'Going digital' doesn't necessarily mean that your business has been transformed. To become fully digital enterprises, companies need to shift the focus inward and innovate the employee experience.
Taking up the digital challenge
Tap “digital transformation” into Google and you’ll get over 12m results – that’s 2m more than when I did the same search back in April. Add financial services to narrow the search and you’re looking at over 4m hits. It’s a big talking point, and big business.
There are a host of associated technologies in the mix – artificial intelligence or AI, machine learning, big data and not to forget ‘robots’ and ‘robo-advice’.
It can sound like science fiction, something of the future, but in truth many of these phrases and technologies have been around for years, and developments in society, digital science and finance have recently reached a tipping point and these technologies
are here for real.
Over the past 12 months, digital innovators, challenger banks and indeed incumbent lenders have started to take up the digital challenge. The FCA sandbox appears to be full of digital toys, some of which will have the sand shaken off soon and appear later
The new kids on the block
The majority of new “challenger” banks such as Atom, Monzo and Starling are digital banks, with no high street presence. And towards the end of last year, Digital Mortgages was launched by Atom, the first of the new kids on the block to offer mortgages.
Atom combines an omni-channel solution to access the intermediary market, with an app for the end consumer engagement. All driven by an automated, workflow powered, digital originations platform. They even have Will.i.am acting as a strategic advisor to them.
The key driver is consumer demand and the driver behind consumer demand is the digital, automated and personalised smart services that are already present in many aspects of our daily home and work lives.
Back in 2014, The Raconteur report Biggest drivers behind digital transformation summed it all up nicely:
“Increasingly, at work, people expect the same slick, powerful technology and the same efficient, flexible methods that they’ve become used to as consumers. In short, they expect to work the way they live.”
Since then there has been a whole host of research confirming the importance of digital in financial services. One, Balancing Bricks & Clicks (2016) noted that 38% of UK consumers now carry out all of their financial transactions online and in an EFMA report
Omni-channel banking: the digital transformation roadmap, when banks were asked the question “What are the most important factors to maintaining customer loyalty and retention for your bank?” 31% said a superior digital experience and 14% said greater mobile
applications. In the 2016 Ernst & Young Global Consumer Banking Survey, 65% of consumers think that having a digital presence is highly important.
So, there's no arguing its importance. But, for a financial services business, what are the objectives for an investment in a digital transformation initiative?
What's the end game?
93% of financial services firms with a digital strategy said it is about improving customer experience and engagement (Deloitte, 2016).
But C level executives often want more and a digital transformation programme is also about:
- Increasing efficiency
- Improving business decisions
- Increasing automation and process efficiency
- Improving innovation
- Transforming the business
For me, the last bullet is key – going digital is about more than technology, it has to be transformative throughout the business. Digitalisation in itself does not necessarily mean your business has been transformed. A true digital transformation programme
touches every part of a business - sales, process, people and technology.
Part two will follow next week - includes "looking in versus looking out" and the "digital nudge"