• Kevin Phillips, Head of Engineering Solutions at ieDigital


• 16.12.2022 12:15 pm
#financialServices

The last few years have seen multiple financial services organisations sprinting to provide the very latest, cutting-edge, digital customer service channels. 

Not a trot, not a jog, but a definite sprint. 

Why have they been so keen to invest in digital channels? The reasons are complex, but chief among them is the expectation from customers that the new “normal” is to be able to manage their finances online, apply for products and even obtain personalised information 24 hours a day, 365 days per year. 

This financial convenience trend was certainly escalated by Covid, with branch and call centre closures encouraging people even further to look at online methods of managing their money. However, financial services providers are now under legislative pressure to up the digital ante, too. A new FCA Consumer Duty requires organisations to provide better digital banking experiences, part of an overall objective of putting their customers’ needs first.

Against such a digital backdrop, the leadership of financial services organisations across the board have an increased need to ensure their whole organisation has a digital mindset. Such a mindset is an essential tool to ensure the firm benefits from cohesiveness, and a shared vision to successfully implement what are often, especially in the case of smaller, local providers, radically different customer service platforms, and certainly a break from tradition. 

Therefore, how can the c-suite of financial services providers encourage a digital mindset permeates through their entire organisation?

Encourage innovation and experimentation

Embracing a digital mindset requires leaders to encourage experimentation. 

A test and learn approach is essential for innovation to flourish. However, a natural expectation from any part of a testing and learning process is to see a degree of failure. Therefore, leaders need to encourage a tolerance of failure as part of the learning process. Otherwise, employees who believe that they are monitored and rewarded for output will find it hard to engage in experiments, preferring the apparent safety of maintaining the status quo – which is likely to defeat the whole object of introducing brand new digital channels in the first place.

Developing an appetite for risk also means developing fluency with agile development. 

Fast-paced, iterative development with weekly or biweekly demonstrations to all stakeholders minimises the risk of rework. But adapting to the need for continuous engagement, timely feedback, and fast decisions can be a cultural shock for those unaccustomed to agile development. 

This is another area where an innovative leader can set new standards to encourage such methods. Just like a team sport, developing fluency with agile development requires match practice. No wonder, therefore, that organisations that invest in transforming their culture to embrace agile methods tend to be more successful at digital transformation.

Think laterally 

According to research by McKinsey, executives rank siloed thinking and behaviour as the number one obstacle to a healthy digital culture. 

However, considering all the disciplines required to design, deliver, run, and continuously optimise digital banking, this is no place for narrow and parochial mindsets. Frictionless digital customer journeys transcend legacy organisational boundaries. Those journeys and digital experiences are much easier to design and maintain without departmental silos getting in the way.

McKinsey provides excellent suggestions for breaking down those barriers, inspiring employees with a shared vision, and thoughtfully rotating managers. But even without those long-term measures, a well-crafted agile program should go a long way towards fostering a collaborative, multidisciplinary approach.

Daily stand-ups and regular demonstrations to all stakeholders from risk, compliance, operations, and the senior leadership team help to keep everyone aligned. 

The advent of low-code and rapid development also means that it’s much easier to keep stakeholders aligned, with projects taking weeks rather than months or years.

Allowing customers to join the development journey

Financial services leaders should remember that their customers should be at the heart of digital transformation, especially in the case of financial services organisations. In the digital age, being customer-obsessed isn’t just good business practice, it’s more likely to be a matter of survival.

Agile, iterative development and co-creative design thinking and feedback sessions get you closer to your customers and will make them feel like they are a core part of the process. These same techniques reduce the risk of failed experiments, which, of course, result in wasted time, money, and resources. 

Instead of months of development in a vacuum and then waiting to see how customers react, customers should form a central part of the design process. The speed of low code also means that developments and adjustments can happen in real time in co-creative feedback sessions.

Encourage a product (rather than project) mindset

Leading IT advisors and industry analysts have long advocated that digital propositions should be managed as products rather than projects. 

Transformation is not a build, deploy, and forget exercise. It demands continuing effort to experiment, learn, and adapt to ensure customer needs and preferences are met. That is surely the only way for a business to remain relevant and competitive.

The critical difference can be highlighted by understanding that whereas a project has a start date, a resource plan, a budget, and a delivery date, a program has to be a much more open-ended endeavour. 

In terms of building or modernising a digital banking solution, if a provider is still thinking of this as a delivery project, they have not yet embraced a digital mindset.

Conclusion

Digital banks have been rising in popularity in recent years. In 2022, roughly 203 million people use digital banking services and this number is expected to reach 218 million people by 2025. 

Recognizing the importance of digital platforms is just the start. 

A successful financial services firm that has comfortably incorporated digital channels, even those forms which exist solely online without any physical branch -presence, have doubtlessly benefitted from a leadership that has educated and encouraged the entire organisation about why digital investment is so essential. 

This remains the case – and will become even more important in the coming years as the number of digital devotees is set to rise.