For every financial services provider operating today, digital technologies and channels are a key part of the mission to deliver the highest possible standard of customer experience.
Digitization brings huge opportunity, not only to maximize availability and convenience for the consumer, but also to streamline processes, reduce costs and enhance efficiency for the bank.
As this trend continues, financial institutions (FIs) should be anticipating the potential challenges inherent in digital transformation, and looking for the most effective ways to overcome them.
Digital transformation is a concept that has revolutionized practically every aspect of life in the 21st century – not just banking and financial services. The World Economic Forum has called it the Fourth Industrial Revolution – a phenomenon that will “fundamentally alter the way we live, work, and relate to one another”.
For FIs, one of the practical realities of the digital revolution is that customer demands for speed, convenience and accessibility of services is higher than ever before. And it seems that many providers are not entirely confident they are doing enough to meet these expectations.
In a KPMG survey of bank chief executives in the US, 59 percent of respondents said they are not leveraging digital technologies to connect to their customers as effectively as possible. Complexity of implementation (31 percent) and lack of available budget (25 percent) were identified as the biggest barriers to introducing new technologies.
The research offered some encouraging findings for the future, with 80 percent of CEOs set to increase investment in digital transformation. More than half (53 percent) viewed technological disruption as an opportunity rather than a threat.
As far as particular technologies are concerned, 64 percent of respondents said they would be investing more in areas such as data and analytics, process automation, cognitive technologies and blockchain. Improving customer engagement and experience is one of the key goals of these investments.
Brian Stephens, national leader for banking and financial services at KPMG, said: “In order to keep pace with the expectations of today’s connected consumers, banking leaders realize the need to digitize the entire enterprise – from the back office to the front door.
“They are up against some stiff competition from the fintech startups and retailers, and need to be able to offer their customers a much more personalized and mobile experience.”
Overcoming the obstacles
As highlighted in the KPMG research, there are some big obstacles to universal digital transformation, so what should FIs do to overcome them?
Firstly, there should be clear leadership from the very top of the organization. Leaders must have the necessary knowledge and skills to plan and execute an effective digital strategy. They should also take the lead in adopting digital-first attitudes and processes, sending out a message that will disseminate throughout the business, all the way to the teams and individuals on the frontline of customer engagement.
In an interview with McKinsey, Jurgen Meffert, co-author of ‘Digital @ Scale: The Playbook You Need to Transform Your Company’, said having a clear idea of what digital really means for your industry and your company is the first step to a successful digital transformation.
The next steps, according to Mr Meffert, are urgency, appropriate planning and recognition of the current organizational setup and how it needs to change.
It’s crucial for digital transformation initiatives in the banking industry to be enterprise-wide efforts, with all stakeholders, decision-makers, team leaders and frontline staff committed to the project. Combined with a willingness to invest in next-generation technologies and services, this can help to ensure that your customer experience is the best it can be and your business is prepared for the future.
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