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As customers adopt and embrace digital service at a rapid pace and banks across the world face an imperative to accelerate transformation programmes, Jas Ghuman asks whether firms are on course to finally deliver.

A story of acceleration

With our own research for our latest whitepaper highlighting that 60% of leaders are re-evaluating resource allocation for change and transformation, a renewed focus has emerged. Not just seen as a response to increased competition in the form of new challengers, global banks are preparing to increase the scope, impact and pace of digital transformation initiatives as a matter of survival.

“We’ve seen two years’ worth of digital transformation in two months"
Satya Nadella (CEO Microsoft)

Since the term ‘digital transformation’ was first coined nearly a decade ago, many initiatives, particularly those embracing automation technologies, still feel either stuck at the starting blocks or have failed to deliver what they were set out to deliver. We see three major drivers of this:

1. Unbalanced scope and focus

We often see a high degree of focus on the front-end digital experiences (opening a new account, applying for a new lending product etc.), typically pointed towards new customer acquisition. These low-effort digital journeys ultimately drive significant back-office demand often still relying on manual work and unable to move at the same pace. There also seems to be a funding bias. More funds are dedicated to the front end, and cost reductions expected at the back end, where the effort is usually required.

2. Lack of alignment

Many product teams in banks aren’t closely aligned to support functions, challenging delivery of brand promises. We have seen an onboarding experience, with a smooth front-end pulling together existing customer data to support the application process and the bank promising a 3-5 day turnaround. In reality, this took 3-4 weeks, with frustrated customers forced to seek service from competitors. This is mainly caused by a lack of operational alignment and an end-to-end view of how tools, processes and systems are built to support the customer journey. Incentives and measures between functions are rarely aligned, with front end teams able to shine as usage and adoption grows, whilst the back end sink amongst additional demand and ever more challenging targets.

3. Workarounds are still commonplace

Many firms driven by the best of intentions of delivering new propositions still find themselves encumbered by large, inflexible legacy systems. As a result, hundreds, if not thousands of workarounds are employed with data manually manipulated in spreadsheets and locally developed systems. As these layer over time, resource requirements inevitably increase, while the ability to adapt diminishes.

As many of these issues remain unaddressed, automation projects continue to be deployed in areas unable to achieve the scale and impact requirements to deliver returns and support the delivery of compelling propositions across an end-to-end customer journey.

A route forward

Aligning teams, functions and technology around the customer journey, focused on delivering against their objectives, (e.g buying a house) highlights where human discretion best adds value and where automation can deliver repeatable, scalable outcomes, critical to realising ROI.

This if often easier said than done. As competing priorities, siloed teams and incompatible incentives threaten to derail the best of intentions, broader customer-centred roles may hold the key to bringing together disparate parts of the journey and align under one common purpose. To succeed, these roles will need sponsorship from the very highest levels and an ability to cut through decades of entrenched politics.

Will the next few years finally see roles such as the ‘Chief Customer Officer’ able to cut through and realise the transformation vision?

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Author

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Jas Ghuman, Managing Consultant | Financial Services

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