Capitalizing on Digital: Four Strategic Imperatives for Banks and Credit Unions
By Nicole Volpe, Contributor at The Financial Brand
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For financial institutions today, digital is not a channel, it’s the bank or credit union itself — the environment in which accountholders discover new services and offers, open accounts and execute transactions, and decide whether to deepen or diminish their relationship. But as undeniable as this reality is, many banks and credit unions have yet to fully embrace it.
Consumer and industry research paints a stark picture:
- Financial institutions struggle to close the deal at critical online relationship moments: digital onboarding abandonment rates exceed 50% for deposit accounts and 75% for loans, according to a Harris Poll report.
- They have limited ability to anticipate accountholder needs or personalize offers: most institutions believe they hold only 25–50% of their customers’ total financial data.
- And they are missing the mark with younger consumers: Gen Z, often assumed to be the most eager for mobile-first experiences, reports the lowest preference for opening accounts online, according to a Harris Poll report.
Each of these gaps has its own cost, but together they undermine the foundation of every current and future accountholder relationship. A slow or incomplete onboarding process can mean a lifetime of under-engagement, or losing the accountholder entirely. Limited data visibility narrows the institution’s field of vision just as consumer expectations for relevance are rising. And when the youngest segment of the market would prefer to bypass your online channels, your future digital growth has already been compromised.
The situation leaves bank and credit union strategists with a clear mandate: Financial institutions that are able to define and execute a unified market-facing strategy — one that integrates and optimizes accountholder experience, data architecture, the core system, and the operating model — will hold the advantage. For banks and credit unions that aim to pursue this standard, here are four strategic imperatives to keep in mind:
Want more insights like these? Check out Jack Henry’s content hub: Maximize the Impact of AI to Ignite Innovation
Imperative 1 | Accountholder Experience: Reduce Friction in the Primary Channel
Abandonment during digital onboarding remains one of the clearest indicators of friction in banking’s primary operating environment. In addition to the Harris poll showing high abandonment rates for account opening (50%) and loan origination (75%) a global study of 14,000 consumers by FICO reported that more than half of respondents will abandon their application when presented with 10 or more questions, and more than 20% would drop out if asked five or more questions. Industry benchmarks have shifted as well: Capital One set what has become the de facto industry standard of completing account opening in under five minutes.
“You can have the best marketing campaign in the world, but if the account opening takes ten minutes and people bail halfway through, you’ve lost them for good,” said Jeff VanDeVelde, Senior Director of Marketing at Jack Henry, a financial services technology provider that unifies core, digital, and other services into a single, adaptable ecosystem. “Every extra click is an invitation for the accountholder to go do something else, and in digital, you rarely get them back.”
Some of the friction stems from workflows and form fields that were built for in-person interactions usually in the branch and later adapted to mobile and web. In practice, this can mean extra steps, duplicated data entry, or identity verification processes that require navigating outside the app or website. Even when the total number of steps is modest, poor sequencing or unclear progress cues can make the process feel longer.
Generational patterns complicate the picture: Despite being digital natives, Gen Z reports the lowest preference for banking online, according to Harris — and were also the generation most eager to open a new account in person. Some 65% of Gen Z prefers opening accounts in person versus 58% for the Gen X / Baby Boomer and Millennial consumers.
“Just because Gen Z is confident using the computer or using the phone, it does not mean they are confident in their financial knowledge. They are going into the branches to build their confidence and help them make the right decisions. We need to think of branches as financial confident centers, not banking transaction centers,” adds VanDeVelde.
Addressing these gaps requires continuous monitoring of abandonment patterns and targeted redesign of the most problematic steps. Mobile-specific bottlenecks, such as document upload prompts that break the flow, are common culprits. Institutions that have mapped drop-off by device and step have found that small interface changes — keeping users in-app, reducing redundant entry — can yield significant gains in completion rates within weeks or months.
Imperative 2 | Core Systems: Let Digital Dominate
The separation between digital delivery and core processing is an enduring legacy of the branch-first era. And financial institution leaders are increasingly aware that their digital banking platforms, and their supporting architectures, may be holding them back.
Jack Henry canvassed 149 bank and credit union CEOs for its 2025 Strategy Benchmark survey. Included in the findings: Digital banking is far and away the top technology investment priority for banks this year, ahead of cybersecurity, AI, and data analytics. For credit unions, digital banking is a top-three spending priority, along with fraud prevention and automation.
The problem is that many institutions still adapt their digital capabilities to fit core limitations, which slows transaction speeds, undermines consistency across touchpoints, and constrains the ability to introduce new features.
In contrast, modern architectures dissolve the boundary between core and digital. The digital banking solution is no longer a bolt-on to the core; the core and digital come together to form the accountholder experience. That user experience is delivered through the digital channel, but when done correctly, it’s enabled by the modern core. Among other things, the core transformation requires robust use of shared APIs, consistent data structures, and unified development teams.
