A version of this article first appeared in the December BAI Executive Report: The 2025 banking landscape. Find more within the report as industry peers share the strategies and potential solutions for meeting customer needs, preparing for market uncertainty and streamlining operations to preserve margins.
It’s time to reimagine digital workflow in favor of end-to-end horizontal integration, a transformative approach that can seamlessly link people as much as leverage technology.
Importantly, it’s an approach that won’t abandon the regulatory, risk-aware and fraud-fighting principles that traditionally define banking. The good news is that some of the banking industry’s top executives — we call them Pacesetters — have already put this potential into practice, results shared in a fresh survey and report from ServiceNow and ThoughtLab.
There’s little doubt the pandemic-induced lockdown and dogged neobank and nonbank
competition combined to quicken what had been a metered pace of digital integration in the traditional financial services space. The expediency reduced rollouts for seamless IT platforms and customer interfaces to triage at most banks.
Because risk aversion and stringent regulation is in banking’s DNA, some banking leaders may have embraced the opportunity for selective upgrades or experimentation while maintaining legacy cores.
They perhaps gained quick momentum toward transformation, nudged also by customer expectations and the need for operational efficiencies, but the data in our report indicates mixed results.
Digital lines of business may be delivering some value but are coming up well short of all that banks had hoped for.
Banking leaders were asked to think about desired success throughout their enterprise. The survey sought feedback across seven key transformation drivers: customer experience, optimized technology infrastructure, enhanced governance and compliance, use of resilient and secure systems, scaled business processes, productive employee experiences, and alignment of digital and business strategies.
The bulk of the 1,125 surveyed leaders from retail, commercial and full-service banks are
underwhelmed by the outcomes of their digital transformation efforts. In my experience as a former bank CIO, I’ve seen the success of when digital investments are an integral part of delivering overall outcomes, and the pitfalls of misalignment and departmental silos. What’s clear to me is that business and technology can’t be separated. Technology is a critical part of every corner of your bank.
AI and more: What sets more digital adopters apart
Survey responses show that the Pacesetter banking leaders able to squeeze the most value from their digital adoption over recent years, those Pacesetters I mentioned, went all in for scalable IT platforms. And in a rising number of examples, artificial intelligence (AI) augmented their upgrades.
My largest takeaway from the survey’s resulting report, The State of AI-powered Business Transformation in Banking – Workflow™ is that banks can’t think piecemeal. They must harness end-to-end IT platforms with digitized workflows that unite the business horizontally — with AI, low-code facilities and automation built into an experience that connects current and future technologies, data and people.
That’s right, leveraging human capital inside the bank will be more important than ever. AI, including generative AI, is top of mind in financial services even among those only yet exploring its offerings. In our survey, 68% of executives said AI will be an industry game-changer.
Pacesetters are also likely to add machine learning, AI, generative AI as their latest instruments in a toolbox that has already been built to take the burden off aging siloed infrastructure. The best-in-class operators already tend to leverage the cost efficiencies of automation, cloud storage, SaaS and API solutions. What’s more, horizontal integration makes for easier partnerships with third-party vendors.
Pacesetters stand out because they can show action across a multitude of priorities, balancing digital and business strategies, resiliency and security, and more.
Taking care of business: Risk and regulation
You can ease your concerns if you think that a technological push of this magnitude abandons solid banking foundations. Pacesetters emphasize that preparing for an evolving risk and regulatory landscape is just as valuable within this horizontal mapping as customer experience, talent management, or any other priority.
Executives tell us they believe that cyber and technology risks will eclipse other banking risks as financial markets and systems become hyperconnected.
Further, leveraging digital technologies and data analytics to identify anomalies, enhance transparency and monitor and manage regulatory requirements is only growing more significant. So, too, is the need for automation to support increasing demands for staff to monitor fraud risks in real time. Regulators are challenged, as well, by the fast pace of changing technology. The more banks can simplify proof of compliance, the better.
Meanwhile, the top customer experience challenge for banks globally is compliance with data privacy regulations and other security risks.
Pacesetters are better positioned to address these challenges. Some 95% of this top group compared to 48% of others are at least midway through implementing enterprise-wide connectivity of services across systems, processes, people and departments to deliver personalized, intuitive and frictionless experiences.
Where do we go from here?
The survey drives home the fact that now is not the time to further retreat into small moves as digital change has shifted into hyperdrive. Banks will need to provide consumer-grade services, often integrated into non-financial platforms and apps to provide frictionless experiences for users. In other words, meeting consumers where and when they transact.
For sure, banks always must assess expectations from a range of stakeholders spanning customers to employees to shareholders, board members and even the larger communities they operate in.
Institutions are unique. But I can leave you with an idea of how the Pacesetters in our survey are looking to nourish the transformative processes they’re already capitalizing on, in 2025 and beyond.
- Pacesetters will continue to make large investments in traditional AI and generative AI over the next three years.
- These banks plan pervasive use of the cloud and SaaS and will drive rapid innovation through API solutions.
- They will supply employees with digital tools and experiences, including mobile apps, easy access to resources, digitized employee and HR work processes, data sharing platforms and learning tools.
- Surveyed Pacesetters will maintain simplified customer onboarding, personalize interactions and they’ll deliver omnichannel engagement.
- Plans include building or supporting resilient, secure systems and investing in risk solutions that manage data, provide predictive analytics and use cybersecurity for risk detection.
- And because all departments are engaged in an end-to-end transformation, Pacesetters will enhance governance and compliance operations to be betterprepared to adjust to a changing regulatory climate.
To future-proof operations and accept the challenges and strategic opportunities of tomorrow, the most successful banks won’t simply accept their place within a disappointing fragmented digital transformation — they’ll join the leaders in full-scale business transformation.
Simon Cox is Chief Transformation Officer at ServiceNow.
link