From Legacy to Lean: Laying the Strategic and Cultural Foundation for Fintech Transformation
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November 19, 2025
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Today’s financial services industry is in flux, with investor acquisitions of existing banks now outpacing the creation of de novo institutions. This trend isn’t just about financial engineering; it’s a strategic recognition that an established bank, with its existing licenses, customer base and infrastructure, can be a potent platform for innovation – if it’s willing to transform.1
But, how does an organization historically steeped in tradition, bound by regulations and characterized by a risk-averse culture pivot to become an agile, customer-centric financial technology company (“fintech”)? The journey doesn’t begin with code, cloud migrations, or even new products. It starts with something far more fundamental: laying a robust strategic and cultural foundation.
Before a single line of code is written or a new process is designed, the acquiring investors and the bank’s leadership need to collaborate and answer a critical question: what kind of fintech do we aspire to be?
This isn’t a vague aspiration to “go digital.” It requires specificity and trade-offs:
- Are we building a specialized challenger bank targeting a niche market (e.g., small businesses, specific demographics or gig economy workers)?
- Do we aim to become a Banking-as-a-Service provider, enabling non-financial companies to embed banking functionality into their own offerings?
- Will we pursue an embedded finance strategy, seamlessly integrating our services into broader consumer or business ecosystems?
- Is our goal to become a mainstream digital leader, offering a superior, omni-channel experience that surpasses traditional competitors?
Determining a precise vision will dictate every subsequent decision, from technology architecture to talent acquisition. And, the vision will act as a North Star, ensuring all transformation efforts are aligned and purposeful.
Digital transformation is not an information technology (“IT”) project; it’s an enterprise-wide metamorphosis. As such, it demands the unequivocal and ongoing backing of the highest levels of leadership. The chief executive officer, the board and the entire executive team must be visible and vocal champions of this transformation.
This commitment is manifested in the following ways: publicly endorsing the vision and regularly communicating its importance to all employees; dedicating significant financial, human and time resources to the initiative; and proactively identifying and dismantling organizational, political or bureaucratic barriers that impede progress. And, leaders must themselves embody the new cultural values they wish to instill, demonstrating agility, customer-centricity and a willingness to embrace change.
Taking on this change mindset is arguably the most challenging, yet most crucial, aspect of the entire transformation. Traditional banking cultures are often characterized by their aversion to risk, and they can have a deep-seated fear of failure due to ongoing and intense regulatory scrutiny and fiduciary responsibilities. Measured decision-making processes and often siloed departmental structures can have a disruptive effect on innovation, and a tendency to focus on pushing existing products rather than on understanding evolving customer needs can pose a major challenge.
To become a fintech, a bank must strategically pivot to a culture that embraces:
- Agility at Scale: Moving away from rigid waterfall project management to agile methodologies (Scrum, Kanban) across all departments. This means fostering small, cross-functional teams, rapid iteration cycles, continuous feedback and quick adaptation to changing requirements.
- Hyper Customer-Centricity: Shifting the entire organizational mindset to deeply understand customer pain points, aspirations and behaviors. Every decision, product and service, must be designed with the end user’s experience at its core. This involves user research, design thinking and continuous feedback loops.
- Experimentation and Learning From Failure: Changing the attitude toward mistakes so that instead of fearing mistakes, the culture views them as invaluable learning opportunities. Creating a "safe-to-fail" environment encourages teams to test new ideas quickly, gather data, pivot if necessary and iterate toward better solutions. This approach contrasts sharply with traditional banking’s emphasis on perfection from the outset.
- Radical Collaboration: Breaking down the historical silos between departments (e.g., IT, business development, compliance and risk). Fintechs thrive on seamless, cross-functional teamwork where diverse perspectives converge to solve problems efficiently.
- Talent Transformation: Actively recruiting new talent with digital skills, fintech experience and an innovative mindset, as well as investing heavily in training existing employees in new technologies, agile practices, data analytics and customer experience design.
Laying this foundation is not merely a strategic exercise; it’s a profoundly human one. It involves changing mindsets, re-educating a workforce and challenging deeply ingrained habits. It demands patience, clear communication and empathetic leadership.
When the strategic vision is clear and leadership is unwavering, the culture begins to shift towards agility and customer-centricity. It is then that the true work of technological modernization and product innovation can effectively begin. At the end of the day, this foundation isn’t a stepping stone; it’s the very ground upon which a successful fintech transformation is built.
Footnotes:
1: On the continued decline in the number of new bank charters, see Banerjee, Arpita, et al., “Number of new US banks continued to decline in 2024,” S&P Global (March 26, 2025); and on bank merger and acquisition activity, see Purvis, Chris, et al. , “M&A Activity in the U.S. Bank Sector: Challenges and Opportunities Abound,” Cherry Bekaert Insights (June 16, 2025).
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November 19, 2025
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