8 Common Pitfalls of Digital Transformation

Banks often encounter common challenges when planning their next steps in digital transformation. We’ll not only explore these pitfalls but also share strategies to help you avoid them entirely.

A visually striking illustration of an ecosystem arranged in the bold shape of a numeral 8. The top loop features modern skyscrapers and sleek tech hubs with glowing digital accents, representing an interconnected business ecosystem. The design emphasizes collaboration and innovation between these sectors.

Hey y’all, Allan here (forgive the “y’all,” I’m in Austin).

To start, my perspective on digital transformation has been shaped by three key experiences in building fintechs and banks, as well as navigating the digital transformations that came with them. While we’ll delve into these experiences separately, here’s a summary:

• First Experience: Building an early-stage fintech in 2015 that provided a digital payments journey for small businesses in the U.S. The business allowed small business owners to outsource accounts receivable management and collections to our team, with payments structured and processed through a proprietary payments platform.

• Second Experience: Developing an end-to-end digital strategy for SBA loan origination at a major U.S. bank. This pre-COVID initiative aimed to create a fully digital SBA loan process, which was implemented within days of the PPP rollout in early 2020.

• Third Experience: Designing a digital strategy for a community bank following the acquisition of a bank charter in 2019. This “blank slate” bank, apart from its core banking technology, required a strategy to optimize its primary revenue source, deposit gathering, and fee generation.

From these experiences in crafting digital strategies, we gained insights from both successful revenue-generating initiatives and missteps that fell short. The following 8 pitfalls stood out:

1. Data Organization Issues: Disconnected data scattered across systems such as core banking, digital platforms, treasury, lending, and card transactions lacks proper centralization, hindering effective digital transformation.