OMAHA, Neb.–The major online and mobile banking replacement cycle that began in 2016 will gain significant momentum in 2017, according to a new analysis.
D3 Banking, a provider of data-driven digital banking solutions, over the last 12 months has completed two of the largest digital banking replacement projects in recent history, involving the migration of more than one million digital end users, the company said. In 2017, the company already has two projects underway that will move an additional 1.2 million users onto its platform, it reported.
The company is offering this forecast for what will take place as financial institutions replace aging online and mobile banking solutions:
- One step at a time. Banks and credit unions will begin their digital transformations with a multi-step approach, replacing disparate systems one channel at a time as existing mobile and online systems’ contracts expire and/or as budgets that support modernization become available, D3 Banking said. “Most institutions will prefer this staged approach as it is typically more manageable and less risky.”
- Anticipation, not personalization. “Simply personalizing consumer offers will not be good enough; instead, financial institutions will implement technology to correctly anticipate consumers’ needs,” D3 Banking said. “By identifying what consumers need before they realize those needs themselves, banks and credit unions will add value to the overall customer relationship.”
- The return of the Jedi. The company noted research has shown consumer satisfaction with the digital experience at regional and mid-sized institutions was lower than that recorded at the largest financial institutions, but said that scandals at national banks may now provide an opportunity for regional and mid-sized institutions with an advanced long-term digital strategy to “reclaim the lead in customer satisfaction.” It predicted more regional players will leverage hosted and Software as a Service (SaaS) offerings that provide robust scalability and configurability to deliver cutting edge technology that differentiates their brand and provides an optimal user experience at affordable costs.
- The new digital core. “The complex, legacy core processing software that anchors the operations of most financial institutions is not nimble enough to keep pace with an increasingly dynamic digital landscape,” said D3 Banking. “These inadequacies, paired with rising consumer expectations for a superior digital experience, will result in a strategy based on deploying a digital core that insulates the consumer from limitations of legacy systems. This will also allow banks and credit unions to more quickly adjust to business changes and reduce overall risk.”