The majority of traditional banks agree that the time for digital transformation is now. There’s an abundance of evidence that this change is urgent, and banks must act immediately in order to stay relevant in the financial market.

However, the key questions remain: how can banks actually enact the necessary changes? And how can they do so quickly in order to compete with the challengers?

The answer – A one-platform approach.

But what does this entail, and how can platforms help your bank improve its odds of success for digital transformation?

Embracing a platform model

Here’s your reality check: the traditional incumbent approach will never work for your bank in this new era of engagement banking. Society is moving towards a single platform model in order to orchestrate value with streamlined and seamless customer journeys. From Uber to Spotify, platforms are revolutionizing the way we commute, listen to music, and more. Banks need to adapt to take advantage of the possibilities offered by this innovative model.

There’re many benefits to this approach – a robust return on investment, faster onboarding, increased upsell and share of wallet, improved conversions, lower cost to service, and the list goes on. You’ll even empower your employees in the process, increasing efficiency and job satisfaction.

And, as it stands now, platforms are the only viable way for banks to fight back against neobanks and big tech players.

A one-platform approach puts banks on a similar level to those at the top, who are popping up around the world and utilizing the platform approach from day one. They have a clean slate, unlike traditional banks, which struggle with legacy code and infrastructure, alongside outdated methodologies. This freedom gives these competitors the opportunity to create exceptional customer journeys without friction, all at one-third of the usual cost.

But how can your bank compete with the major players? Well, it’s all about the single platform model and owning the engagement layer.

The start of transformation success of your bank

With such a complex process, it may seem impossible to find a starting point. There’s no easy solution for banks looking to make the jump to a single-platform model. And the process can be quite disruptive, but banks looking towards the future understand the value of the approach and commit to the platform vision.

Despite the complexity, here are a few recommendations that can help:

1.  Banks should consider the customer’s point of view. Ask yourself where are the biggest pain points and the most friction? Be realistic about the things that are frustrating, unintuitive, or outdated. Also, anticipate customer needs and think about what new features and services you’d like to see. Are there any major gaps? If you can put yourself in the role of the user, you’ll make great strides towards creating an improved solution.

2. Conduct an internal fitness analysis: what systems do you have? Can you rely on them? And if not, how can you best address these shortcomings to create a seamless customer experience? This step can be quite painful for traditional banks, as many things will have to be updated or tossed out. But once your bank has done this, you can start thinking about how to go about enacting the platform model. 

When creating a platform, should banks custom-build everything, or buy everything out-of-the-box? Well, that depends on the bank, but let’s consider a few approaches.

Build, Buy, and Accelerated Build

Creating a platform is all about breaking down silos and removing friction. If you have layers that don’t communicate or a decades-old infrastructure that you’ve stacked tech on top of, it’s time to change. Incremental changes won’t cut it; you have to start over.

But that doesn’t mean you have to lose everything you have worked on. The ideal technology partner in this journey will allow you to adopt new tech, extend your existing systems, and build new solutions for an improved customer experience.

When it comes to constructing a platform, banks traditionally consider two main options: build or buy. However, a hybrid option of the two, which we call accelerated build, is also a viable solution and our personal recommendation for releasing with speed, flexibility, and customizability.

Here’s the accelerated build approach in a nutshell: first, buy an out-of-the-box platform backbone, with pre-made journeys to get you to market quickly. Once you’ve launched, build or buy additional solutions to fill in the gaps in the platform. Finally, start optimizing the existing journeys, replacing what you need, and extending what already works in order to further differentiate yourself from competitors.

When properly executed, the accelerated build will give you the best of both worlds: a speedy release with minimal risk and cost, plus a high degree of flexibility.

Most importantly, you’ll have constructed an engaging solution with a single value proposition: creating value for customers on a seamless, scalable, platform that orchestrates value across all touchpoints. And that’s the only way forward in these changing financial times.

The Journey to True Digital Transformation

Traditional banks have a long journey ahead of them in order to attain true digital transformation. The challenge may seem complicated, but platforms give them a real shot at competing with the challengers. But banks have to act now.

Think long-term and start making incremental changes. Set some goals for three years out and decide, step-by-step, how you plan to achieve them. Be realistic about which elements are working for your bank and which ones aren’t. Figure out the best way forward for your bank and its unique needs.

Above all, consider customer engagement in every facet of your operation and proactively strive to meet their needs and provide value at every touchpoint and every step of their financial life cycle. It’s a complex process, but the benefits are vast, and traditional banks can’t afford to wait much longer. Start prioritizing engagement today and you’ll increase your odds of success for digital transformation in massive leaps and bounds