Thoughts

The Digital Maturity Gap in Financial Services

Author

Corey Vilhauer

Industry:

Financial Services

Categories:

Strategy

Credit unions and community banks have room to grow on digital — but the gap isn't about size or software. It's about strategy. Here's where to start.

We work with a lot of financial institutions — especially credit unions and regional community banks — which means we’ve heard some version of the same conversation dozens of times. They feel behind on digital. Very behind; meaningfully behind, in ways that show up in member experience and application abandonment and the general quiet anxiety of watching giant corporate banking institutions make sweeping claims about digital that feel completely out of reach.

And we sympathize with that. It’s present in every industry — the small, personal organizations are compared to the big monoliths, and the conference talks and webinars and articles focus on bleeding-edge technology and data samples from the biggest names. It’s easy to feel like you need to close the gap — a new platform, a redesign, a mobile app.

Sometimes you need those things. Sometimes you don’t. Regardless … that gap in digital maturity is real. It’s just not what you think it is.

Credit unions and digital maturity.

In Alkami's Retail Banking Digital Sales & Service Maturity Model Report, they outline the four stages of digital maturity:

Patiently Exploring - Limited resources, consumer-first, and dreams of an updated tech stack.
Innovation-Ready - Starting to invest in their technology to deliver a great experience.
Digital-Forward - The digital banking experience is better than average, with automated processes.
Data-First - Fully embraced data as a tool for delivering the best possible experience.

This spectrum is shaped by how institutions align culture, strategy, operations, and technology investment around digital delivery — those who are driven to innovate are more likely to move quickly toward Data-First, while more hesitant organizations will stay Patiently Exploring. In a risk-averse industry like banking, it’s common to see a wide spectrum of adoption.

However, stunted digital maturity seems to be more prevalent in the credit union space. According to research from Equifax, about two-thirds of credit unions are still in the nascent or developing stage of digital maturity — compared to roughly 45% of community banks and 31% of regional banks at the same stages. The further down the size spectrum you go, the wider the gap tends to be.

This matters because, increasingly, people are relying on digital pathways to find banking services, and the lack of digital maturity within credit unions is capping how credit unions show up in the numbers. McKinsey & Company’s research on digital sales in the US financial services sector found that between 2015 and 2024, the share of sales made digitally rose about 30 percentage points industry-wide, reaching 36%. Regional banks now make more than 30% of their sales through digital channels. However, by comparison, credit unions are stuck below 10%. McKinsey estimates that closing that gap could represent a $5 to $10 billion revenue opportunity for the credit union sector.

This might simply be a demographics issue: baby boomers currently represent more than 50% of credit union revenues — representing a higher share than in the broader financial services sector — so there’s an automatic assumption that digital pathways are not as important, given the digital maturity of boomers themselves. Not important yet, that is. As the boomer share of financial services revenue declines over the next decade, institutions that haven't built meaningful digital relationships with younger members are going to feel it.

In other words, the urgency is real.

There isn’t a simple software solution.

This isn’t for lack of trying. Community banks and credit unions are already investing big in digital. It’s not moving the needle … yet.

Part of that is because the money is spent on new digital solutions. Based on a 2025 Digital Banking Performance Metrics Report from Cornerstone Advisors, commissioned by Alkami, Institutions spent heavy on digital tools — new apps, new features, new account-opening flows — only to run into the same issue that we find when everyone switches to a common CMS or other digital tool: if everyone’s using the same kind of digital solution out of the box, no one is able to differentiate themselves.

Additionally (and unfortunately), new digital tools didn’t solve any of the underlying experience problems either. That same report found that digital applications were abandoned at a rate that doubled year-over-year, up to 67% in 2024.

In other words, there’s a gap between investment and outcome, which backs up our constant reminder that digital tools themselves are rarely the problem — just as they’re rarely the solution. Instead, while we want to blame our platforms for performing poorly, we should really be looking at the strategy underneath them — or, the absence of a strategy at all.

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Why platform-only solutions struggle.

Some of this is due to an age-old problem: the cycle of focusing on platform over strategy and the lack of planning that comes from this cycle.

It might look a little like this:

An “initial spark” sets the process in motion. Maybe a new CMO has taken the reigns. Maybe a vendor contract expires. Maybe leadership just decides the current website is embarrassing.
Budget is approved for a redesign and a platform migration.
An RFP goes out and a vendor gets selected.
The new platform gets configured and the site launches.

Without a strategic plan for this new endeavor, the same things happen over and over again. Usually, within a year or two, the team is dealing with the same problems they had before — like content that's hard to maintain, navigation that hasn’t been detangled, or product pages that don't map to how people actually move toward a decision.

The common thread in all of this is that the platform evaluation happened before anyone answered the strategy questions. The new system got configured around the existing content environment — the same one that was causing problems in the first place. So the problems followed it over.

