How far along your digital maturity are you? Find out now by trying our free digital banking maturity assessment tool, created in collaboration with Forrester, by clicking here.
You can also find out more about the steps you can take in digital transformation at your organization by attending our upcoming webinar session on “Design, build and launch a digital bank in one year,” taking place on Tuesday, October 19 at 1 PM, during our 2021 SBS Summit.
It’s been clear for some time that customer expectations have been changing. Exposed to hyper-personalized products from tech giants, such as Amazon and Netflix, consumers across all industries have been demanding a similarly high-quality, digitally advanced service. And banking is no exception.
In order to meet these heightened customer expectations, banks will require a bold new operating model, one that’s not only capable of delivering cutting-edge digital products and services, but also capable of seamlessly integrating with a rich ecosystem of players from across the financial services spectrum.
However, it would seem that – at the time of writing – just a small group of banks are on track to becoming future-ready.
Below, we’ve outlined five key steps that are essential for banks wishing to have a well-rounded operating model.
Strategy. Required to lay a strong foundation, and for banks to set off in the right direction. The buy-in of senior leadership is crucial as a bank has to set out their transformation agenda first.
Culture, talent and skills. Banks that fail to shift their culture will not succeed. One of the hardest steps to achieve, it’s vital for banks to set expectations and start to tackle skills gaps sooner rather than later.
Ecosystem engagement. Collaboration, APIs, developers and third-party engagement sit at the heart of future business models, and existing delivery models.
Process and structure. Together, process and structure formalize the operating model to drive forward change, and evolve during transformation. Both are needed for success, but can be worked out during the journey.
Technology and integration. Technology and expertise can be bought, hired or used as a service so – despite its obvious importance – technology is the final priority. This also reinforces that digital transformation is not just about the technology.
Achieving these steps is, however, easier said than done.
For a start, pivoting internal cultures so that banks are ready to improve their digital capabilities can take some effort, and there’s no silver bullet. Large banks, in particular, are often burdened with siloed departments within the organization, as well as traditionally minded employees. Shifting these models so that the large banks are not just open to the idea of digital transformation, but are also prepared to work hard to achieve it, can be a challenging ask.
Likewise, the core systems many banks are operating off are inherited from the 1970s and ‘80s. They are therefore difficult to bring up to speed, and not fit for purpose in the era of open finance. Furthermore, their maintenance can sometimes account for 90 percent of technology budgets, driving key resources away from digital transformation.
There’s no simple solution to these issues, but a strong roadmap in place will be required to map out the journey toward ensuring the five key steps mentioned above are met. Such a roadmap needs to consist of meaningful releases that deliver value, not only to the customer but also to the bank.
This type of roadmap will need to be planned out in detail, often with the help of an experienced and trusted partner. Of course, exactly what that roadmap looks like will depend on how far along their digital maturity a bank is.
How far along your digital maturity are you? Find out now by trying our free digital banking maturity assessment tool, created in collaboration with Forrester, by clicking here.
You can also find out more about the steps you can take in digital transformation at your organization by attending our upcoming webinar session on “Design, build and launch a digital bank in one year”, hosted during our 2021 SBS Summit.