Banks have an urgent need to transform for the future, and they know it.

But many still think of those efforts as a means of survival, rather than an opportunity, and that’s a problem. It’s a problem because it means that your desire to transform is not tied to a vision, it’s not tied to a strategy. As a result, many executives err when it comes to taking any kind of real action. They know they need to move into the future; they know that customers demand it; in fact, according to a recent survey Per Alkami, a staggering 65% of those surveyed think that most Americans will consider their primary bank to be one that is fully online within five years, but the “how” is proving to be a big challenge.

This difficulty, while unfortunate, is understandable. Getting to a point where an organization can approach transformation as part of a cohesive strategy is no easy task. It requires incredible leadership and the ability to see things that others cannot. However, it is not impossible. And those who have achieved this tend to have some critical things in common. Based on research conducted late last year by CCG Catalyst, these can be broken down into four pillars:

innovating from the top

Successful transformation must come from the executive leadership team. Executives must be aligned with their peers in the direction of their bank. This requires the ability to prioritize opportunities aligned with the bank’s strengths, as well as the aptitude to rally the troops and engage everyone from leadership to employees to customers.

Building an organization to thrive

Culture is perhaps the most important factor in transformation. Transform the culture of the bank and you will transform the bank. A key lesson in this regard is to ensure that leadership is creating a culture and an organization that is capable of thriving. The ingredients for that include being intentional in hiring and communication, encouraging a fail-quick mentality, and organizing around the bank’s focus areas. In the end, the bank’s mission should be clear on who works there, how they interact, and how they are organized.

Achieve technological flexibility

Technology is the backbone of transformation – it is what drives the speed of change. However, with most banks still running on core systems initially built and deployed decades ago, keeping up can be very difficult, especially when it comes to integrating with new tools and services. As a result, transforming your infrastructure to overcome this legacy technology is a challenge many face. However, technological transformation can take many forms; there is no set way to get to the future in this regard. The goal, rather, is flexibility. That could mean creating an abstraction layer driven by the application programming interface (API) that sits on top of the kernel, doing a full kernel migration, or even taking a whole new approach whereby the bank essentially creates a entirely new and separate entity, usually with a very specific mandate. The exact approach should be determined by the bank’s risk appetite and strategy, always with the lodestar of agility in mind.

Risk and reward balance

Risk is always going to be the proverbial thorn in your side: the biggest hurdle, the biggest hurdle. It hinders alignment and transformation across culture, operations, and technology. It is also critically important and will never stop being so. As a result, institutions need to feel comfortable with it in order to move forward. That doesn’t mean taking outsized risks; instead, it’s about finding more creative ways to think about risk and more accurate ways to assess it. South Dakota-based Pathward, for example, which is known for its BaaS operations, can reach companies that would otherwise struggle to get traditional financing due to its underwriting capabilities, according to president Anthony Sharett. Specifically, he says, the bank can assess a company’s objectives and cash flow at a more granular level, and has worked to understand the nuances of markets that are often underserved, including travel and hospitality, as well as rural communities.

These pillars offer common elements that banks generally considered to be innovative share. And they should serve as valuable food for thought for any bank looking to embark on its own transformation journey. However, it is essential to remember that it is not practical to imitate the success of another. Each bank needs to develop its own strategy, its own way forward. The most important thing though is to remember to think about things positively and proactively. Ultimately, those who have been truly successful in remaking their businesses for the digital age don’t see it as an imperative at all, but see transformation as a way to compete.