— Michael Pfau, Former Chief Digital Officer, Axos Bank
Despite being one of the most highly regulated and capital-intensive industries in the world, banking is undergoing a radical shift. But it’s not just about adopting the latest technologies, it’s about changing the very fabric of how banks operate, think, and serve their customers. These challenges of digital transformation go far beyond technology adoption.
That was the core message from a panel of banking leaders at the recent ‘Scaling Digital Transformation: Insights from Industry Leaders’ webinar, who gathered to unpack one of the most complex undertakings in the industry today. What emerged was a candid and often surprising discussion about the real blockers and breakthroughs shaping the future of financial services.
“The toughest part isn’t the technology, it’s culture and governance.” — David McGibbon, Partner, Banking Transformation, Baringa.
This quote set the tone as technology, after all, is rarely the limiting factor. Banks have access to sophisticated tools, cloud infrastructure, AI capabilities, and agile frameworks. The real challenge lies in aligning legacy cultures, siloed governance structures, and deeply ingrained risk aversion with the demands of a fast-moving digital landscape. These are among the most persistent challenges of digital transformation that banks must address.
Digital transformation in banking is often mischaracterized as a tech upgrade. In reality, it’s a full-scale reinvention of how banks deliver value. Niharika Pilla, VP of Digital Services at OneAZ Credit Union, noted that “digital scale isn’t just a technology challenge — it’s an organizational one.” Moving to digital-first operating models requires not just new systems, but new ways of thinking about teams, customers, and even success metrics.
Several panelists emphasized that one of the biggest mistakes banks make is thinking digital transformation can be solved through software. The truth is, transformation efforts succeed only when leaders are willing to revisit fundamental business models and make space for experimentation, often in traditionally rigid environments.
In an era where AI, blockchain, and embedded finance are constantly vying for attention, it’s easy for institutions to chase trends rather than strategy. Michael Pfau, former Chief Digital Officer at Axos Bank, warned of what he called “shiny object syndrome” — the tendency to invest in new technology for its own sake. “Digital transformation requires discipline and a focus on what truly delivers value,” Pfau said. This means grounding transformation efforts in clear business objectives, aligned to customer needs and operational efficiency, not just keeping up with the fintech next door.
No matter how elegant the tech stack or how well-funded the digital roadmap, people remain the critical success factor. That includes employees, leadership, and customers. Linda Conrad, SVP of Operational & Technology Risk at First Citizens Bank, put it plainly: “Without the people, you’re not going to be successful.” She underscored the importance of bringing risk and compliance leaders into the conversation early, not as gatekeepers, but as co-designers of change. Doing so can accelerate progress and reduce friction down the road. Similarly, ensuring the front lines of the bank — branch staff, call centers, relationship managers — are equipped and empowered is crucial to delivering a truly transformed experience.
As banks continue navigating uncertain economic conditions, evolving regulations, and rising customer expectations, digital transformation isn’t optional — it’s existential. But as this panel made clear, success isn’t measured by how many tools you implement. It’s measured by whether those tools help you meet strategic goals, adapt quickly to change, and create more value for your customers. Recognizing and addressing the challenges of digital transformation is therefore essential for future success.
Transformation, then, isn’t a destination — it’s a capability. For banking leaders willing to confront the real (and often uncomfortable) challenges head-on, it can also become a powerful competitive advantage.
David McGibbon
Partner
Baringa
Linda Conrad
SVP, Operational & Technology Risk
First Citizens Bank
Michael Pfau
Former Chief Digital Officer
Axos Bank
Niharika Pilla
VP, Digital Services
OneAZ Credit Union
Mark Johnstone
Director
MoneyNext