Banking Modernization: 5 Considerations for Digital-First CEOs

Gone are the days when CEOs could make technology secondary. Staying competitive and relevant in the banking industry relies on one thing: Be digital. 

According to the William Mills Agency report Bankers as Buyers, 38% of bank executives see opportunities to transform the customer experience by exploring emerging technology. If you’re a CEO in that 38%, then your digital-first mindset puts you ahead of about 60% of your competitors.

At Core10, we’re privileged to work alongside many bank CEOs who’ve shared with us how they plan to achieve their two main goals:

1. growing the business; and

2. satisfying customers.

Let’s take a look at the five things digital-first banks consider when building their business strategy.

Top 5 CEO Considerations in Banking Modernization

#1: Customer Experience

Is your current customer experience driving away business? Providing an exceptional customer experience is paramount in the digital-first banking world. CEOs need to prioritize seamless, user-friendly interfaces; personalized services; and quick response times. 

We’ve had many banking clients approach us about their manual loan application and origination process that left both bank employees and borrowers frustrated. Manual processes that require employees to re-key data and customers to re-enter their information creates major headaches, dragging out the loan process. These headaches are avoidable by using technology to connect systems, automate processes, and digitize data.

#2: Innovation and Technology

Staying at the forefront of technological advancements and innovation is crucial for digital-first banking CEOs. Investing in technology can enhance operational efficiency, security, and data analytics. Look at cutting-edge solutions such as API integrations, digital lending, account opening solutions, and more. 

What does modernizing your bank tech stack mean? 

It means finding solutions that allow integration between your bank's core and key tools. Imagine a world where your loan origination system, digital banking platform, treasury management tool, and CRM all work together.

Technology Solutions to Consider

• Core10’s Accrue: Accrue makes digital transformation easy with turnkey deposit account opening and digital lending for commercial and consumer customers. 

• Core10’s Mesh: Mesh allows banks to connect their technology partners to the core and streamline banking. This platform enables banks to manage integrations in one secure location, unlocking new possibilities for innovation and growth. 

• BaaS Opportunities: This is another way banks can drive deposits and promote growth to serve their customers. BaaS functionality allows non-bank companies to offer financial products and services to their customers using the infrastructure of a licensed bank. Banks can take advantage of these opportunities in two ways:

• Affinity Play. Appeal to customers who are members of a specific, like-minded population.

• Functionality Play. Banks can take advantage of a specific function of a fintech product that their customers want or need, such as buy-now, pay-later. 

Investing in Technology: CapEx vs. OpEx

Implementing new technology is expensive. This is why many banking executives shy away from making dramatic changes to their products and processes. It is critical, however, to invest in software development, product development, and application modernization to keep your competitive edge. 

Utilizing CapEx-style (lump-sum) payments can put restraints on what you’re able to afford. OpEx-style payment (over-time resourcing) allows more flexibility to stretch budgets and get the technology your bank needs.   

#3: Data Privacy and Security

In today’s digitally driven world, no one can be too cautious when it comes to protecting their personal information. Protecting customer data with robust cybersecurity measures should be a top priority for digital-first banking CEOs. Building and keeping your customers’ trust is vital to the success of your bank’s digital transformation. 

#4: Regulatory Compliance

Compliance with applicable laws, regulations, and industry standards is essential in the digital-first banking landscape. CEOs need to stay up-to-date on evolving regulatory requirements—like the recent 1071 rule—to ensure that their digital banking platform and operations are compliant. There are serious consequences for not following relevant regulations such as anti-money laundering (AML), know-your-customer (KYC), and consumer protection laws.

#5: Managing Risk and Securing Business Continuity

As CEO, your role is to make smart business decisions that reduce risk and support business continuity. It’s important to understand what each tech partner brings to the table. For example, a lack of open API access and ownership of data or tech stacks may cause interruptions to business continuity, which opens the bank up to greater risk. Having a thorough sense of what technologies and strategies are beneficial for your bank is crucial to its success. 

The CEOs we see leading business modernization strategies for their organizations have specific characteristics that translate into successful opportunities. 

CEOs at digital-first banks are:

• Excited by change—not threatened by it.

• Curious and creative in finding opportunities and solutions.

• Willing to take calculated risks to outperform their competition.

• Mindful of risk, compliance, and business continuity.

Embodying these traits as you form relationships with several tech partners can help you manage risk and maintain continuity for employees and customers. 

Banking Modernization With Mesh

We understand the challenges facing bank CEOs. And we’ve worked with many bank executives to help them digitally transform their products and processes. With Mesh solutions, you can provide your customers with the digital banking solutions they want. 

Mesh solutions allow your bank to:

• Integrate technology. Limit reliance on your core by integrating best-of-class technology vendors into a single platform.

• Leverage data. Use data to automate business processes, meet regulatory compliance, and add new revenue opportunities.

• Manage risk. Understand and manage risk with automated reports and real-time monitoring.

• Add revenue. Add new revenue streams with APIs and open banking by adding new products to your suite of services.

• Improve efficiency. Streamline operations and reduce the need for added hires. 

3 Ways Mesh Can Help

1. Banking-as-a-Service (BaaS)
   Mesh allows your bank to expand BaaS technology stacks quickly and easily by offering integrations between the core and non-bank technology partners. As a result, your customized products are on the market sooner to increase the number of customers and BaaS-related revenue.

2. Automation and Risk Management
   With Mesh, you can automate previously manual processes by securely sharing data across systems. With a single connection to the core via Mesh, you reduce the risk brought on by multiple connections and streamline time-to-market.

3. Sponsor Bank
   Your bank can provide fintechs with an open and robust data model with Mesh. This allows your partners to accelerate integration to your banking core and increases bank deposits and customer reach. 

Mesh provides a ​​modern, flexible infrastructure platform for your digital banking and integration needs. If you’re ready to create a digital-first banking experience for your customers, let’s talk about your innovative business strategy. Contact us to learn more.