Leading financial institutions are coming to realize that core evaluations now must include an evaluable of their capability to enable the digital experience. Criteria like Availability, Reliability, Real-time, Speed and Security are now emerging as foundational requirements of a core to enable the digital experience. “If your core can’t keep up with your digital, you’re stuck playing catch-up forever,” said Jack Henry’s Paul Wiggins, Director of Sales, Digital Engineers.
The result is increased strategic impact and agility across the organization, enabling critical new capabilities to be built once and deployed across touchpoints, including mobile, web, and branch interfaces. A tokenized API approach, when applied to third-party data partners, also reduces friction and security vulnerabilities.
Financial institutions’ prioritization of digital banking suggests they recognize the core’s role has shifted. In a unified environment, product changes, compliance checks, and fraud controls can be deployed simultaneously to all channels, reducing duplication and operational complexity.
Imperative 3 | Data Architecture: Unify the Accountholder View
Surveys of banks and credit unions confirm that most institutions still see only a fraction of their accountholders’ financial lives. What is visible is largely limited to accounts and transactions held in-house, leaving out significant flows through fintechs, embedded finance platforms, and workplace benefits. This partial view limits personalization, slows fraud detection, and constrains product innovation. It also puts them at a disadvantage in a marketplace where the standard for digital experience has been set by the likes of Instacart, Amazon, and Uber.
For banks and credit unions, anticipating customer and member needs — and generating compelling and relevant recommendations — can be more challenging because so much relevant data lives on other institutions’ sites. The average individual has 14 financial apps, and the average Millennial family has 30-40, according to an analysis by Jack Henry.
A unified, real-time architecture integrates internal data with partner feeds and accountholder-permissioned external account data into a single profile. When all data lands in one environment, tagged and structured for analytics and user-facing functionality, institutions can detect needs earlier and respond with greater precision. Examples include:
- Personalization and targeted offers informed by an understanding of spending habits and a more complete financial picture.
- Fraud prevention that uses transaction patterns across all linked relationships to detect anomalies earlier.
- Product innovation that responds to real-world behaviors, such as peer-to-peer transfers in certain demographic segments.
“Most banks and credit unions only see a fraction of an accountholder’s financial life, and without integration you’re making decisions in the dark. If all your data streams into the same environment, you can spot patterns — like an accountholder starting to save for a down payment before they even ask for a loan.”
— Paul Wiggins, Jack Henry
According to Wiggins, Jack Henry has redesigned its architecture away from traditional screen scraping in favor of API-based tokenization. The vendor has built connections supporting a broad ecosystem of providers and aggregators (such as Plaid, Intuit, and Finicity). The API approach makes data immediately available and actionable for both the institution and the accountholder.
Imperative 4 | Organizational Alignment: Make Digital the Unifying Idea
The challenge is as much organizational as technical. It requires bringing internal and external data, monitored and activated across all channels into an orchestrated accountholder story and then aligning teams to execute against that combined vision.
Many institutions still operate with digital siloed in one department, while marketing, product, and operations pursue separate agendas. This leads to mismatched priorities — products that aren’t promoted effectively, campaigns that promise features operations can’t support, and technical fixes that don’t address the root cause of customer and member pain points.
“If marketing is running one playbook and product is running another, you’ll never deliver a truly seamless accountholder journey. Even more important, digital has to be the starting point through which every decision gets made — otherwise you’re just automating the old silos.”
— Jeff VanDeVelde, Jack Henry
It starts with digital, and the other channels are there to support that experience seamlessly across channels. If you start a transaction in one channel and then call for support, the accountholder expects you to have visibility into that transaction.
Small-business services are a case in point. Jack Henry’s Strategy Benchmark study found that 80% of CEOs plan to expand these services over the next two years. For an institution to deliver on that ambition requires coordinated execution across acquisition, onboarding, engagement, and support. Cross-functional alignment is a prerequisite, even when the underlying technology is in place. For example, an individual with both a business and a personal account should feel confident that the institution sees their whole financial picture, and doesn’t treat them as two separate entities.
Institutions making progress on this front are mapping the accountholder journey first, then aligning systems, policies, and processes to support it. When teams share metrics and accountability for the same outcomes, personalization, low- and no-friction onboarding, and integrated risk controls become embedded in the operating model rather than bolted on later.
Platforming Growth
It’s a given that digital technology has completely remade the financial services industry. For banks and credit unions, this means that the digital channel has evolved to encompass the whole banking experience. Yet many institutions continue to struggle with a fragmented, legacy-based approach that holds back engagement and undermines future growth.
To overcome this challenge, these institutions should approach the four imperatives — optimizing the accountholder experience, modernizing core systems, unifying data architecture, and aligning organizational structure — as interconnected components of a cohesive strategy.
By seeing digital as the primary operating reality, banks and credit unions can begin to envision a new operating model, supported by the right technology platform, that enables delivery of an accountholder journey with less friction and more upside. Ultimately, the institutions that thrive will orchestrate these elements to meet, and anticipate, accountholder expectations faster than those expectations shift.
