Alkami Releases Research to Measure Digital Maturity in Financial Institutions
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The findings of this study are critical for understanding the competitive landscape of financial institutions. It becomes evident that digital maturity is not a function of size but rather a strategic focus on technology and user experience. This insight challenges the traditional notion that larger organizations naturally have better digital capabilities due to greater resources. Instead, it highlights that any institution, regardless of size, can achieve significant revenue growth by prioritizing digital innovation.
For stakeholders, this suggests that evaluating investments in financial institutions should go beyond asset size and consider the digital maturity level. This metric could be a more accurate predictor of future revenue growth and market competitiveness. Therefore, the report could influence investment decisions and strategic partnerships within the industry.
The correlation between digital maturity and revenue growth is particularly noteworthy. Financial institutions that have embraced digital transformation are seeing up to twice the annual revenue growth of their less advanced peers. This serves as a quantifiable metric for investors to assess the potential for growth and profitability in financial stocks. The emphasis on modern data technology and talent sourcing also implies that institutions are recognizing the value of cross-industry innovation and skills, which can be crucial for long-term success.
From a financial perspective, the study suggests that institutions with high digital maturity could be more resilient and adaptable in the face of market changes, which could lead to more stable and predictable financial performance over time.
The report indicates that there is significant room for growth in the digital banking sector, even among the most digitally mature institutions. The fact that only a quarter of such institutions offer a 5-minute online account opening experience reflects the untapped potential for enhancing customer experience. This gap in user experience presents an opportunity for banks and credit unions to differentiate themselves and capture market share.
Moreover, the struggle to automate back-office processes suggests that there is considerable scope for operational efficiency gains. Institutions that can effectively leverage technology to streamline operations are likely to see cost savings and improved service levels, which can be a competitive advantage in attracting and retaining account holders.
- Report examines levels of digital maturity across financial institutions, with the most advanced institutions reporting up to twice the annual revenue growth as the least advanced
- Research reveals that digital banking sophistication is not solely determined by size; one quarter of institutions excelling digitally have less than
$500 million
Some of the study's key highlights include:
- Digital maturity is linked to revenue growth, with the most advanced institutions reporting up to twice the annual revenue growth as the least advanced. These digitally mature institutions have fully deployed modern data technology, are more likely to source talent from outside the financial services sector, and prioritize investments to improve the account holder experience.
- Organization size does not solely determine digital maturity. One-quarter of financial institutions excelling digitally have less than
$500 million $5 billion - Even among the most digitally mature in the study, there is room to raise the bar. For instance, while digital account opening is offered by the majority of the most advanced institutions, only one quarter of them provide a 5-minute online account opening experience for new account holders and half are struggling to automate critical back-office processes.
"The banking sector faces a transformative challenge: to adapt, innovate and thrive in an increasingly digital landscape," said Jim Marous, owner and CEO of the Digital Banking Report. "Digital experience is now closely tied to a bank or credit union's brand. Our hope is that the insights in this report spur productive conversations in the industry and enable financial institutions to not only react more quickly to digital change but also proactively leapfrog account holder expectations."
"US financial institutions are currently operating in the most competitive market they have faced in years, forcing banks and credit unions to raise their game to drive deposits and account holder engagement. This means that the preferred way consumers choose to bank, the digital banking channel, must evolve from the service channel it primarily is today to the digital sales and service channel that account holders and financial institutions need and deserve," said Allison Cerra, chief marketing officer at Alkami. "We are proud to offer the market this comprehensive benchmark to understand the key differences separating segments when it comes to prioritizing and implementing digital strategies."
To download the report, click here.
About Alkami
Alkami Technology, Inc. is a leading cloud-based digital banking solutions provider for financial institutions in
Media Relations Contacts
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alkami@fullyvested.com
Marla Pieton
marla.pieton@alkami.com
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SOURCE Alkami Technology, Inc.
FAQ
How is digital maturity linked to revenue growth according to the report?
What determines digital maturity in financial institutions?
What is the Alkami Digital Sales & Service Maturity Model based on?
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What is one area where even the most digitally mature institutions have room for improvement?
