A 'maniacal pace' in the digital banking race

There are a couple of questions we hear from our financial institution (FI) clients practically every day: We have so much to do, where do we start, and how do we accelerate?

It comes from executives anxious to have their FIs’ digital transformation take shape faster and more effectively. But, for many FIs, setting a strategic plan to move toward an enterprise-level makeover has proven to be a major challenge.

Recognizing that every FI is a little different, our response is essentially the same for every FI seeking to digitally modernize: Executives must clearly articulate two central themes:

  • How they will generate growth and increase revenue through their business model participation strategy, such as where they will play, who they will compete with, how they will attract and retain customers, and what they want their brand to stand for in the market.
  • How they will win in the market through their operating model components, such as their people, processes, technology stack, data, governance, and delivery routines, e.g., how you work.

Those themes sound comprehensive and even overwhelming to large organizations, but we believe it should take no more than 10 weeks to define and that the definitions should be more directional than “perfect.’’ 

Once the themes are defined, we believe the approach must be enterprise-led from the top (top-down), but should start in one specific area (bottom-up), such as retail banking or wealth management. 

The key is to start with a consumer-focused capability and generate rapid and incremental wins that can be highly advertised and communicated across the broader organization to obtain buy-in and buzz. The reason to start with a consumer capability is simply because consumers drive adoption and then take that adoption to work with them, creating a slight lag of digital capability expectations on the commercial or business-to-business side of FIs.

These digital transformation efforts should be led by executives who have both a direct line to the chief executive officer and a passion to disrupt the manner in which the organization has always done business. There will most certainly be setbacks along the journey, coming early and often. The executives leading the charge must be fully committed to stay the course and push through the tough times (and convert the naysayers) to get to the silver lining. This is where defining a roadmap with small, incremental wins is so important to overcome inertia.

Due to the complexity of this level of change, our experience suggests these efforts should be “walled off” from business-as-usual activities at the onset. That means a separate and cross-functional team in a separate work space with the old rules of engagement thrown out the window in lieu of a new set of operating principles.

In our view, FIs can’t fail based on the nature of their highly regulated business and, thus, we steer clear of the term “fail fast.” Rather, we like the “test and learn” approach, which implies moving at a maniacal pace toward narrowly defined, minimally viable products (MVP) that are launched to friendly clients before widespread adoption. “Friendly clients” might include employees or digitally savvy consumer cohorts  where the MVP is welcomed as an enhancement or upgraded capability.

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A “maniacal pace” in the digital banking race