Some banks are not ready to fully transform into becoming a Digital Bank and there are a multitude of reasons why. However, this does not mean that you can’t start the journey without having to invest millions of dollars in a total I.T. overhaul. In most cases, many of the elements banks need to harness the Digital Opportunity may already be in place - what is required is to leverage these better, investing in them in a targeted fashion as part of a structured and strategic journey towards becoming fully digital.
Below I list five simple steps that can help you in your journey towards becoming a Digital Bank
Step 1: Build a Strategy and Work the Strategy
Every CEO I meet has a different definition of what digital means and none of them are wrong. For some, being digital means ‘going big’, leading the way with the first, latest and greatest technology - brash and loud, for others it means small innovations and a more conservative approach. What is consistent amongst all is the need for a planned and properly thought through strategic approach, a road-map that ensures flexibility, agility and a clinical focus on the business case, and customer requirements. Becoming a Digital Bank is a journey where Digital not only means customer-facing experiences, it also means internal processes and systems.
Step 2: Maximise the use of existing technology
One bank I visited recently was flabbergasted when I told them that they are already a digital bank - by some definitions. In this case, the CEO’s interpretation of digital was what I call a ‘Time Square’ approach… big screens, flashing lights and lots of technology - some of which is fit for purpose and some of which are not (which by the way is not wrong). Whilst there are examples of this approach all over the world and, in most cases, the business case for such an investment is brand related. As I explained to the gentleman I met there are many definitions of what being a digital Bank. The ‘Times Square’ approach is only one, and may not always be the right approach.
When budgets are tight and the organisation is risk averse, using the systems that are already in place can help drive business growth. For instance, using data collected from Q-Matic machines to tailor video content in branch - to talk to the customers that are in the branch - can grow revenues but up to 40%. Improving ATM interfaces can reduce customer waiting times and improve overall customer satisfaction. Digitising processes to avoid the use of scanned documents is another way of improving processes and enhancing your knowledge of your customer. Santander in Brazil is a perfect example of this, where they have simplified the car loan application and approval process to a few clicks (that can be completed whilst the buyer is in the car - and now dominate the car loan market there) - all simple, focused innovations that can deliver significant business results without investing millions.
Step 3: Light-touch technology interventions.
Banks can generate significant performance gains with surprisingly small targeted investments, for example, the deployment of tools like e-forms and work-flow systems, that can be implemented relatively rapidly. Sometimes without deep integration into complex legacy architectures can have dramatic improvements in cost-to-serve, speeding up decision making, improving customer insight and reducing manual intervention.
Step 4: Place a few selective big bets
There will be places where Banks need to spend on bigger transformation investments. However, instead of trying to automate every aspect of a process or product, focus on the ones that give the greatest return - do not build a glittering digital empire for the sake of it. As one CEO put it, ‘I want technology that makes my customers and employees lives simpler, I do not want to force them into greater uncomfortable complexity.'
Step 5: Be you. Do not be ‘like’ someone else
I have written extensively about the role of brand and customer experience in banking. Creating a point of difference, occupying and maintaining a unique territory in customers minds is critical. Customers and employees have to associate your bank with something - be it service, speed, luxury, access, internationalism, or something else - it should be something that defines you. Whatever investment you make in technologies you should always consider who you are and what you want to be. Respect your heritage and your DNA whilst evolving in a way that makes the experience of ‘being’ with your bank meaningful, convenient and consistent for everyone.
About the Author
Nicholas Griffin is Managing Director at Principle Global (www.principleglobal.com) Information on how to contact Nick is in the footer of this web site.