Digital Transformation and the Challenge of Differentiation for FIs

On one hand, digital banking technologies have made it possible for financial institutions to offer more services than ever before. On the other, this shift has often made it harder for banks and credit unions to differentiate themselves. That challenge is likely to grow as institutions try to stand out in digital environments increasingly shaped—and administered—by artificial intelligence.

The rise of AI-powered search is just one of the trends highlighted by the Javelin Strategy & Research Digital Banking team—Disha Beda, Lea Nonninger, Gregory Magana, Mark Schwanhausser, Emmett Higdon, Dylan Lerner, and Ian Benton—in the 2026 Digital Banking Trends report.

Bridges Vs. Doors

Another major trend this year is the continued entrenchment of wealth management tools within digital banking platforms. In the past, many banks kept their wealth services separate from their retail banking apps.

Over the last few years, however, more financial institutions have begun embedding wealth experiences directly into their consumer apps, with varying degrees of success.

“We don’t think they’re doing a very good job,” Lerner said. “We often talk in our practice about a bridge to investing. It’s a way for banks to bring their deposit customers—young people or people new to investing—over to the investment side of the house. What we see now is they’re putting in doors. They’re not building a bridge; they’re hoping you stumble upon it and walk your way in.”

This change is partly constrained by the limitations of mobile apps, where financial institutions must carefully optimize scarce screen real estate. At the same time, the number of financial services offered through a single app continue to grow, and adding wealth management capabilities makes streamlining the user experience even more difficult.

As a result, many lenders now offer apps that feel cluttered or are designed in a less-than-optimal way.

“Even the giant FIs are seeing challenges,” Lerner said. “The wealth experiences in their retail apps feel out of place and out of touch to the core retail audience of mass market consumers. It feels like you’re stumbling into somewhere you’re not supposed to be.”

“Banks need to be more methodical and strategic about how they’re cross-selling investing services to deposit customers,” he said. “You can’t just put a door in front of them; you have to build a bridge. They’re struggling to put in that effort.”

In the Wake of AI

Delivering this level of tailored guidance is essential for financial institutions because it has become harder for them to stand out.

When the internet emerged and Google became the leading search engine, search engine optimization (SEO) was critical for banks to appear in web searches. Today, however, this paradigm is shifting with the rise of AI.

“It’s not just that you can ask ChatGPT, ‘What’s the right bank for me, what’s the right account for me, or where should I go to manage my finances?’” Lerner said. “It’s also the fact that if you go to Google and you type in something, the first thing that comes up isn’t the list of results—it’s the Google AI Overview .”

“And not only are there more consumers using it, it’s something that banks have to think of as another marketing stream,” he said. “That’s another tool that both their customers and their prospects are using to ask questions to potentially learn about financial services.”

While SEO remains important, financial institutions must also asl whether their websites are optimized for AI. As language learning models crawl the web, banks and credit unions need to present their business models in a way that ensures AI highlights their organizations rather than competitors.

AI-powered searches also provide users with richer information. Historically, a Google search might return a straightforward list of results. In contrast, platforms like ChatGPT, Perplexity, and Gemini can offer deeper context, and users can ask follow-up questions to receive personalized recommendations.

“It’s not enough just to be the first result in Google,” Lerner said. “You have to think about how AI is going to interpret my website and know how to put my product first and foremost. You can’t just focus on rates and the usual stuff. You have to involve the digital banking team when it comes to guidance and advice on building websites.”

“You have to think about your public site, and does it have everything on there?” Lerner said. “You can’t hide everything behind the authenticated site. You have to make sure some of it is publicly available because now there are web crawlers that are not just trying to find a result, they’re trying to build a conversation with a client.”

The FedEx Model

In addition to website and wealth management overhauls, financial institutions must make their money movement options clearer to customers. The payments industry has exploded with choices in recent years, but the abundance of solutions can be overwhelming for many users.

For example, a customer looking to move money might use a standard transfer, an external transfer, Zelle, or a bill pay service. On top of that, they could leverage peer-to-peer services such as Venmo, PayPal, or Cash App. Understanding the nuances of all these options is a tall order for most customers.

“The more strategic perspective is you don’t want your mobile app to just be a tool in their pocket,” Lerner said. “You don’t want your customers to perceive your app as a bunch of ways to send money.’  You want that mobile app to be a portal to building deeper relationships with your customers.”

Designing a solution that accommodates all these options can be difficult within a mobile app. Most institutions are unlikely to dedicate the majority of a smartphone screen to display every possible money movement option. Instead, many banks consolidate these features into a single money movement menu.

While this approach may work for savvy customers, it can still overwhelm others. Therefore, organizations must also focus on educating consumers about the best ways to navigate these payment types.

“It’s important to have a one-stop money movement hub where they can get guidance on choosing which option to use,” Lerner said. “It’s helping customers, guiding them on which money movement option to choose. The hard part is, how do you do all of that on a small screen? How do you explain the difference between bill pay, transfers, external transfers, bill pay, Zelle and broader P2P?”

“The future is more akin to intelligent payment routing, where you just tell me what you have, and the bank will automatically use the optimal rail,” he said. “It’s what they might call the FedEx model—I don’t worry about how my package gets there; I just know my package needs to get there.”

The Right Time and Place

Across all the trends shaping digital banking this year, one theme stands out: financial institutions need to deliver more tailored experiences—a feat that will be challenging for many organizations.

“We know there’s a lot on your plate right now as a bank, including what goes into your mobile app, but here’s a couple of places to stop and think about how to be more strategic,” Lerner said.

He added: “Whether it’s where you’re placing your investment cross-sells, how you’re building your public sites to ensure that it’s properly set up to grab the attention of AI crawlers, or how you place money movement options—are you putting the right thing at the right place at the right time in front of the right customer?”

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Tags: AIDigital BankingIntelligent Payments RoutingMoney MovementPayments ModernizationWealth Management