The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding digital transformation in banking. Opinions expressed in this article are of the individual authors and may not reflect the opinions of MeridianLink, Inc.
In the worlds of banking and lending, you’ve certainly heard that digital transformation and digital maturity are key drivers of growth and adaptation. While both ideas have their advantages, they can sometimes give off the vibe that there’s a finish line to cross—a single moment of achievement. However, the reality is that the financial landscape is ever evolving, and simply reaching a single planned end point can leave you vulnerable to new challenges.
It’s time to reframe the conversation.
At MeridianLink®, we’re engaging with our bank and credit union customers about digital progression—an approach that allows for continuous evolution and scalability. In this blog, we’ll unpack the nuances of digital transformation and digital maturity and show how digital progression can help your financial institution future-proof its business for sustained success.
Digital Transformation: A Means to an End?
At its core, digital transformation is a structured, project-based process aimed at achieving specific goals. And while these initiatives offer significant benefits, they are often perceived as finite projects with clear endpoints. This mindset can lead organizations to concentrate solely on completing defined objectives, potentially overlooking the need for ongoing adaptation and improvement.
For example, a financial institution may transform its paper-based lending process to a digital application with the goal of enhancing efficiency and improving borrower convenience. However, viewing this as a one-and-done technology project may not yield the desired long-term results. How will you evolve alongside market trends and consumer needs without a plan for regularly assessing performance, evaluating outcomes, and optimizing workflows?
Digital Maturity: The Final Stage?
Next up is digital maturity. This term implies that once an organization reaches a certain level of sophistication in its digital initiatives, it has successfully arrived at its destination. However, this perspective can be misleading.
Consider the recent fate of Redbox as a case in point. Initially, the company thrived by providing a convenient and low-cost alternative to traditional DVD rental stores, capitalizing on the DVD boom with its self-service kiosks. However, as streaming services surged in popularity and proved to be a sustainable business model, Redbox’s once-competitive offering began to stagnate. And while there was an attempt at introducing a streaming option, a lack of adaptability left them unable to keep pace with market changes, leading to their current struggles and impending closure.
This story illustrates how achieving digital maturity can create a false sense of security; without continuous evolution and a commitment to innovation, even mature organizations can falter in the face of new competition.
The Future Lies in Digital Progression
So, why should banks and credit unions focus on digital progression instead of just aiming for maturity or tackling one-time transformations? The answer lies in the power of ongoing innovation, adaptability to market changes, and the sustained competitive edge it offers. Financial institutions that embrace this mindset set themselves up for greater growth, improved consumer satisfaction, and a business model that’s not only robust today but also future proof against tomorrow’s challenges.
That’s where MeridianLink’s Digital Progression Model comes in. With 25 years of experience, deep expertise, and valuable customer insights, we help institutions assess their current digital state, identify growth opportunities, and create a tailored path to sustainable success.
What makes our Digital Progression Model unique is its tailored blueprint designed for each organization, targeting five key areas essential for digital growth: enhancing consumer experiences with digital tools, fostering a data-driven culture for informed decision-making, increasing the share of financial products among existing customers/members, speeding up decision-making processes, and streamlining operations through advanced automation. By focusing on these areas, financial institutions can develop a strategy that aligns with their specific goals and market conditions.
MeridianLink customers who prioritize digital progression have already experienced impressive results, including higher application completion rates, quicker loan processing times, and more instant approvals.
So, are you ready to take the next step?
Connect with us to discover how Digital Progression can help your financial institution innovate, grow, and secure its future.
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