To survive, banks must go digital

Today, bank’s customers, whether they’re high net-worth individuals or every day, retail investors, demand digital services.

There’s not only a need to be able to check balances and transact online, at any hour, but also a need to be able to do it comfortably, securely, and on a convenient platform and device.

However, not all banks are able to offer that, and despite investing in ‘going digital’, not all financial institutions are able to deliver the right kind of digital services that customers expect.

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 EY, companies that deploy broad-based, customer-centric approaches generate the greatest value and maturity relative to their overarching digital enterprise transformation efforts.

The research suggests digital transformation 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 percent compared with 32 percent of laggards) and keeping up with changing customer preferences (48 percent compared to 35 percent 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 Digital Enterprise Transformation Leader, Financial Services Advisory.

“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 percent), 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 percent appoint executive authority and create a separate budget to drive innovation.

Seventy-five percent have a federated team that works across all innovation teams, which creates direct accountability, and 88 percent 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.