Operational efficiency is a valid concern given many banks’ aging technology and legacy processes. It’s natural for many bankers to feel compelled to prioritize fixing operational risks, cutting costs, and removing roadblocks to modernization — like manual processes, inefficient workflows, inconsistent data between systems, and problems integrating third-party technology. This is an important part of modernization.

Revenue generation, meanwhile, is the other side of the coin. Elements of a modern customer experience support revenue, and to build one, banks generally need to invest in technology. They may consider, for example, customer-facing top-of-funnel tools like digital onboarding (for customer acquisition) and day-to-day tools like digital banking, which together help create the overall digital experience.

Critically, improvements to operational efficiency can help lay the tactical groundwork for a good customer experience. Banks may find back-office efficiencies with features like integrated payments, analytics, fraud management, and support for integrations, which affect ease of use and security for customers. Given that modernization battles maintenance for a share of the IT budget, it is important to understand the connection between operational efficiency and customer experience when determining what is most important and how resources will be allocated.

With this perspective, the board can create a vision for modernization and senior management can draw up a roadmap that reflects both the bank’s business priorities and operational needs. Modern operations will help make a bank competitive with peers because it reduces drag on day-to-day functions and makes it easier to operate with the speed and agility needed to introduce new features and experiences. With those changes, the bank will be better able to enable optimal customer acquisition and engagement.

We’ve argued in the past that banks have a strong incentive to invest in the customer experience and what modern experiences should look like. With a robust knowledge of customer expectations, they’ll be better prepared to base their strategy on what will acquire, engage, and retain those customers. Improvements to operations can support that, and strategies are likely to benefit from looking at these elements holistically.