A few years ago digital footprint for an organisation was good to have, but today, digital is unavoidable. With the proliferation of channels, increase in usage of these channels across various demographics, and transformation of businesses keeping in mind the tech adoption forced by device manufacturers, the expansion of cloud technology across all spheres of operation, and the need to balance increasing demands from customers on one hand, while keeping costs and release times at a low given the frequency of change that digital undergoes, on the other digital banking or banking on the move has already made its impact and going through more innovation. With the customer expecting the same experience from a bank as they would from the retail sector, banks have to step-up their digital game in order to continue being of service to their customers. Here is a digital checklist for banks to implement a successful digital transformation:
Preparing the organisation for the transformation
To go digital, it is essential that the entire organization – strategy, operations, training, and communication – be digital in nature, and not just make digital into a tactical move involving few departments or projects. It is essential to crystallize the bigger picture right from the beginning and break down the vision into missions to be accomplished over the years. A recent survey even indicated that more than 42% of its respondents weren't clear about the digital transformation/strategy in measurable key performance indicators. Since the talent within the organisation are the prime enablers of any digital goal, it is essential that they are in tune with this strategy.
Competency & people – vendor competency, internal skills training
Digital transformation necessitates internal reorganization and assimilation of new skills in order to make transition a successful one. At the offset, much of the crucial technology skills might be in short supply, and companies might have to resort to intense short-term training for employees and/or recruitment of specialists on a contract/contingent basis to make up for the necessary skills required during this transition. Skill acquisition and skill upgrade are both extremely essential in order to attract the right kind of digital talent and also ensure that the existing talent is in line with the vision and do not become “irrelevant” in the changing scheme of things. The more ready the talent is to go digital, the more capable they are to assimilate and accommodate new age digital talent and learn from them, the smoother the transition will be.
Collaboration with fintech and other third parties
Fintech is real, it's here, it's disruptive, but it's not going to change everybody's life tomorrow. It's going to unfold over many years in different ways. Fintechs are still tiny when compared to banks. In the lending context itself, while Fintechs have reached a lending figure of billions, the banks often deal in trillions. The basics still remain the same, i.e., you need a bank account to use most Fintech services. Banks know this and hence, they have to and, in fact, have begun exploring partnerships and alliances with Fintech companies, hire talent from outside banking systems and embrace the innovation. In fact, the FinTech companies will facilitate the bank's ability to create more desirable, accessible and cost effective B2B and B2C services. In order to further this collaboration, banks must adopt an API-centric integration model with such third party partners in order to open newer channels to meet customer expectations.
Tools & platforms
It is essential to clarify that having a mobile application does not entail a digital transformation, it is merely a digital channel (a user-friendly front end) to connect with customers. An organization becomes truly digital when the system powering such mobile apps, the operations involved, data processes, etc. become digital in nature. Use of cloud technology to update infrastructure, to scale up technology, to create quicker and more competent bundles, leveraging big data to predict customer behavior and create personalized banking experience, utilizing digital channels of marketing, campaign management solutions, etc. However, experts warn organizations against investing too soon in tools for furthering reach in technologies such as hybrid cloud, IoT, etc., Network instability and daily system outages are the prime challenges banks face, when they add new tools to an architecture that is undergoing transformation. Use of fewer monitoring tools lead to fewer system outages and disruptions of operations. With organizations in a digital mode working on a unified, cross-functional mode, tool consolidation is the key to monitoring cross-functional and cross-domain efficiency, so selection of a single comprehensive tool such as cloud bundle with predictive intelligence, workflow optimization, monitoring tools, etc. can help pave the path to a complete, yet stable digital transformation.
Process – Agile methodology/continuous testing/extent of automation
In the models prevalent today, business provides requirements and come to test for acceptance at the end; in a Digital world, the cooperation needs to be at every stage of the life cycle from requirements to release; Instead of business coming to technology, technology needs to move to business and involve them at validation at every stage of the journey.
The very need to move digital is a response to quicker timelines, better quality, and frequent changes precipitated by customer experience or technology disruption. To ensure the product or service delivery is seamless and uninterrupted, adopting agile, implementing continuous testing/assurance practices along with automation of processes hitherto done in manual mode is essential. While adopting automation too, it is necessary to avoid buying automation tools and suites which require specialized skills and dedicated manpower for their operation and maintenance.
The writer is Vice President, Digital Assurance at Maveric Systems. Views are personal.