Banks were doing well with digital transformation in the early stages, but the deployment of digital banking transformation is slowing down as things move from IT departments to other parts of the organization, according to a new survey.
The survey from the Digital Banking Report indicates the second wave of digital banking, where technologies are being rolled out across departments, is not keeping pace with the first phase where technologies are selected and on-boarded.
As the report notes, cultural factors are the culprit impeding digital transformation and the solution is to use cross-functional teams to breakdown legacy silo perspectives.
Digital technologies to change the customer experience
While technologies such as artificial intelligence and automation are being applied across organizations, the next phases are likely to include greater use of cloud, analytics and blockchain to assist with data gathering and assessment. In addition, both the Internet of Things and augmented reality are being called out as technologies that will change customer experience.
Getting this right is important, since almost all of the banks surveyed said they were increasing the range of different digital technologies.
Four pillars for DX success
While cultural factors and indecisive leadership are presenting obstacles to digital transformation, there are measures that banks can put in place to help keep their digital strategies on track. For banks to be successful with digital transformation, the Boston Consulting Group recommends they focus on four priorities (what they term as pillars), including:
- Reinvent the consumer journey, using the example of how banks can become more like Amazon.
- Leverage the power of data. This includes looking at how data analytics can enable banks and credit unions to best understand consumers, plus to identify business opportunities and lower costs.
- Redefine the operating model. This involves striking the right balance between human interaction and digital and self-service functionality for consumers.
- Build a digital driven organization. Here digital needs to be seen as the new norm. To do this banks need to recruit the right talent, discover agile ways of working and construct an organizational culture that is willing and able to take risks.
Some banks have been successful with digital transformation. As an example, analysts at Forester single out BBVA, the Spanish bank, for balancing functionality and enjoyable user experience whilst maintaining the necessary security checks.
