Nowadays it’s the norm for bank services to be omnichannel, or available through methods other than the traditional over-the-counter means of transaction. Most banks have their own dedicated mobile apps and, if they don’t, at least allow digital transactions through third-party platforms. But there are some noteworthy differences between banks that provide digital services and banks that are, in the truest sense, digitally driven financial institutions. That said, what would it mean for your bank to pursue a full digital banking transformation? What are the goals that you have to chase, and what are the end results that you should pursue?
For key decision-makers like chief financial officers and chief technology officers, here’s a briefer on what to expect when you move your bank into the digital age. Be prepared for some shocks and some major changes to the way you do things—but also some exciting developments that could change your bank for the better.
You’ll Need to Change Your Banking Ecosystem
As stated above, for a bank to undergo a digital transformation, it should do more than simply add to its repertoire of digital services. Some banks assemble their digital infrastructure piecemeal, thinking of each service as nothing more than a short-term solution that can be regularly added on or discarded. But transitioning your bank into the digital age will require you to make long-term changes to your whole banking ecosystem, and not just for one category of services. Oftentimes, it will be a matter of streamlining all services into one cohesive digital platform.
There are definite advantages to this scenario. For one, it will allow different bank units or departments to work in greater synchrony with each other, as well as to see updates from each other in real time. This will eventually eliminate the cumbersome tech-related silos between units and make the delivery of your banking services faster and more efficient. For another, your whole banking ecosystem can benefit from the built-in features of a cloud solution, like comprehensive data analytics, instant financial report generation, and large-scale automation.
Remember that this isn’t the kind of change that needs to happen overnight. It can be part of your bank’s long-term technology vision over the next five to 10 years. But of course, the sooner you become fully digital, the sooner your organization enjoys these special benefits.
You Might Experience Some Pushback Within Your Organization
Change doesn’t come easy, especially if your organization is already used to doing things a certain way. There may be a subset of people who’ll feel hesitant about such a big technological shift. Perhaps they don’t see the point or think that the process of restructuring your tech stack is too expensive or tiresome. They may also nurture some fear of the bank losing its core identity to tech fads.
If you want to take your digital transformation seriously, these are the people you should pay the most attention to. They will also need your full support to navigate life on a new platform. Since some pushback is to be expected, be ready to answer questions and walk your colleagues through the hardest parts of the transition.
You’ll Be Going Head-to-Head with Fintech Companies
Your immediate peers in the banking industry aren’t the only people you have to worry about. If you currently work in a bank, you may already know that you’ve got some stiff competition in the fintech sector. Many customers who would rely on the banking system in the past have since shifted their payment, borrowing, lending, and investing activities on fintech platforms.
For your bank to remain relevant, you must be extra attentive to changes being adopted by fintech players. Avoid the traps of being too complacent or focused on your immediate competitors. To get the leverage you need over fintechs as well as your peers, use your digital transformation to increase trust in your bank. Prove to your customers that you’re still the top choice for guidance and financial security, and reassure them of your commitment to these even as you shift systems.
You’ll Be Working in the Era of Moment-Driven Banking
Last but definitely not the least, you should prepare to accommodate a new generation of customers. Millennials and Gen Z, who grew up with more sophisticated technologies than their parents, expect intuitive, seamless banking services that can help them make moment-to-moment decisions. These include payments for products and services, loan repayments, and investment options for their bank accounts.
Your bank should take a twofold approach to this during its digital transformation. First, you have to pave the way for these moment-to-moment transactions. It’s not just a matter of reducing the physical paperwork that usually comes with opening accounts, applying for loan programs, or availing of investment features. You will need to rethink these processes so that there are fewer steps in general, and so that your customers don’t exhaust more time in getting what they need. Next, you should do more than provide digital transaction methods—you should actively work to optimize each channel.
If you promise your customers quick, efficient, and innovative banking experiences, you win two things in turn. You earn their loyalty, and you also earn their endorsement of your bank to others in their network.
Banks that make this big a shift are often thought of as “disruptors” in the industry. But don’t assume the mantle of a disruptor just for the sake of it. Ensure that your bank’s digital transformation is in line with its core values, which should remain timeless. If the bank’s legacy values and its tech roadmap are in alignment, then you are well on your way to succeeding in the digital age.
Though the journey may be long and not without its difficulties, it will be worth it for your bank. Your organization will need to learn to roll with the shifting tides of the time and technology in order to remain relevant. Full digital transformation is the best way to do that.