'Progressive' banks outpacing 'traditional' rivals on digital battleground

01 October 2021 Consulting.us 3 min. read
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Forward-thinking “progressive” banks are – unsurprisingly – digitally outpacing competitors that are more traditionally-minded, according to a recent report from CCG Catalyst. In its 2021 US Banking Study, the consulting firm surveyed 109 C-suite banking executives about their current digital capabilities, priorities, and plans.

CCG divided banks into the categories of progressive and traditional, and then examined how they fared across the areas of retail banking, segmentation, and technology and innovation, among other areas. Progressive banks (30% of surveyed companies) were those that acquired less than half of their technology from a single vendor, worked with fintechs as an integral part of their strategy, and had made at least one fintech investment.

Retail banking

Most banks serving the retail market offer some form of digital banking, whether online (desktop), mobile, or both. Customers at progressive banks are likelier to use a mobile app as their primary interaction method (33% vs 22%), while customers at traditional banks are likelier to interact with their bank via desktop (24% vs 7%).

Though desktop online banking seems to be fading in popularity, the impulse to just “go mobile” would be misguided, according to CCG. Banks should look to create seamless experiences that are device-agnostic and can be pulled into any interface that may gain in popularity.

US Bank Customers’ Primary Interaction Channels

Progressive banks lead in advanced features for customers, including in providing spend analytics to customers (60% vs 44%) and account aggregation services (67% vs 48%). They also outpace traditional banks on offering mobile check deposits (93% vs 78%) and free credit reports (60% vs 48%).

All progressive banks offer digital account opening services, while 8% of traditional banks do not. The majority of banks overall said customers can open an account in less than 30 minutes, while over a quarter said it takes less than 10 minutes. CCG notes that companies should be angling to get into the 10 minute category, as consumers’ top complaint is that access to services, including account opening, takes too long.


Progressive banks are much more focused on going for the right customer in the right way. With digital banking eliminating physical proximity as a determinant of a customer base, banks can target customers by criteria such as occupation, ethnicity, or home ownership. Daylight, for example, focuses on LGBTQ+ customers, while First Boulevard targets Black clients.

Nearly nine in tend progressive banks said they have a well-defined strategy for defining their retail base, compared to 58% of traditional banks.

Open Banking Readiness at US Banks

Technology and innovation

Very few respondents among both categories were willing to say they felt unprepared technologically for the next five years: only 9% of progressives and 14% of traditionals.

Though more traditional banks say they feel prepared in the area of APIs/microservices infrastructure, CCG believes this has to do with progressives seeing APIs as a much grander undertaking. “Progressive institutions recognize adopting a true API-first approach is a big effort,” said Kate Drew, director of research, CCG Consulting. “Traditional institutions may be operating with a narrower view of API readiness and may not fully absorb where the industry is headed.”

According to the report, the ability to compete in the future will rely on flexible infrastructure that can integrate with third parties (open banking). Progressive banks are much more likely to manage their own API layer in-house (70% vs 37%) rather than relying on a vendor. This gives progressives a stronger foundation for open banking, but it's also more costly and takes more time – and likely accounts for why progressives feel less prepared in the area than traditionals.