CHALLENGES OF DIGITAL TRANSFORMATION IN BANKING The challenges of digital transformation in banking are complex and often interconnected, spanning technical limitations, cultural resistance, regulatory pressures and security concerns. While the benefits of modernization are clear, the path forward is rarely straightforward. Common challenges include: • Outdated infrastructure that resists integration with modern systems • Fragmented data environments that hinder visibility, agility and informed decision-making • Internal resistance to change, especially in established institutions with entrenched processes • Limited in-house cybersecurity expertise, making it harder to manage growing threats and evolving technologies • Changing regulatory requirements, which demand constant attention to compliance in a digital context • Lack of leadership buy-in and a security-focused culture, which can derail even well-planned transformation efforts To overcome these barriers, institutions must prioritize education and employee training, partner with experienced vendors and set realistic road maps that build in security from the start. SECURING TRANSFORMATION WITH AI, CLOUD, BLOCKCHAIN AND BIG DATA Modern digital transformation relies on a powerful mix of technologies — including AI, cloud computing, blockchain and big data — to improve operations, customer engagement and risk management. AI enables real-time fraud detection, automated decision-making and behavior forecasting, while also strengthening cybersecurity through intelligent threat monitoring and faster incident response. Cloud platforms provide scalability, resilience and secure storage when configured correctly. Blockchain enhances transaction transparency and tamper resistance. Big data analytics helps banks turn massive datasets into actionable insights for both customer experience and risk mitigation. To unlock the full potential of these tools, banks must align innovation with governance. That means embedding security throughout every layer of the infrastructure, ensuring that transformation doesn’t outpace protection. ENHANCING CUSTOMER EXPERIENCE WITH SECURITY IN MIND The customer journey in banking is increasingly digital, but that doesn’t mean it should be less secure. When users log in to mobile apps, they expect multifactor authentication to be seamless. On online payment platforms, they trust that encryption protects their transactions. And as they sign up for new services, they assume their personal data is handled responsibly. This shift toward mobile is clear in user preferences. Mobile banking apps are now the go-to choice for nearly half of U.S. consumers, while just under a quarter still prefer desktop-based online banking, according to the American Bankers Association. Balancing convenience and protection is key to customer satisfaction. Institutions that achieve this balance strengthen their technical defenses, brand loyalty and reputation. THE FUTURE OF DIGITAL TRANSFORMATION IN BANKING Digital transformation in banking is no longer optional — it’s foundational. But transformation without security is risky and incomplete. Financial institutions must adopt a forward-thinking approach that places cybersecurity in banking at the center of every digital initiative. This means investing in the right technologies, building secure infrastructure, training employees and embracing a culture of risk awareness. It also requires strong executive oversight and governance to keep transformation efforts aligned with business goals. Leveraging governance, risk and compliance (GRC) tools like TRAC risk management software can help institutions streamline risk assessments, improve awareness across departments and ensure compliance. Banks that embed cybersecurity at every stage of transformation, innovate with intent and lead with governance will shape the future of digital banking. SBS CyberSecurity helps business leaders identify and understand cybersecurity risks to make more informed and proactive business decisions. For more information, contact Ryan Kast at (605) 270-9381 or ryan.kast@sbscyber.com. Learn more at sbscyber.com. INDEPENDENT REPORT | 23
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