Francisco González, chairman and CEO of Spanish banking group BBVA states that 50% banks in the world could disappear by ignoring digital transformations and that BBVA will be a software company not a bank anymore by 2020, he points out the disastrously antiquated systems incl. IT systems, "spaghetti" systems totally unable to cope with the deep transformational impacts of digital on banking ecosystem & inability to see competition coming from digital players.

While European clients made contacts with their bank using mobile which is 11 time over that of the internet, in Latin America mobile has overtaken as an interface with bank overtaking all channels being put together. The world is increasingly moving towards a digital path. With over five billion mobile phone users, and data-traffic from mobile growing at an amazing rate of 26 per cent year-on-year, we are at the inflection point of digital adoption. This tectonic shift in consumer behavior demands businesses to increasingly focus on tapping the potential of this market. Unheard were thing like IoT (Internet of Things) which today help us to re-imagine a business through Digital. . Every enterprise wants to strike the next big idea and spend enormous amount of intellectual capital in ideating the next disruption and antidotes for the current disruption. The prophecy of Francisco González at least has got a strong trend towards it

Future-oriented business transformation requires an experience-driven process that moves beyond categories to deliver a meaningful, valuable, and competitive experience to customers. A customer’s best user experience is now the benchmark for all their business interaction. This is so opposed to traditional business transformation processes which are driven by off-the-shelf technology. This leads to an extension of existing organizational silos that separate product and service.  Customers expect an Uber like experience while dealing with their bank - simple and interactive. As customer expectations extend beyond categories, successful solutions must move beyond silos.

The environment it operates in, the devices on which it works, the winning themes - they could all be redundant in a longer time-to-market. Enterprises must hence focus on quick execution of ideas, in stark contrast to how they have traditionally operated. Digital Transformation moves to a different beat as it is in a space where forces driving the ecosystem are in a state of constant flux.

Based on their maturity and commitment banks’ can be classified into three broad categories;

Digital is a project (project by project basis, Pilots and gradual deployment)

Digital is a business (cross functional team mixing IT, distribution and marketing ,Test and learn approach with parallel testing and big bang deployment ,Flexible and agile execution with regular review)

Digital is a core value (Pure digital model, pure player model that accelerates digital transformation, dedicated lean IT)

The third category being on the offensive seeking business leveraging technology by employing agile teams with fast time to market with entrepreneurial mindset backed by web enabled IT teams.

Irrespective of the above approach the organization needs to be anchored by four dimensions namely;

Client centricity (Agile IT organization and cross functional teams studying the customer desires leveraging the power of social media and maintaining live interaction with clients)

Openness to innovations ;Integrating IT and marketing to create an Agile organization that merges client needs with solution delivery at a fast pace

Organizational flexibility ;The proliferation of new technology and faster time to market call for a fundamentally  flexible IT platform that is able to integrate external cloud service .A deep cultural change by integrating the front end and industrializing the back end .In effect a deep rooted cultural change.

Technology centric approach ;Leading banks are creating a smart middleware layer that computes and processes customer and business intelligence with state of art technology and interfaces .Ultimately such middleware will be opened up to third parties.

Looking ahead:

Most banks have started the journey which is still in the mid path. Banks have no time to waste as customer behavior radicalizes on account of technological boom in terms of IoT, spread of smart phones and 26% yoy increase in internet traffic. While today 50% of the phones are smart phones, in 2020 it will be 80%.This makes a strong case for operational agility .Leaders will offer true expertise from highly skilled professional everywhere as banks build a strong digital foundation and launch digital value proposition. While branches may be added by digital players to show case their brand but the overwhelm trend is that of an app focused front end, a central core connected database hosted on cloud and a backend which is industrialized and outsourced.

The inevitable pressure to reengineer the operating models with an end to end process review taking into account proper allocation of both human and technological resource .Rest is what time will tell.