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Planning Your Digital Transformation Journey

Posted by Michael Carter on May 5, 2019 9:00:00 AM
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planning your digital transformation journey

In case you haven’t heard, the digital channel is essential to your financial institution’s future success and perhaps to its very survival. While this point is broadly accepted in concept, an alarming number of banks and credit unions have yet to take concrete steps toward aligning their omnichannel model with customer trends.

In many cases, this inaction is a product of fear. Digital transformation is a daunting undertaking and it can be hard to know where to begin, especially with other priorities competing for bandwidth. As is the case with fitness programs, however, the most important starting point is often to simply begin moving.

Let me offer a few tips to help plot a digital transformation journey.

It’s the Journey AND the Destination

A good first step is for the management team to articulate the role it wants the institution to fill. Do you aim to be a leader or a laggard with regard to service offerings, for instance? Do you want to be quick to market with new solutions, or wait to first see what resonates in the marketplace before moving forward? Being the “Fast follower” is a widely accepted banking strategy; in fact, industry thought leader Chris Skinner claims that banks on average want to be seventh to market with a new product feature.

Be honest in conducting this exercise. It’s valuable to ensure a common understanding of goals across the leadership team. And if the desired outcome is simply to renew existing relationships during the vendor contract negotiation process and upgrade via some minor tweaks, it’s best not to waste effort pretending to pursue a broader goal. I may try to convince you offline to reconsider your strategy, but at least your intentions should be clear.

The second key step is an assessment of the current use of bank channels, particularly those not involving branch employees. Some data gathering will be necessary here. Formal research can be quite expensive, but direct discussions with both customers and front line staff can be quite enlightening. I would not advise gauging current success on App Store ratings because these metrics can be misleading and short on nuance. They are also often biased by the “squeaky wheel.”

Based on this information, proceed to performing a gap analysis versus your bank or credit union’s current state, then build a roadmap to address those gaps. A budget and implementation plan should quickly follow. Don’t consider cost in this initial attempt. Iteration is part of the process. If your institution realizes it can’t afford its full wish list, cycle back and rethink what you actually want to accomplish.

Constantly Recalculating the Customer GPS

It’s not often that a Zen mindset applies to banking, but the journey itself is an essential part of the process. There is no fixed digital destination; however, you do need to ensure your bank or credit union is pointed in the right direction. Customer needs, technological possibilities and price points will all change over time. Your institution’s intended destination should change along with them.

Digital banking transformation is an ongoing process, and requires ongoing commitment. If an advisor tells you it’ll be easy, look for another advisor.

For more about next steps using voice technology, open banking, and the other ways to enhance your financial institution’s digital transformation, download our white paper, The Future of Digital Banking or learn more about how we can help.

Download The Digital  Transformation of Financial Services

Topics: Technology

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