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The state of digital banking is a story of fragmentation and technology that's often outdated or poorly integrated. Customer journeys are often suboptimal, and multiple layers of technological solutions often translate to problems like poor data hygiene, lack of regulatory compliance and missed opportunities. In addition, the use of legacy software can make it challenging to integrate up-to-date methods such as AI analytics solutions. However, demand on both the front and back ends for better digital services and more-efficient processes is driving banks to take on digital transformations that will help them stay competitive in an evolving technological landscape. Customers expect a frictionless, personalized and highly functional digital experience. To match strength with digital-native competitors, banks and lenders must transform how their organizations do business. What is digital transformation, and what does it mean for banks and lenders? A comprehensive digital transformation strategy is more than just investing in new digital tools. It's about rebuilding the structure and infrastructure of your business so that online and digital services and processes form the core of your competencies and offerings. Digital transformation is an ongoing journey rather than an end goal. It's a continuous process that iterates as you steadily improve and streamline operations and integrate new and improved technologies. One of the key aspects of digital transformation in banking is better gathering and leveraging of data. Banks, especially larger ones with a longer business history, possess large quantities of data that may be siloed or poorly utilized. By improving how they collect, analyze and make use of data, banks and financial institutions can enhance their decision-making abilities and engage with consumers in a more authentic, personalized way. Perhaps most important, digital transformation is customer-centric. While upgrading, merging and integrating back-end technologies and data solutions is a key component of the process, it's all done with the customer experience top of mind. Centralizing, streamlining and modernizing digital operations help to create a seamless, secure and highly targeted customer journey. The core pillars of digital transformation Multiple core pillars are involved in undergoing a successful digital transformation. Each of these should be integrated into a comprehensive strategy that considers the transformation as an integrated process, rather than a series of individual projects. In fact, one common error banks make when upgrading their digital infrastructure and offerings is failing to coordinate digital initiatives. A true digital transformation is holistic, resulting in apps, infrastructure, digital systems and customer experience platforms that are all part of one coherent, consistent approach. Data: Data is at the heart of digital transformation. It's through maximizing and optimizing usable data that financial institutions can truly make an impact on their ability to reach and connect with target consumers. Using data the right way means prioritizing security and privacy while taking advantage of opportunities to improve consumer targeting and engagement and personalization of offers. Analytics: Data can't do its job if it's not interpreted in a way that makes sense for your business. Quality analytics software and comprehensive analysis are what turn a set of disparate data points into usable information that informs smart decision-making and improves KPIs. Automation: Machine learning is improving by leaps and bounds, and it's only going to get more useful for businesses looking to increase the efficiency of their sales, marketing and engagement efforts. AI solutions are no longer a fringe tool but are quickly becoming part of the mainstream and a key component of digital strategies. Customers: With the array of digital tools available today, it's easy to lose sight of the main purpose of your business — connecting with people. Customers today expect digital engagement experiences that feel personalized and real, which is why a consistent, appealing digital customer journey should be top of mind in any digital transformation strategy. How can banks benefit? New, digitally native fintech solutions abound in the contemporary landscape. Overall, they tend to be highly competent when it comes to making the most of state-of-the-art tools like artificial intelligence, mobile apps and blockchain. By combining their brand longevity with a well-executed digital transformation, traditional banks can capitalize on their established reputations by reaching consumers with compelling offerings that utilize and are based on best-in-class digital tools and data analysis. Digital transformation in banking can have numerous benefits. For one, operations will be more streamlined. For another, enhanced security will make customers feel more secure while minimizing losses from fraud. In addition, integrating top-of-the-line data and analysis will result in better overall decision-making. The ultimate goal? Boosting lead generation and conversion rates and improving customer onboarding while reducing churn, thereby maximizing the efficiency of budget spend across multiple departments, from marketing to customer service. Get started with Experian Implementing a digital transformation that truly improves your business can be a daunting task, but it's achievable with the right partner. Experian's connectable and configurable solutions and technology can help drive your digital transformation. With offerings like our cloud platform solutions, you'll be well-positioned to move forward and take advantage of up-to-date technologies to serve your customers better. Learn more about how you can benefit from the digital transformation in banking. 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Americans swipe, tap or insert their debit and credit cards at supermarkets, gas stations, restaurants, hotels and ATMs, conducting more than 74 million daily transactions.¹ Despite the volume of transactions, just 23% of banking customers give their bank high marks for its range of products, services and financial advice.² A hyper-digital, ever-changing banking industry means that there are more choices for financial service providers than ever before — and customers are taking full advantage of the options. On average, consumers have more than six different financial products and 82% of consumers between the ages of 18 and 24 acquired financial services products from new providers in the past 12 months.² Digital transformation for banks is more crucial than ever, with some studies showing that 78% of bank customers prefer to access their accounts via a website or mobile app (with less than half of those surveyed ranking branch access as an important feature when shopping for a new checking account).