A new thought leadership piece produced by Roubini ThoughtLab outlines the steps financial services institutions need to take if they want to be digital leaders in the space.
The path to digital leadership was produced in conjunction with a series of companies including Cisco. Roubini ThoughtLab staff surveyed 1,503 providers from around the world and conducted 42 interviews with senior executives from financial institutions, consultancies and technology firms.
Times have quickly changed. Only last year 24 per cent of CEOs said digital transformation was unimportant or only slightly so. This year 96 per cent view the process as central to their business.
Essentially all companies (99 per cent) said they are engaging in digital transformation, with one quarter at the beginning of the process, almost half transitioning and the remainder maturing. By 2022, 20 per cent expect to be digital leaders and 47 per cent plan to be digitally mature. Digital maturity is a four-stage process starting with thinking about the process and the business case, putting a plan in place and beginning digitization, continuing digitization and finishing as digitally transformed with integrated systems and strong digital channel growth.
Cisco global director of consumer industries and industry solutions Jason Bettinger said the report is a great validation of a few areas Cisco focuses on when considering a company’s digital transformation. Those include network modernization, cybersecurity integration, workforce enablement and driving a cloud strategy.
“We help companies define their situation as it is before helping them identify capabilities that allow them to progress up the map,” Mr. Bettinger said.
Those steps help banks develop responsive branch models even as that definition changes. More customers view their bank as invisible because they don’t have to interact with them as much after they open an account as they used to.
Cisco considers several factors when they help a financial institution assess its branch strategy, Mr. Bettinger said. The first is the existing network footprint. How many locations do they have? Where are they? What services do they provide? Branches can be uniquely designed to meet the needs specific target segments.
Before taking any actions institutions must carefully consider their cost and balance that against expected revenue and savings. Key to that process is the assessment of staff capability now, what it will have to be in the future, and how wide the gap between the two is. Careful consideration also needs to be given to how to integrate the branch with other channels.
Technology is, of course, the important factor, Mr. Bettinger said, citing Cisco’s partnership with Apple that sees bank associates accessing enterprise applications on their mobile devices to drive interactions. Banks need to provide an omnichannel experience so customers can finish an application process via email or access video links. For more lengthy and detailed processes like mortgages, responsive institutions have a “room” within the application where a bot can assist with activities such as portfolio management and signature collection.
The report outlines seven characteristics of digital leadership:
- A digital vision and business case
- A cogent digital transformation plan
- Innovative culture
- Customer-centric mindset
- Agile product development process
- Early adoption of advanced technology
- A digital team to drive change
If you plan on being a digital leader you better have strong security measures, Mr. Bettinger cautioned. The digital experience brings more entry points and links that have to be secured and the failure to properly do so can cause the unprepared to fall behind.
And it’s not enough to have a plan, Mr. Bettiger added. Forward-thinking organizations have separate budgets for maintenance and innovation and have the right parties at the table when planning a strategy.
“Even when companies have a three to five-year plan, often they are not integrated with the IT plan,” Mr. Bettinger said. “The critical piece is having liaisons between IT groups and the business areas.”