Alex Jimenez is lead principal consultant at Backbase. With more than 28 years of experience in banking, he’s held various roles, including strategic planning, payments, digital banking, operations, program and project management, business process improvement, marketing and voice of the customer.

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The most transformational technologies all focus on one thing: simplifying the user experience.

Whether it was combining several different hardware devices that many of us used on a daily basis into one, or making it possible to get a ride to the airport with the click of a button, Apple, Uber and other businesses all changed the trajectory of their respective sectors by embracing a human-centric design. They knew how to take advantage of new technology to challenge legacy incumbents and steal market share by building for tomorrow.

The same is true in the financial sector. Digital upstarts moved quicker in capturing the shifting consumer demands. Now, it’s clear online banking is the future, with 48% of banking customers using a mobile application to manage their accounts, according to an annual survey by the American Bankers Association, the most prevalent engagement method for the fourth year in a row.

While banks and credit unions are delivering new digital applications, they’re forgetting about the customer experience. Phrases like “customer centric” have been vastly over-used. But the reality is that many leadership teams still don’t understand the evolving nature of this term — and what it actually means in this new era. To be customer centric requires a fundamental shift in the role of IT in the business. Technology is no longer supporting the business model — it is the model.

But unlike the IT transformations of the past, which were characterized by massive, multi-billion projects that took several years to complete, building the foundation to support this will be achieved gradually. Using an iterative approach to modernization, companies can simultaneously (and cost-effectively) ditch their old technology, while staying at the forefront of innovation.

This is the only way to truly drive operational excellence.

Innovation is alluring, and the past is sticky

Too often, banks modernize with the “right now” in mind. They want to quickly deliver a product to meet a customer demand or capture a new market opportunity. It’s why, in many institutions today, there are a massive amount of applications, all handling discrete functions. And only a limited number actually work together on the back-end.

All of this results in a disjointed experience for users. Onboarding as a new customer, applying for a home loan, setting up an account for a family member; each one of these critical processes runs as its own silo. It’s why it’s still common for users to have to provide information several times in the course of trying to get help, or why they have to remember several different passwords for different applications handling lending, investing and other functions.

Those financial institutions that are able to deliver seamless interactions through all the different touch points will capture the most market share. And they’ll be able to more quickly use data and artificial intelligence (AI) to stand out in an industry that often struggles to offer truly differentiated products.

Here’s how credit unions, community, regional and even large financial institutions should shift to an engagement operating model to survive in this new world of banking.

Step 1: Don’t invest any more in legacy infrastructure.

It sounds simple enough, but for many organizations, their core operations are supported by technologies that might date back to the 1980s. There’s immense fear that moving away from tools that have served the company well for so long will inject new levels of risk and introduce new IT challenges. This is a natural inertia, but a roadblock that companies will come to regret.

These systems require billions of dollars in investment every year to stay operational. To put it bluntly: Investing in legacy infrastructure is akin to burning money. All new workloads must be cloud-based. And the priority must shift from propping up old systems, to transitioning to new, modular applications that run on one common foundation.

Step 2: Invest in the future-proof foundation

As banks and credit unions look to link these discrete digital touchpoints together, they need to unify the different channels on one platform. This builds a deep connection between the various applications, enabling organizations to begin to craft more seamless orchestration journeys.

With this strategy, financial institutions begin to take a modular approach to IT upgrades. When a new technology is needed, it can be easily connected to the underlying platform, as well as the other applications, with reliable and secure integrations.

This is why choosing open systems is so important, as it makes it much easier to build and manage this intertwined architecture. And once it’s built, an open foundation makes it easier for banks and credit unions to then quickly plug this platform into other technologies, extending the value the systems provide and helping get innovation to customers faster.

Step 3: Connect the business and IT

Instead of trying to use a one-size-fits-all software program, this foundation lets institutions more confidently adopt specialized tools that solve their discrete set of problems. And they can deploy these solutions without injecting new infrastructure challenges that will eventually also have to be addressed.

But success in these efforts is only possible if the new digital systems coming online are addressing key customer complaints or new market opportunities. Only those closest to the functions themselves will understand those pain points and the areas of potential growth.

It’s why the technology estate must be co-owned by both business and IT. This will help ensure the bank or credit union’s digital investments are aligned with the broader goal of delivering seamless, dynamic and personalized customer experiences.

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Ultimately, this transformation will be a continual learning lesson. It’s why a culture of experimentation is so important. Institutions must embrace a ‘test and learn’ culture, where controlled risks are encouraged, and issues are addressed quickly.

By combining this mindset with a more flexible and performative foundation, banks and credit unions can achieve the operational excellency required to deliver the experiences customers expect.