“Digital transformation” is fast becoming a buzzword in our daily business interactions. The Massachusetts Institute of Technology (MIT) recently defined the phrase as “the use of technology to radically improve performance or reach of enterprises.”
Digital transformation is reshaping the world of banking.
Digital technologies—and how we use them in our personal lives, our work interactions and within the larger society—continue to change the face of businesses worldwide. The financial services industry, in particular, continues to undergo dramatic digital disruption. In the world of digital banking, legacy business processes and technologies may no longer be enough to meet future business needs or the expectations of your staff and customers. Although you may be just beginning to discover what digital transformation means to your organization, other financial institutions have already begun digitally transforming the way they do business.
Once you identify the most pressing pain points in your business and develop a plan for your digital transformation, you must align your organization. This means putting together your cross-functional dream team and obtaining executive sponsorship. Only then will you be ready to execute your plan.
To help ensure your success, here are five common mistakes to avoid when implementing your digital transformation strategy:
Thinking digital transformation is a solution and a product implementation.
Does this sound familiar? “We have a digital transformation strategy at our bank and are implementing a new mobile banking remote deposit feature.” While you may be improving a business process or a customer workflow, you need to think of your actions in a broader sense.
Ask yourself these questions:
- How can your team’s efforts help your entire organization?
- Can the technology you use in your initiatives be a platform leveraged by others in your business?
Consider sharing ideas and resources to reduce duplication of effort. For more information on how to view the bigger picture and take your organization’s digital transformation strategy to the next level, download the white paper Banking on a Digital Future: A Guide to Digital Transformation in Banking.
Allowing compliance and regulation to get in the way of change.
When organizations start implementing innovation initiatives, many stop and then move in the opposite direction at the first sign of compliance and regulation barriers. Have you ever worried that a project will not get past your risk management group?
A recent publication by the Office of the Comptroller of the Currency highlights some of their more receptive views regarding “responsible innovation.” By and large, the main regulatory agencies have shown openness to innovation in the banking sector, adopting a pragmatic approach to mitigating the risk of “unintended consequences” associated with digitization, technology, and innovation. Internal and external business partners that have similar risk-mitigation experiences are great resources you can leverage to finalize your digital transformation strategies.
Failing fast and then “not” moving on.
Let’s face it—not all ideas, pilot projects and proof of concepts under the digital transformation umbrella can be considered successful. In fact, with many digital initiatives, the white flag should have been waved long ago, and organizations should just move on. Although this is a difficult reality for some businesses to face, the essential point here is to analyze, reflect, understand and learn from your failures. It has been well-documented in financial industry news that banks have taken a page from the startup world by setting up technology labs, incubators and innovation centers to explore and test new ideas. These experiences, whether positive or negative, can then be applied to increase the odds of success in multiple areas of your organization. Here are some uses cases that will get you thinking about digital transformation and how the initiative may apply in your business.
Not changing the way you measure success.
During a recent Document Strategy webinar, the audience was polled on the following question about measuring success: “How are you measuring your digital transformation results today?”
Fifty percent of respondents selected the following response: “We already have dashboards and/or analytics systems implemented that could measure our success.”
This response seems counterintuitive, as many interesting, relevant and game-changing data points and metrics become readily available when businesses transform their processes digitally. These new metrics can enhance the accuracy of your Key Performance Indicators (KPIs) and may provide you with better business insights. It is always a good idea to compare your current analytics systems with these new data points to understand what data can help move your business forward. Using new data elements to enhance your existing KPIs can be a game-changer for your digital transformation strategy, including analytic capabilities.
Concentrating efforts on a subset of your customers.
Millennials, mass affluent and the underbanked: these are just some of the terms we use to segment our customer base to better serve their financial needs. Although segmentation is vital to predicting common needs and patterns of customers and understanding consumer differences, your digital transformation strategy should strive to improve the experiences of all customer segments your organization serves. Keep in mind that by focusing your reach on a certain customer segment, you may unintentionally underserve other key market segments.
Take your next step to digital transformation.
By avoiding the five common digital transformation mistakes covered in this blog, you can plan and implement a digital transformation strategy that suits your specific business requirements, increases your organizational efficiency and reduces operational costs.
Find out more. Download your free copy of Banking on a Digital Future: A Guide to Digital Transformation in Banking.