The Digital Transformation of Financial Services

October 21, 2020
The Digital Transformation of Financial Services
There is a difference between looking digital and being digital. Being digital means putting in place a culture that is able to move at the pace of digital (i.e., fast).

Many financial services firms are already engaged in digital, but not all of them have fully embraced digital. “Almost half of the global financial services organizations are still in a very early or even immature stage of their digital transformation journey,” Juergen Weiss, Practice Vice President at Gartner, stated in a Gartner blog post.

In this article, we’ll look at several components that are needed for a financial services firm to truly transform themselves into digital.

Employee Involvement

Being a digital firm is more than leveraging digital technologies for service delivery and customer interactions. The firm must be digital through and through — from its executives to its interns. Such a feat cannot be accomplished without employee involvement.

How involved employees are will depend on how serious they think the company is about its mission. This kind of subjectivity is wrapped up in the culture. A company’s culture dictates how involved employees will be in coming up with new ideas and feeling they are part of the mission. Culture also influences how employees interact with customers.

“It's the hardest thing to get right but it's also got the highest leverage," ANZ's Group Executive of Digital Banking, Maile Carnegie said to Bluenotes. “The highest return on investment is getting that culture right."

If a firm wants digital in its DNA, it’s people, operations, and customer interactions need to fully embrace the digital experience.

Digital delivery and the use of digital technologies are just facades that make a firm appear to be digital. If a firm wants digital in its DNA, it’s people, operations, and customer interactions need to fully embrace the digital experience.

Culture Shift

Culture becomes ingrained in a company over the years. It is put there intentionally or through neglect. Either way, culture exists, whether good or bad.

Changing a culture is like changing the direction of a very large ship.

Digital moves fast. Those who are able to take advantage of technological advances have a higher probability of remaining ahead of the competition, whereas those who haven’t fully embraced digital are more likely to find themselves playing catch up.

Changing culture starts with execution from the top. Executives must be clear on their vision and mission. If the vision and mission are not clear, employees will have a difficult time buying into something that isn’t understandable or meaningful.

An aligned culture allows firms to fire on all cylinders. Everyone is on board with the mission and executing that mission to the fullest. This kind of enthusiasm certainly displays in interactions with customers. Employees are more sincere in their responses and knowledgeable about the company’s products and services.

Just as it can take years for a company’s culture to develop, it can take time for the culture to change. Too many factors are involved to know how long but following the above guidelines will ensure a company is on the right track to positive change.

Agility Means Communication

Keeping up with the pace of digital is only possible when communication throughout the company is efficient. When teams are siloed away, the flow of information between those teams is hindered. Information needs to be made readily available and democratized. This also means eliminating tribal knowledge where key information exists only in the heads of a headful of people.

Not Afraid to Take Risk

There’s a difference between taking risks and taking calculated risks. Taking risks means pushing the limits but it doesn’t have to be done without thorough research and analysis. Understanding the risks involved gives companies more confidence in how to mitigate those risks while pushing forward.

Financial services firms can remain competitive through better collaboration across teams and using the mountains of data available to them to make data-driven decisions.

Regulations imposed on financial services firms can make it difficult to take risks. However, nimble fintech are moving ahead without any regard for the constraints faced by financial services firms.

Pushing the envelope and taking risks helps firms remain prepared for digital disruption and higher employee retention.

The Customer Experience

The digital customer experience in real-time and involves the customer far more than that of traditional customer engagements. Customers should expect that they will be able to interact with a customer service person no matter how and when they choose to engage a company. This means through social media, chat, email, and phone.

Firms that aren’t set up to interact with customers through the customer’s channel of choosing are shutting the door on growth. Customers have become accustomed to multi-channel customer service. They also don’t want to wait. On-demand, real-time customer service is no longer an option. It is required.

Being a digital financial services firm means ensuring people have access to one another without any friction. Such an environment requires a culture that values the input of its employees. It also means the company is not afraid to take risks. In the current environment where fintech can move virtually unrestricted, taking risks is a necessity for remaining competitive.

Acknowledgement: Sources are provided for informational and reference purposes only. DeWitt has no vendor affiliations, offers no products, and has no conflicts of interest.
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