As more and more customers seek competitive digital banking solutions, financial companies must be ready to develop innovative solutions to provide for these customers.
The journey toward digital transformation is one that needs to be started as soon as possible or financial companies risk being beaten by the competition, dropping off the radar in the industry, and losing their bottom line.
When this transformation is done correctly and well, the company, customers, and overall society can experience significant benefits.
What Is Digital Transformation and Why Does It Matter to Financial Companies?
Digital transformation can be defined as the process of adopting digital technologies to modify existing or create new business processes, company culture, and customer experiences to match the ever-changing requirements of the business and market. This reimagining of a business in this growing digital age is digital transformation.
Digital transformation will go beyond traditional roles like customer service, marketing , and sales. It begins and ends with everything surrounding your customers. You have to rethink how you do business, in addition to how you engage your customers.
By doing everything digitally, from planning and building, you will set yourself up to be flexible, agile, and ready to flourish in the future. You can also expect a much higher ROI over the next few years once you execute your digital transformation strategy successfully.
54 percent of financial services firms have started the development of a digital transformation strategy, whereas 68 percent have actually developed their strategy. However, only 14 percent of financial services companies are working to implement their digital transformation strategy.
With consumers becoming more digitally savvy than ever before, financial companies must be ready to step up their game and meet the demands of this new type of consumer.
Real Cases of Financial Companies Going Digital
On average, 70 percent of companies who attempt digital transformation fail. It is not easy, nor is it an overnight feat, to begin the merger of your physical and digital components in an effort to address new consumer needs.
However, it can be done, and these financial companies are proof.
Based in Singapore, DBS Bank was the first to launch a digital-only bank. At the beginning of their journey, they knew they needed to focus on three essential elements:
- How they digitized to the core
- How they could embed themselves within the customer journey and push customer-journey thinking within the entire organization
- How they could change the company’s culture to not only make it feel, but also operate, like a startup.
DBS Bank knew they wouldn’t get far if they focused only on the actual digital processes and set the necessary organizational change on the back burner.
They spent the initial years of their digital transformation setting up the groundwork for their future implementation, including the placement of common platforms that worked with all of their banking locations.
This allowed them to start thinking about how to become nimble, boost speed to market efforts, and increase their pace.
They developed some helpful acronyms that aided in the entire organization getting onboard with the digital transformation.
- RED – Respectful, Easy to deal with, and Dependable—all related to the customer service aspect
- ATE – Acquire, Transact, and Engage—customers do all of these things digitally
DBS Bank ensured their team had clear missions to work around and towards. In the end, they found scalability, speed to market, experimentation, and more. One example of their success was the mobile bank offering in India.
DBS Bank wanted to scale their presence in India, as they had limited branches in that area of the world. With so many people in that market, they had to figure out a way to reach them all. And that’s when they developed a mobile-only option.
They learned as they went, tested and learned, tested and learned some more, and finally found success with their mobile launch in India.
ING Banking Group
The approach ING took toward digital transformation allowed them to improve time to market, increase productivity, and boost employee engagement.
They began their journey in June 2015 by implementing an agile way of working. They saw that the behavior of consumers was changing, and they knew they needed to figure out a way to adapt to this or otherwise get left behind in the industry. They realized that thinking traditionally wouldn’t get them far, and instead, they needed to fully understand and focus on the customer journey in a new Omnichannel environment.
The company boasts their transformation success on four pillars that they used to develop and implement their strategy.
- An agile way of working – this led to all of the company’s employees, regardless of department, working together in a swift, efficient manner.
- Organizational structure – With any transformation, there is change that must be dealt with. This includes new roles and governance. Agility is hindered by having different departments and managers in place, so they managed that.
- DevOps and IT delivery – They worked on going live with their new releases more frequently (every two weeks as opposed to every couple of months). Integrating IT and product development operations helped ING position themselves as the main mobile bank within the Netherlands.
- New people – The company focused on how all employees dealt with the knowledge they were equipped with, rather than assigning status and salary based on the number of employees under them or the size of individual projects they worked on. ING wanted to ensure that there was a decent mix of expertise and knowledge throughout.
ING’s primary objectives were to increase employee engagement, be quicker to market, reduce handovers and impediments, and improve the overall client experience. They were successful in all respects.
There are indeed obstacles that financial companies face as they embark on a companywide digital transformation, but in the end, you can expect your business to be far more innovative and employee-engaging while also increasing the offerings available to your customers.
When you invest in digital transformation, you are investing in your company and employees to be adaptable, agile, and competitive.