digital Maturity Series: How Digitally Mature is Your FI?

The relentless pace of technological advancement in financial services underscores the need for institutions to assess their digital readiness and adapt strategically beyond traditional digital banking solutions.

The digital revolution, characterized by the emergence of neobanks, the proliferation of artificial intelligence (AI) and machine learning, and a heightened focus on security and account holder experience, demands a new approach to banking. It’s a motion that recognizes the critical role of digital maturity in shaping the future of financial services.

The Alkami Digital Sales & Service Maturity Model Assessment, the first of its kind in the financial services industry and built exclusively for financial institutions, enables banks and credit unions to quickly and easily assess their digital maturity, and then arm them with tools to take action on their results. The foundation of the tool was taken from the Alkami Digital Sales & Service Maturity Model, which was developed based on recently released research conducted across 215 U.S. financial institutions with at least $200 million in assets.  

Why Understanding Digital Maturity Matters

Understanding digital maturity is essential for organizations navigating the rapidly evolving digital landscape, especially in the banking sector. As technology advances at an unprecedented rate, digital maturity plays a foundational role for banks and credit unions to stay competitive and meet the changing needs of their account holders. Digital maturity not only reflects an organization’s ability to adapt and leverage digital technologies, but also its readiness to embrace change, innovate, and deliver exceptional digital user experiences. By assessing digital maturity level, financial institutions can identify areas for improvement, strategize more effectively, and implement solutions that enhance efficiency, account holder satisfaction, and ultimately, their bottom line. This comprehension is crucial for plotting a course through the digital transformation journey, while executing on the following:

• Strategic Alignment: Knowing where you stand on the digital maturity scale helps align technological investments with business goals, ensuring that every digital initiative drives value and supports the institution’s strategic vision.
• Competitive Advantage: In a market defined by rapid change and innovation, understanding your digital maturity can highlight areas of strength and opportunities for differentiation, allowing you to carve out a competitive edge.
• Customer Expectations: As customer preferences shift towards digital-first interactions, assessing digital maturity ensures that your institution remains responsive and relevant, capable of delivering the personalized, seamless experiences that customers demand.
• Operational Efficiency: A clear view of your digital maturity can reveal opportunities for process optimization and automation, leading to cost savings, enhanced productivity, and improved service delivery.
• Risk Management: Finally, understanding digital maturity encompasses recognizing the importance of enhanced security measures in protecting customer data and maintaining trust in an increasingly digital world.

From digital beginners to pioneers, the digital maturity scale offers a nuanced framework for understanding an institution’s current position and plotting a course for growth.

The Digital Maturity Scale: A Strategic Compass

Digital maturity extends beyond the mere presence of digital banking solutions; it encompasses the depth, breadth, and sophistication of these offerings and how they are integrated into the overall account holder experience. It’s about how effectively a financial institution leverages technology to meet customer and member needs, streamline operations, and foster innovation. 

To gauge digital maturity, the assessment asks financial institutions to answer five questions that were found to be the most determinant in the research in measuring digital maturity across banks and credit unions. After completing the online assessment, financial institutions are categorized into one of four segments on Alkami’s digital maturity spectrum: Patiently Exploring, Innovation-Ready, Digital-Forward, and Data-First. The results provide actionable guidance on a path forward and where to focus business operations based on the bank or credit union’s segment. 

Here are the attributes of the 4 segments:

Patiently Exploring: Organizations in this stage are just beginning their digital journey and they rely heavily on third-party vendor solutions providers. They are starting to recognize the importance of digital channels for engaging with account holders but may not have fully committed resources or strategies in place. They have a customer-first relationship driven mindset and value high-touch in-person experiences. 

Innovation-Ready: At this stage, organizations have a foundational digital presence and are prepared to take more significant steps with investments into technology. They prioritize the user experience over advanced functionality, and are open to experimenting with new technologies to speed up their digital account opening process. 

Digital-Forward: Organizations in this segment have established a strong digital strategy and are actively leveraging technology to drive their business. They are focused on optimizing digital channels for sales and service. Digital-Forward institutions are characterized by their proactive approach to adopting new technologies and their commitment to enhancing the account holder journey through the user experience.

Data-First: The most advanced stage of digital maturity, Data-First organizations are characterized by their strategic use of data to drive decision-making, innovation, and personalized account holder engagements. They have fully integrated digital technologies across all aspects of their operations and leverage data analytics extensively to understand account holder behavior and identify new revenue opportunities. Digital transformation is a continuous process centered around leveraging data for competitive advantage.

“We are proud to provide this tool for growth-focused financial institutions to easily obtain data-backed insights reflecting where they fall in the market in terms of digital maturity and clear steps they can take to progress their digital banking offerings.”

-Allison Cerra, CMO at Alkami

The Path Forward: From Assessment to Action

The introduction of the short digital maturity assessment represents a critical step for financial institutions to receive quick and insightful analysis of where they fall on the digital maturity scale, offering tailored recommendations for growth and digital strategies to drive improvement. Whether it’s enhancing digital banking solutions, investing in AI for personalized services, using data for decision-making or strengthening digital account opening experiences, mobile and other digital channels, the tool aims to guide financial institutions on their journey towards digital excellence.

Achieving Digital Maturity Beyond Digital Banking Solutions

In the digital age, the success of financial institutions hinges on their ability to adapt, innovate, and grow in alignment with the digital maturity scale. By assessing their current standing and embracing the strategies needed to advance, banks and credit unions can not only meet the challenges of today’s digital landscape but also remain relevant and competitive to their account holders and non-account holders alike.