Originally appeared in The Financial Brand

There is undeniable momentum in financial services around digital transformation as companies look to build better experiences for end users while driving efficiencies and innovation.

Most bank executives say their long-term success depends on digital transformation, with many already investing heavily in modernizing IT infrastructure. Meanwhile, only a small percentage — less than 10%, according to Accenture — have committed fully to transforming their operations around a digital core.

Consumer demand for better digital experiences persists and businesses’ desire to modernize operations and offerings grows. Three key factors must be considered by banking leaders in order to deliver a well-executed digital transformation strategy that advances growth while delivering the added value customers are demanding.

Customer Experience as a Competitive Differentiator

Customers demand speed, convenience and seamless experiences with their money, yet Salesforce research indicates that only 21% are satisfied with the digital experiences offered to them.

Companies that invest in offering a best-in-class front-end customer experience through digital services can differentiate themselves and better satisfy customers. The end user, be it a consumer or business, isn’t concerned with what goes on behind the scenes — they want experiences and services that just work. To take it a step further, by tacking on new digital services — such as virtual cards, P2P payments, biometric identification and more — players can further distance themselves from their competition.

Back-End Operational Excellence is Critical

Just as important as the front-end experience are the back-end operations that keep and build the customer relationship.

Value-added digital services that deliver back-end operational excellence can improve the customer experience through better customer service, improved security and more.

Emerging tech like artificial intelligence can substantially improve how companies get a clearer view into their operations and customer base. Take data flow and management, for example. Many executives report they are swimming in information, yet around half admit they struggle analyzing it, according to research by Paynearme. While data is important, the insights derived from that data are key to the conclusions executives must draw.

Maintaining a digital record of customer information, transaction history, spend behaviors and other metrics and applying AI to analyze and inform decisions can help companies provide better service and protect their end users. They can streamline customer service, for instance, by immediately sourcing relevant information and delivering a resolution in near-real time, or by automating the analysis of spend behavior and location data to shut down potential fraudsters.

Cloud Services Can Build Flexibility and Scalability

Enlisting cloud services can afford banks and other financial services providers the flexibility to evolve offerings over time, easily integrate third-party services where appropriate, and grow their business as the market changes.

In fintech, for example, cloud-based platforms allow companies to offer configurable features and the convenience of scaling and adjusting offerings as their customers grow and evolve. Particularly when platforms are developer-friendly, features can be integrated seamlessly through third-party applied programming interfaces that would otherwise require immense resources to build in house.

Nearly all — 95% — of respondents to a PwC survey concerning banking in the cloud say they’ll be fully cloud-based within two years, but only 38% have scaled it throughout their business. The challenge of modernizing a company’s platform can be a bottleneck to innovation.

Banking companies can differentiate themselves with digital offerings, but it’s important to fully understand your customer to ensure you’re appropriately defining your digital transformation roadmap and priorities. By focusing on a modern and customer-centric UX that is supported by seamless and effective back-end operations and leveraging cloud services to drive efficiencies and provide future-proofing, companies can deliver better customer experiences and innovate faster and more efficiently.