How your bank can perform a journey-based progressive modernization

Introduction

As we explained in the previous blog, there are three main approaches for your bank’s progressive modernization journey: segment-based, journey-based, and headless. There’s no “one-size-fits-all” method here, as your bank’s ideal strategy will depend on a number of factors, including your bank’s needs, as well as its size and resources.

For now, let’s explore the journey-based approach so you can better understand what it is and why your bank might consider it.

What is the journey-based approach to progressive banking modernization?

Journey-based progressive modernization is all about picking a journey — like customer onboarding, for example — and then modernizing this process from front to back. That makes it more narrow in scope than the segment-based approach, but that also entails a host of benefits. For one thing, by working on a journey-by-journey basis, you’re making sure your bank’s work is closely connected to a clear business goal: to onboard more customers, more efficiently, in this case. And onboarding might be a great place to start, in fact, as research shows that superior, customer-centric onboarding journeys can result in a 40% higher conversion rate.

However, the best journey to begin with will, of course, be unique to your bank and its needs. It’s a targeted decision you should only make after performing a comprehensive impact scan of your bank’s most critical customer journeys. That will give you a health map that will provide the insights you need to proceed, as well as the revenue or cost impact of each journey. Be sure to analyze the points of greatest friction and also the areas that matter most to your customers.

Remember our advice about taking an outside-in approach. No one wants services pushed on them, regardless of how flashy and impressive they may be, so make sure to compile data-driven, customer-centric insights before you proceed with the actual modernization itself.

Why should I select a journey-based approach?

The journey-based approach is particularly compelling when it comes to the business value you can unlock. That’s because it allows you to focus on the areas that matter most for your bank, as well as its customers and employees. And since you’ve (hopefully) backed this up with data and customer input, you know it’s valuable work your end-users will benefit from. 

On top of that, this approach is great for risk mitigation, since it’s a smaller, more modular method that beats the big-bang approach every time. By reducing your scope to a single journey, your bank will remain agile, meaning you won’t be blindsided by market changes, and if customers decide they want something different, you’ll be well-prepared to deliver it. Once you’ve realized some early wins, you’ll build confidence, continue constructing your business case, and lock in additional success stories. Then, you can expand your modernization roadmap, journey by journey, preferably on a common platform model — a topic we’ll discuss in the very next blog.

The segment-based approach to progressive banking modernization

Next time, we’ll go over the second option for progressive modernization: the segment-based approach, which is a great way to overcome your bank’s technical debt and accelerate innovation. After that, we'll move on to a discussion of the headless method, a more tech-centric, platform-based approach that will help you rewire your bank’s core channels so you can reduce complexity and logic duplication across your tech stack.

For more information, check out our Banking Reinvented podcast, where Backbase Founder/CEO Jouk Pleiter dissects similar topics alongside Tim Rutten, EVP/Chief of Staff, and other digital leaders. Stay tuned as they chat about everything from progressive modernization to decomposing your bank’s complexity.