Banks Are Sleeping On Digital Transformation

To benefit from digital transformation, it’s not only the systems that need an innovative overhaul, but also the executive team. Change management, holistic processes, and a completely new mindset are a must. Only executives that lead with foresight and agility will be able to transform their company into a modern workplace.

Decision-makers of every industry now have to ask themselves fundamental questions like: How is digital transformation affecting our company? Which new or changing requirements does our target demographic have? Do we have to change our underlying business models and if so, how? What possibilities do new technologies offer us? Are our processes optimally digitized and automated?

Digital change means people change

New processes also change the way people work. If digital transformation is to succeed, employees’ acceptance of new technologies is a necessity. Most employees will typically struggle to break old habits. If the new workflows seem challenging or overwhelming, employees usually revert back to old processes; a mindset which prevents them from accepting necessary changes.

A beneficial approach is usually to start small, for example with decentralized scanning or printing processes which are easy to use. While they are only a small part of the process that needs to be digitized, it’s easier for employees to start with one new workflow and work their way up. Adapting to digital realities enables more efficient and cost-effective banking processes.

Banks have to save, too

Most banks have to save money right now. Due to low interest rates, customers are reconsidering if it’s even worth placing their funds with banks, making their revenues decrease. Now more than ever, cost-saving measures are sometimes the only way to stay afloat.

While workflows are changing, customer requirements are changing as well due to digital transformation. In the near future, banks will primarily be dealing with so-called hybrid customers that want to be served online and offline. With increasing digital literacy, banking customers wish for comfortable digital communication channels while, at the same time, they still appreciate having the possibility to contact the bank offline, too.

From analog to digital

Traditional online banking isn’t the only challenge. Especially savings banks and credit unions have to ensure that they do not lose regional analog customers to the anonymity of the world wide web. Digital banking services have to be consolidated with analog consulting services.

While change is necessary, banks shouldn’t lose sight of their strengths and core competencies. Rather, they should invest in them and incorporate them into new digital concepts. Adapting to digital workflows does not mean losing traditional values. However, the necessity of digital transformation remains undisputed – banks that are not willing to (digitally) change their business models will not survive in the medium to long term.