With banks, insurers and wealth and asset managers spending tens of millions of dollars on digital transformation programs, there is mounting interest in how they have managed success and the creation of value in vastly complex environments.
According to a new commissioned study conducted by Forrester Consulting on behalf of Ernst & Young LLP (EY), companies deploying broad-based, customer-centric approaches generate the greatest value and maturity relative to their overarching digital enterprise transformation efforts. The research suggests digital leaders know how to create a customer-centric approach that focuses on innovation and increasing revenue.
Leaders demonstrate an unrelenting focus on customers, innovation and responsibility
The survey of nearly 250 senior-level executives in North America-based global financial services firms underscores the commonalities digital leaders share: multi-dimensional focus; customer-centricity; clarity of responsibility and an unwavering commitment to talent. In fact, digital leaders focus on innovation (65 per cent compared with 32 per cent of laggards) and keeping up with changing customer preferences (48 per cent compared to 35 per cent of laggards).
“An unrelenting focus on the customer allows companies to innovate while satisfying customer needs and meeting financial criteria like increasing revenues and profitability, plus driving robust, sustainable growth,” said Yang Shim, EY Americas advisory data and analytics leader for financial services. “The performance gap is huge between companies that take a more comprehensive and customer-centric approach to digital enterprise transformation and those that focus solely on cost reduction.”
Successful transformation and innovation is achieved by an organization’s ability to adapt and link efforts
Digital leaders employ a holistic, adaptive approach to meet evolving customer, marketplace and regulatory needs. The study found the most advanced digital organizations foster a symbiotic relationship between digital transformation and innovation: companies at the forefront of transformation create defined, repeatable and scalable innovation processes (83 per cent), while laggards use a more fragmented approach with no formal coordination or mechanism to scale transformation.
How do leaders drive innovation throughout? Accountability, coordination and metrics: 84 per cent appoint executive authority and create a separate budget to drive innovation; 75 per cent have a federated team that works across all innovation teams, which creates direct accountability; and 88 per cent identify and implement a way to measure innovation.
Technology continues to fuel digital transformation, but the workforce creates the competitive edge
While both leaders and laggards recognize the need for customer satisfaction – both groups ranked it a top-three priority over the past 24 months – leaders stand out by recognizing the need to equip employees with the right tools, facilitate collaboration, and balance internal and external talent to accelerate innovation. Both groups also plan to focus more on improving efficiency and productivity and implementing new ways of working. This overlap indicates a clear path forward for financial services organizations regarding the need to prioritize people – both inside and outside the organization.
“The research confirms that why companies seek digital transformation and how companies achieve it are equally important. While having access to information is important, if companies do not arm their workforce with the right tools and insights to enable employees to make impactful decisions, they will be at a huge competitive disadvantage” added Kevin Koenig, EY Americas advisory data and analytics leader for insurance. “The returns on digital transformation investments reflect the complex links between customer, innovation and other drivers. The broader the transformation strategies and the more holistic the approach, the bigger the payoff is likely to be.”