The ability to manage our finances online, 24/7/365, is the new normal.
The rate of digital transformation has escalated beyond all measure over recent years, encouraged by a combination of the huge success of online-only challenger banks, technology becoming ever more sophisticated and the impact of the Covid pandemic, which saw the globe’s population becoming ever-reliant on digital transactions. Indeed, with branches and call centre closed, or operating a hugely reduced capacity, many people had no choice but to use digital channels during the pandemic – with many never turning back.
The ramifications of this digital revolution continue to be felt to this day.
Even financial organisations that market themselves as being at the heart of the community they serve, and still offer a valuable face to face service, are increasingly investing in their digital channels. More building societies in the UK and credit unions in the US are adding a further string to their bows by offering sophisticated digital channels alongside their branch network and face to face appointments. By doing so, they can continue to serve the customers who value the personal touch, while providing the online functionality that others are demanding.
However, despite the future of the financial services sector arguably being driven by digital functionality, it can still be a big decision to invest in the change.
The decision can be harder to arrive at, and even harder to implement, if there is a lack of internal cohesion. Therefore, let us examine why internal agreement and internal buy-in are vital to a smooth transition to digital functionality.
The importance of a digital mindset
Added to the pressure being caused by the rise of online-only banks and the move to digital channels being escalated by Covid, financial services providers are now under legislative pressure too.
A new FCA Consumer Duty requires organisations to provide better digital banking experiences, part of an overall objective of putting their customers’ needs first.
Against such a digital backdrop, the leadership of financial services organisations across the board have an increased need to ensure their whole organisation has a digital mindset. Such a mindset is an essential tool to ensure the firm benefits from cohesiveness, and a shared vision to successfully implement what are often, especially in the case of smaller, local providers, radically different customer service platforms, and certainly a break from tradition.
Innovation and experimentation
Embracing a digital mindset requires banks, building societies, credit unions and other financial services providers to encourage experimentation.
A key part of this includes ensuring all parts of an organisation can understand what “going digital” means. If there are any concerns, confusion, or doubt, providing practical opportunities to put minds at rest could be a valuable use of time.
Fast-paced, iterative development with weekly or biweekly demonstrations to all stakeholders will go a long way to encouraging their buy in. Indeed, organisations that invest in transforming their culture to embrace agile methods tend to be more successful at digital transformation.
Think laterally
According to research by McKinsey, executives rank siloed thinking and behaviour as the number one obstacle to a healthy digital culture.
However, considering all the disciplines required to design, deliver, run, and continuously optimise digital banking, this is no place for a one-dimensional mindset. McKinsey provides excellent suggestions for breaking down those barriers, inspiring employees with a shared vision, and thoughtfully rotating managers. But even without those long-term measures, a well-crafted agile program should go a long way towards fostering a collaborative, multidisciplinary approach.
Daily stand-ups and regular demonstrations to all stakeholders from risk, compliance, operations, and the senior leadership team help to keep everyone aligned.
The advent of low-code and rapid development also means that it’s much easier to keep stakeholders aligned, with projects taking weeks rather than months or years.
Allowing customers to join the development journey
Financial services leaders should remember that their customers should be at the heart of digital transformation, especially in the case of financial services organisations. In the digital age, being customer-obsessed isn’t just good business practice, it’s more likely to be a matter of survival.
Agile, iterative development and co-creative design thinking and feedback sessions get you closer to your customers and will make them feel like they are a core part of the process. These same techniques reduce the risk of failed experiments, which, of course, result in wasted time, money, and resources.
Instead of months of development in a vacuum and then waiting to see how customers react, customers should form a central part of the design process. The speed of low code also means that developments and adjustments can happen in real time in co-creative feedback sessions.
Encourage a product (rather than project) mindset
Leading IT advisors and industry analysts have long advocated that digital propositions should be managed as products rather than projects.
Transformation is not a build, deploy, and forget exercise. It demands continuing effort to experiment, learn, and adapt to ensure customer needs and preferences are met. That is surely the only way for a business to remain relevant and competitive.
The critical difference can be highlighted by understanding that whereas a project has a start date, a resource plan, a budget, and a delivery date, a program must be a much more open-ended endeavour.
In terms of building or modernising a digital banking solution, if a provider is still thinking of this as a delivery project, they have not yet embraced a digital mindset.
Conclusion
As we stated at the start of this article, the future of financial services is arguably digital. Indeed, it is fair to say that people no longer want digital functionality, they now expect it.