³ Banks must embrace innovative strategies to elevate the banking customer experience in a competitive market. Here are some ways to boost customer retention and drive profitable growth. Rethink processes Complex processes and excessive paperwork needed to open accounts, approve credit cards and process loan applications can frustrate customers. In 2022, up to 60% of consumers said they would abandon the onboarding process to open a digital bank account if the process took longer than five minutes,4 which in turn, can lead to lost revenue.5 Digital transformation initiatives can resolve these issues to improve the customer experience. Banks that leverage solutions, like artificial intelligence and automated data-driven decisioning solutions, to facilitate faster, more streamlined services can reduce friction, expedite processes and decrease wait times, resulting in improved customer satisfaction and retention. Reduce fragmentation Financial services are more fragmented than ever. Retail banking customers often use different providers for their checking and savings accounts, credit cards, investments, mortgages and other banking products. The options to access those accounts are also diverse, with customers choosing from brick-and-mortar branches, websites and mobile devices. Increased fragmentation means that the need to create an omnichannel experience should be top of mind for lenders. One survey found that 70% of consumers rated a consistent experience across channels as “extremely important" or “very important" when selecting their primary bank.6 Additionally, the current retail banking landscape often fails to reward consumers for loyalty. Fewer than 15% of banks provide comprehensive rewards to those who use a single bank for multiple products or services, even though reducing fragmentation and taking a holistic approach to meeting customer needs can provide a competitive advantage.² Personalize the digital experience While digital banking has reduced face-to-face interaction between banks and customers,² consumers still expect a personalized banking experience. Their top demands for personalization tools are ones that can help them avoid fees and deliver automatic account alerts.7 Experian has shown that using data analytics can lead to an improved understanding of customer needs and preferences, while customer segmentation enables the creation of targeted marketing campaigns, customized product offerings and tailored financial advice. These efforts towards a more personalized banking experience help increase customer satisfaction and loyalty. Provide more touchpoints An increasing number of branch closures and greater demand for digital banking services mean that just 3% of banking transactions are conducted in person.² Customers are more willing to use digital channels for services like opening accounts and applying for loans.8 Banks can promote credit offers and product recommendations via email, social media and mobile banking applications while providing real-time digital customer experiences and prioritizing consistency across channels. Embracing a multichannel approach to marketing can help banks achieve better results, making it easier to cross-sell customers, amplify offers and meet consumer expectations for a personalized digital experience. Go beyond banking Experian research found that 80% of customers felt their relationships with financial institutions were “purely transactional," but the customer experience in banking is about more than deposits, withdrawals and interest payments. Customers want resources and information to improve their financial well-being — and providing it can build trust, improve customer retention and boost revenue. Although more than two-thirds of customers expect companies to understand their needs and expectations, just three in 10 banking customers felt their financial providers met their demands.9 Using digital channels to provide education might be more effective than encouraging appointments with customer service representatives, especially for the 29% of consumers who don't feel comfortable asking about financial products.10 These tactics can help you: Leverage artificial intelligence to provide educational resources and personalized financial advice. Monitor user transactions for unusual activities and push information about online security or fraud protection. Employ chatbots to provide investment information and credit score monitoring and respond to questions about products ranging from mortgages to credit cards. Enhance your customer retention strategies by focusing on credit education and helping customers at every stage of their financial lives. Foster a customer-centric culture Globally, banks have invested $124 billion in artificial intelligence, machine learning and other technologies to make retail banking services more efficient and effective.² Personalization is still imperative, and putting the customer first must remain the highest priority. For large, multichannel banks, a mere one-point improvement in the customer experience score can lead to an incremental $123 million in revenue; the same one-point increase in the customer experience score can generate $92 million in revenue for a direct bank.11 Achieving those results requires a solid strategy for an improved banking customer experience. Experian leverages customer-level analytics and provides comprehensive solutions to expand digital transformation efforts, drive acquisition and improve customer retention. To learn more about solutions, visit us online. 1Federal Reserve (2023). Commercial Automated Clearinghouse Transactions Processed by the Federal Reserve 2Accenture (2023). Global Banking Customer Study 3Forbes Advisor (2023). U.S. Consumer Banking Statistics 4Digital Banking Report (2022). Best Practices for Successful Digital Account Opening 5Abbyy (2022). State of Intelligent Automation Report, Customer Onboarding Pain Points and Drivers Q4-2022 6Deloitte Insights (2018). Accelerating digital transformation in banking 7D. Power (2022). U.S. Retail Banks Struggle to Differentiate, Deliver Meaningful Customer Experience as Economy Sours, J.D. Power Finds 8McKinsey & Company (2022). Best of both worlds: Balancing digital and physical channels in retail banking 9Experian (2022). Building customer loyalty through financial education 10Milken Institute (2021). Financial Literacy in the United States 11Forrester (2022). Who Does it Well and Why it Matters  

In a recent episode of the Used Car Dealer Podcast, host Zach Klempf, sat down with Jim Maguire, Experian’s senior director of product marketing for automotive, to discuss the prevalence of fraud in the automotive industry. During their conversation, Jim highlighted the findings in Experian’s 2023 Identity and Fraud Report, giving listeners a deeper understanding into the evolving dynamics of fraud, with data and insights on the current landscape and what actionable strategies dealers can take to prevent it. The episode is now available across all major podcast platforms, click the link below to watch: YouTube For more information on the Used Car Dealer Podcast, visit – https://www.sellyautomotive.com/podcast Facebook – @SellyAutomotive Twitter – @SellyAutomotive LinkedIn – @SellyAutomotive