Who owns what content, and how does that content get updated when something changes?
How does rate information get updated — in one place, or across a dozen pages manually?
What happens when a new product launches?
What does our content structure actually need to support?

When those questions go unanswered, a new CMS inherits every problem from the old one. It feels just as hard to use, just as inconsistent from page to page, just as disconnected from how the team actually works — because it is.

Maturity depends on strategy, not size.

Let’s get this out of the way: you do not need to be a large organization to find maturity in your digital process.

Digital maturity doesn't correlate with size. Research from Alkami across more than 200 US financial institutions (Retail Banking Digital Sales & Service Maturity Model Report) suggests that roughly one-third of the most digitally mature institutions have less than $500 million in assets, and that number continues to grow. What’s more, those most digitally mature institutions report up to five times the annual revenue growth as their less mature counterparts.

Which is all to say: if you feel like you’re behind the digital maturity curve, it’s not because you’re small.

Rather than size, strategy and mindset are the key differentiators across maturity stages. A results-forward culture — where leadership and staff are both committed to thinking strategically about digital tools — consistently produces better outcomes than technology investment alone. Institutions that treat digital as something they are buying, rather than something they are doing, tend to stall out.

This is good! While budget is often pre-ordained, mindset and strategy are things you can actually change.

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What is a digital experience readiness roadmap?

A Digital Experience Readiness Roadmap is for organizations that need to build, expand, or fundamentally realign their digital presence — but aren't sure where to start, what's actually the priority, or whether their team is set up to execute it.

Learn more with our digital experience explainer.

What is a Digital Experience Readiness Roadmap?

What closing the gap actually looks like.

This is all to say: digital maturity is a process. The institutions who do this well don’t expect to close a gap with one single transformation project; instead, they close it through a sequence of intentional decisions that compound over time.

Here’s a few places you could start:

Figure out your process before you figure out your tools.

A new CMS configured on top of an ungoverned content environment inherits the sins and complications of the old one. Before the next platform evaluation, it's worth asking questions like:

Is there a single source of truth for rates and product information, or is it scattered across pages and managed manually?
Who owns what content, and how does it get updated when something changes?

These questions don't require a consultant — but they do need answers before an RFP goes out. If you migrate without this clarity, the new system will feel just as frustrating within 18 months.

Audit what you have before you build more.

Every site has skeletons, in the form of content that hasn’t been maintained, navigation centered on outdated internal departments, and product pages that haven’t been revisited in years. This is the accumulated weight of stale content, and while a content audit is never a glamorous endeavor, it tends to reveal more about why the experience feels broken than any platform evaluation ever will.

Treat your content as the experience, not the site itself.

Potential customers do not come to your site for the graphics, or the interactive elements, or the cool logo or photos — they come to learn something about your organization. That’s content, and that digital experience — words, label, and structure, from microcopy to navigation labels to topic clusters — is why people connect (or find difficulty connecting) to your bank or credit union.

When your content is inconsistent, hard to find, or organized around how the institution thinks (rather than how members search) the experience breaks down regardless of what the underlying platform can do.

Understand your current maturity stage before deciding what to invest in next.

Trying to skip stages tends to create more problems than it solves. With everything that’s happening in communication technology — from AI-assisted search to advancements in financial app development — it’s easy to want to go all in from the start. But just as a 12-year old can’t be given a car, a credit card, and a house and be expected to understand the next steps, our organizations must slowly mature into the tools we need.

Using Alkami's research and their digital maturity model as a guide, we can see how the next move isn’t always a move to the top — to full adoption. That next move might look different depending on where you actually are, and there's real value in an honest assessment of that, even if it's humbling.

You won’t be “behind” forever.

If this sounds overwhelming … it might be. But if we could add a bit of hopefulness to all of this, it’s to say that organizations with a lack of digital maturity won’t necessarily be behind forever. While it’s easy to see the big banks running roughshod over each of our communities and assume that community banks and credit unions are simply outmatched — that the gap between them and the large national banks is too wide and too expensive to close — in reality, there’s still room for growth. There’s still room to get ahead.

Institutions with well funded digital programs aren’t automatically winning — and they’re especially not winning if they skip the strategy work that helps ensure their budget is going to the right places. Community institutions and credit unions have something that no national bank and no fintech startup can buy: genuine relationships with the people they serve, and a deep understanding of the community those people are part of.

Understanding the community is an asset that digital tools can amplify, but never erase. Because the goal with digital maturity isn’t to try to build the next Chase or Wells Fargo — it’s to build a digital experience that reflects who you actually are.

The great thing is that, with the right strategy, it can be maintained by the team you actually have, and it won’t require the biggest budget or the most sophisticated platform. But it will require you to pay attention to the thinking behind the message.