DIGITAL TRANSFORMATION FEATURE NAME
IBS Journal March 2018
33
Four key success factors to designing a digital-ready bank
Every digital transformation is looking to address a fundamental shift, both from the customer’s perspective, and also with the internal processes and organisational models. What are the elements that differentiate a robust design of a digital-ready bank against others?
V. Ramkumar
Senior Partner, Cedar Management Consulting International LLC
W
ith so much being said, written and debated about digital journeys and transformations and the benefits they drive, the question that still deserves an honest
answer is this: do all digital transformations programs necessarily result in achieving their intended goals? There are several global banks that have suffered from, or are being challenged by, the growing expectations on digital performance that are simultaneously also constrained by ground realities. When digital banking does not necessarily drive customer satisfaction, more often than not there are a few obvious – but addressable – reasons that are key to look out for.
The estimated spend on digital transformation globally is expected to grow to $2 trillion in the next three years, even if we reckon that only 20% of that is in the financial services space. In all fairness, the digital transformation journey cannot be principally different from any other transformations if one looks at it from the lens of its ultimate objective of driving change, and therefore the success factors that are embedded therein can be quite similar too. At the same time, there are dimensions that can be quite different from other transformations that need to be borne in mind – an example of this being NAB’s decision to reduce 6000 roles (source: IBS Intelligence, November 2017) as they automate and simplify the business model, even while 2000 new jobs are being created to enable the workforce to deliver the 2020 plans. Now those kind of dual hire and fire approaches are somewhat unprecedented, and that’s where digital transformations need to be dealt with differently.
So what are those key questions, whose definitive answers can stand the test of a digital banking transformation? Here are four key success factors that are aligned with the Balanced Scorecard framework that we at Cedar-IBS believe are critical for any CEO if the bank is on a digital transformation journey.
1. Are customers getting a new, fresh and differentiated experience?
If more than 80% of the mobile penetration is likely to be smart- phones in the next three years, and customers are looking to get all their banking at their fingertips (pun intended), then it is not about just offering that service to the customer that makes you the bank of choice, but being the most interesting, differentiated and intuitive service provider that gets the customer’s attention. Getting the right “Design Thinking” with simplicity at the core of the services model is the key success factor here. For instance, when an app is used to convert your phone into a bar-code reader that automatically charges
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