The Next-Gen Digital Banking Platform

OBSERVATIONS FROM THE FINTECH SNARK TANK

The digital banking revolution is over. Not because it failed, but because it’s stalled. Consumers have embraced mobile and online banking. Banks and credit unions have poured millions into digital channel investments. Yet, satisfaction is down and many institutions realize their digital banking platforms can’t deliver what’s next.

A new report from Cornerstone Advisors and Q2 lays out the case for why it’s time to move beyond the digital banking platforms of the past—and what the next generation will look like.

Digital Banking Has Hit a Wall

According to Cornerstone’s analysis, the use of digital channels—particularly mobile banking—remains dominant across all generations. But satisfaction with digital experiences is plummeting. From 2021 to 2024, JD Power data shows a 24% decline in mobile banking app satisfaction. And that’s despite the rollout of dozens of new features like card controls, subscription management, and budgeting tools.

The problem? These features are incremental at best. They don’t address the challenges banks face—like poor integration, a lack of personalization, and a failure to help customers improve their financial performance. Digital banking has become little more than a delivery channel for checking account access, not a platform for innovation.

Three Digital Banking Challenges Facing Banks

Cornerstone’s conversations with bank and credit union executives surfaced three core challenges that today’s digital banking platforms fail to solve:

1) Integration failures. Integrating third-party applications, internal systems, and new data sources is a nightmare. As one chief experience officer put it, “Platforms need to be designed with integration in mind from the start.” The lack of a middleware solution or integration layer forces institutions to rely on patchwork fixes, vendor APIs, and complex workarounds that delay launches and degrade the customer experience.

2) Personalization deficits. Consumers expect digital experiences tailored to their specific needs. Unfortunately, most digital banking platforms treat personalization as little more than adding a first name to a greeting. “The digital banking experience doesn’t feel like it’s personalized in that it doesn’t reflect members’ needs and wants,” said the chief digital officer of a $750 million credit union.

3) Lack of financial enablement. Consumers don’t just want to check balances or pay bills—they want help improving their financial lives. Fintechs have moved aggressively into this space, offering tools that manage subscriptions, improve credit scores, negotiate bills, and more. Banks and credit unions are lagging, not because they lack the intent, but because their platforms can’t integrate these services—or deploy the AI agents needed to deliver them.

Enter the Next-Gen Digital Banking Platform

The future isn’t about adding more widgets. It’s about rebuilding the digital banking platform from the ground up to meet today’s challenges—and tomorrow’s opportunities. According to Cornerstone, the next-generation digital banking platform must include three core components:

1) Application integration layer. This layer acts as the connective tissue of the platform. It includes developer portals, code libraries, and app marketplaces to make third-party and internal integrations easier, faster, and more scalable. Instead of bolting on fintech capabilities, banks should be able to plug them in seamlessly. Ben Maxim of Michigan State University FCU put it best: “There’s a need for an enterprise service bus as middleware to integrate fintech APIs with existing digital channels.”

2) Embedded AI. Rather than treating AI as an afterthought, next-gen platforms will have it built in. This includes:

• Conversational AI to replace rigid, menu-based navigation with natural language interfaces.
• Generative AI to execute marketing campaigns, answer complex financial questions, and drive personalized interactions.
• Autonomous AI Agents that help consumers cancel subscriptions, dispute charges, or negotiate bills without human intervention.

Peter Glyman of Jack Henry tested this idea by running his own banking data through ChatGPT and came away impressed: “What took us years to develop at Geezeo, ChatGPT accomplishes with astonishing speed and accuracy out of the box.”

3) Employee workstation. The next-gen platform will also empower bank employees with AI-driven insights, flexible segmentation tools, and campaign automation. Imagine a marketing team asking the platform to “raise $2 million in HSA deposits” and the system responding with a plan, running A/B tests, optimizing emails, and executing autonomously. That’s not fantasy—it’s already happening at institutions experimenting with tools like AutoGPT.

Getting To The Next-Gen Digital Banking Platform

As Ringo Starr once sang, “it don’t come easy.” Building or buying a next-gen digital platform demands more than capital. It requires:

• Strategic clarity. Knowing who you’re serving and what you’re offering–i.e., products designed to meet the unique needs of the customer segments being served.
• New organizational structures. Digital can’t remain a silo. It has to permeate the institution.
• Better data management. AI is only as good as the data it ingests.
• New IT skills. Institutions must learn to evaluate and augment vendor APIs and manage integration in-house.
• Reimagined vendor partnerships. The term “partner” needs to mean shared goals, shared costs, and shared value—not just a software contract.

Digital Isn’t Just a Channel Anymore

If your institution still thinks of its digital banking platform as an app or website, it’s already behind. The platform is the business. It’s where products are delivered, where value is created, and where differentiation must be built.

According to Cornerstone’s Jessica Pinkston, “the lack of clear ownership in driving digital transformation represents a huge roadblock for financial institutions fighting to stay relevant.”

It’s no longer a question of whether or not banks and credit unions need a new digital banking platform. It’s whether they’re ready to manage the institution as if the platform is your business.