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For businesses to stand the test of time and adapt to the disruptive force of technology and evolving customer demands, digital transformation has become a necessity. Embracing this transformation starts with digitization - a conscious and strategic shift. For organizations in the finance sector, this shift could bring increased savings, a more seamless customer experience, and a more robust competitive edge.
My experience, of engaging various organizations in the financial services (capital markets space) over the last 20 years, there are varying degrees of successes and not so successful examples. Why is it some companies succeed in their digitization ambitions, while many achieve mixed results?
For lasting and impactful change, it requires unwavering commitment to embrace digitization and transforming your organization from the ground up. It also requires a deeper understanding of customer expectations to deliver cross-channel, targeted, just-in-time experiences and maximize engagement.
So, what does it take to accomplish such large-scale and deep-rooted change? More importantly, is your organization ready for digitization and customer engagement? Let’s find out.
There are fintech startups in the lending space that take merely minutes to approve loans for small businesses. A standard bank typically takes 20 days to complete the same process. This contrast summarizes the changing face of the financial sector powered by the force of technology. It also shows how customer expectations are fast-evolving, and tech-oriented start-ups compete successfully against legacy organizations.
Reimagining your operating model is one of the biggest requisites to digitizing your organization. Embed technology at the grassroots and create more flexibility in your tech-driven model. Use modular platforms to adapt to trends and modify your setup quickly. Connect and streamline workflows across your organization to eliminate information silos and create a fully technology-enabled, foolproof foundation for customer engagement.
Digitizing your organization is a long—and often exhausting—process. To maintain the same momentum with which you began, business leaders must imbue “digital-first” thinking within the fabric of their organizational culture. They must build and cultivate excitement for their transformation journey, bringing cross-functional teams together and demonstrating agility in operations.
Digitization can help organizations deliver frictionless, omnichannel, and on-demand customer experiences. But you need a robust infrastructure to make it happen. Embrace agility as a central mindset to work in small teams, lean on automation, and leverage various software (or platform)-as-a-service capabilities to modernize legacy systems, swiftly.
Consistently identify the scope for optimization and build a modular infrastructure with reusable technology. For example, a banking platform can use microservices for different functions like reporting, account management, etc. These microservices are developed and deployed independently, making it easier to maintain, update, and modify them.
Garner in-depth awareness of the customer journey and their interactions with your business across different touch points. Conduct meticulous research to intimately assess customer behavior and design journeys tailored to their preferences using the right technology. Organizations must build more empathy into their servicing and delivery models based on firsthand customer feedback to create trans-formative and engaging customer experiences.
We have summarized the five core factors you need to consider while assessing your organization’s readiness for digitization. Let’s break down each factor.
Agile organizations can rapidly adapt to disruptive trends in the industry and stay relevant in the face of massive changes. Building a fully agile operating model demands an iterative approach to business. You must analyze performance and processes to implement improvements constantly.
With agility also comes the idea of failing faster and learning faster. Organizations must create a mindset of learning from errors and failure. This change in outlook will also prepare them for fluidity in reacting to change-moving or replacing resources and talent when there’s a need to switch gears.
Customers expect everything within a few clicks. They desire convenience, whether it’s in a virtual environment or a physical setting.
Organizations must redesign experiences using design thinking, journey mapping, and more closely linked touchpoints to meet these expectations. They need a rapid delivery infrastructure with a modular design to integrate offline and online journeys for different customer segments.
The success of these workflows hinges on your DevOps setup. With an integrated development and operations team, you’re well-equipped to work on continuous and quick development, testing, and deployment of new services and functionalities.
A huge part of embracing digitization is how businesses communicate with their customers. There’s a need to move past the mainstream ways of outreach and build more experimental and cross-channel marketing campaigns to enhance discovery among target buyers and increase engagement among existing customers. Focus on identifying the right touchpoints using data and optimizing them for effectively marketing your brand.
For example, using QRs on billboards or digital ads, hosting community events, and running influencer campaigns on social media can be integrated into a single mobile app to give customers a more convenient and targeted experience.
Digitizing your operations could create risks for your organization, like cyberattacks, business continuity, data privacy, etc. These risks keep businesses from going further on the path to digitization. However, on all these fronts there are risk mitigation initiatives that can deliver complete peace of mind.
Without a strong risk appetite, leaders will find it increasingly challenging to advance their digital transformation goals and ambitions.
To put in place effective risk mitigation, it is important to effectively map every potential threat and plan your deterrents and responses. Create dedicated teams (or partner with the right folks) for this purpose or work with a high level of collaboration to ensure you’ve monitored, designed, and implemented the necessary solutions to face the inevitable risks in the process of digitization.
Lastly, culture is a non-negotiable factor in an organizations’ preparation for digitization. A culture of transparency, clarity, autonomy, and innovation can take you a long way in your digitization ambitions.
Make knowledge accessible across teams to ensure everyone is on the same page. Give employees the autonomy and avenue to explore the next steps in advancing toward the overarching goal of digital disruption. Our recent publication on Knowledge Management could throw more light on how effective knowledge management is integral to your digitization ambitions.
Digitization is an instrument of improvement and optimization for the future. With an increasing infiltration of technology in every aspect of the modern business landscape, the financial sector is not immune to this digital disruption. For organizations to remain relevant tomorrow and continue offering the same satisfaction to their customers, incorporating digitization has become a more urgent and inevitable need.
