OBSERVATIONS FROM THE FINTECH SNARK TANK
Bank and credit union executives hold a loaded gun at their feet. The name on the weapon reads “Digital Transformation”. Banks believe that if they just provide new tools for yesterday’s industries, they will digitally transform their businesses.
The digital transformation is ubiquitous in banking
According to the What’s Going On in Banking 2022 study by Cornerstone Advisors, three quarters of banks and credit unions have launched a digital transformation initiative so far. Another 15% plan to develop a strategy for digital transformation in 2022.
How far are the banks with their digital transformation strategies?
Of those who started their initiative in 2021, 28% said they have already done half or more. And of those who launched their strategy in 2020, almost half (46%) are at least halfway through with their strategy.
These must be the fastest transformations in human history.
The effects of digital transformation are missing
Banks’ perceptions of how far they have come on their digital transformation journey do not match the impact they believe they have seen.
Unsurprisingly, banks that think they have only achieved 10% (or less) with their digital transformation strategy have little to show so far.
But about four in ten institutions that are a quarter out of their efforts say they have seen a “significant” (defined as an improvement of more than 10%) on credit productivity. That is a higher percentage than the banks that are halfway through their strategy stated.