Digitization: Digital-first, customer-centric banking

Modernize to survive and thrive as a future-ready bank.

The banking industry faces several challenges due to recent economic, geopolitical and regulatory developments. KPMG has identified the top 10 issues facing banks in 2022 and beyond, and in this article we examine the topic of accelerating digitization.

Survive and thrive

Digital-first banking requires a surgical approach to modernizing everything – from business and operating models to the core banking platforms. There can be no let-up in banks’ investment for the future through modernization of their core platforms and making their infrastructure ready for the furious pace of change and competition.

Such a strategy is fundamental to a digital-first, customer-centric bank that leverages an ecosystem that enables agility and accelerated innovation. The reality is that the marketplace is a competitive chess board. Any company—not just banks—with the technical ability to grow, manage, and move consumer money, is competing for market share. Non-banks and fintechs are aggressively going after the traditional banking customer – at a time when there is zero cost to switching.  

Many of these new competitors are not weighed down with the same business and technical debt as banks. It is no wonder that consumers are actively engaging with businesses that are furthest ahead in their digital journey. Banks have a great opportunity to respond to this challenge by modernizing their core infrastructure, enabling them to thrive as a future-ready, customer-centric bank.

Taking Action in 2022 – Digital Transformation

Click on each section below for actionable steps you can take now

Fortify the foundation

Modernizing an entire bank may seem overwhelming. However, banks that begin with the foundational elements can realize the greatest return on investment.

Core modernization is a method to unlock product innovation, speed-to-delivery processes, real-time processing and other important aspects of customer needs.

But the challenges ahead involve much more than just updating technology. The tasks to be met head on impact the entire enterprise – from strategy, to people, to culture. They include everything from the business model down to the operating model – efficiently uniting front, middle, and back office to deliver consistent experiences.

Build an integrated ecosystem

The key architectural principle of a technology ecosystem that enables agility, is “composabilty,” which means each service component functions as automatically as possible so that it can function on its own with a given input. But, the architecture of a technical ecosystem is only one part of being nimble—and it’s the easier part. The more difficult challenge is having a horizontally integrated team, rather than a daisy chain of work done in a series, such as design to development, to testing, to security, to operations.

Exceed customer expectations at every turn

All banks are facing massive, multiple core modernization and digital transformation efforts, but those that make every business decision with the customer in mind will thrive. Arguably, those that have embraced the digital agenda will be able to meet rising client demands, delivering a positive customer experience across multichannel products and services. They will know their customers’ pain points – and how to solve them. They will have a deeper understanding of where, when, and how a customer wants to interact with their bank.

Shifting to a higher gear
Download the full report to learn about all of the key issues impacting banks in 2022 and beyond

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Celeste Diana

Celeste Diana

Principal, Corporate Strategy, KPMG US

+1 516-456-1863