Community banks have long been entrenched in the populations they serve, and as a result have one of the richest histories in financial services. But the experience of banking has changed significantly over the past few years.

Not so long ago, banking was an in-person, face-to-face experience that revolved around the physical branch. Today, most customers prefer to bank remotely, through websites and mobile apps. Many banks have invested in digital transformation and see it as important component of their continued success, but are all banks doing enough?

For the past two years, FIS has added a survey of leading bank executives to the annual Performance Against Customer Expectations (PACE) study. This year we saw a marked increase across banks of all sizes in prioritizing modernization, and more than two thirds (68%) of bank executives said they believe digital transformation is extremely important to their overall strategy. While larger banks tend to view modernization as a more essential part of staying relevant than smaller banks, knowing when to make the investment can be a challenge for any bank.

I often talk to clients about modernizing the customer experience and when I ask those who aren’t planning to change why that is, the answers are similar. Their customers aren’t asking for anything more; transformation is expensive; and there is a degree of “fear of the unknown.” I contend that the cost of not changing is great, and the investment needed to make a significant change can be much less than these banks may realize.

The banking customer is changing, and I don’t just mean demographically. We can all agree that younger customers are more digitally inclined, but even the more mature, more traditional community bank customers want more options when it comes to banking. In our latest PACE study, we found that only 67% of customers are very satisfied with the experience their bank provides. And when we dive deeper into demographic segments, the top three pain points of baby boomer customers (52-72 years) are: finding the time to visit a branch; getting info without having to call or visit a branch; and the accessibility of online and mobile banking.

Open APIs are a time- and cost-effective way to transform your customers’ experience. They enable a nimble and accelerated path to providing new services, such as allowing customers to view their transaction information in a budgeting tool or helping them make automatic savings deposits. Often, the time to implement APIs is only months, and the cost is a fraction of what a major infrastructure change would be. And because APIs are a living, breathing technology, banks can learn as they continue to offer new products and services to customers. It is crucial to have a strong, well thought out API strategy for the best ROI, but this is something a good partner can help you put together.

Making the decision to invest can be difficult for banks, especially when the change feels unknown and untested. Security is a top concern of both banks and customers. It’s a very real issue and cannot be an afterthought. Instead, it must be considered alongside other changes. Banks must take a long, hard look at their fraud and risk strategy and be intentional in determining how it needs to evolve with growth into new consumer segments and changes in services.

Modernization is not just about going digital; it refers to the entire experience a customer receives – whether establishing a new relationship, expanding an existing relationship, or engaging in a service experience with their bank. Local banks have an especially advantageous opportunity to modernize their physical branch so that it feels like an extension of the virtual experience and connects with customers in a new way. One of the most immersive examples of this we see in market today is the Capital One Cafe. These “coffee-shop banks” offer customers a place to do work and bank in a more casual atmosphere.

With an established customer base that is slowly aging out service, banks must consider their longer-term growth strategy. Customers who used to prefer going into a branch and speaking with a banker are being replaced with those who prefer digital interactions and want those in-person experiences to pick up where their digital experience left off. There will likely always be a need for branches, but banks must look at their changing customers and begin to adapt or risk missing out.