Before COVID-19 disrupted every imaginable a part of society, banks were feeling confident and secure in their digital transformation progress. While recognizing that they had a method to go, progress was seemingly “on-track”. Then without notice, every contingency plan went out the window. Suddenly, branches needed to shutter-up and crucially, workforces had to become entirely remote, while customers were forced to visit call centres and digital channels to satisfy even their most complex needs, increasing volumes drastically.
The response to COVID-19 from banks was, while swift, a set of short-term tactical actions to reply to both technical and health & safety needs of both their workforce and customer base as well as the fast-changing market conditions, like government mandated lending to smaller businesses and the crash in spend. These tactical steps still required large manual workarounds increasing cost and impacting customer NPS.
This coupled more complicated servicing with a completely new method of working; and what it has highlighted is the fact that banks have much further to visit, and faster, in terms of digital transformation. True strategic digital transformation, however, has proven elusive for the majority of banks trying to undergo serious cultural and technical change. Once we move out of lockdown, banks must shift perspective to dealing with both immediate needs for change – things coming in the next 6 months – and crucially, towards the more dangerous undertaking of sustained and successful digital change.
Looking past Customer Journeys
Traditionally, digital transformations failed to create meaningful and sustainable change because banks have embarked on Customer Journey Programmes that mostly enhance the user experience of customer channels and uplift the technologies accustomed to deliver these experiences. While this makes customer applications more usable, they have not tackled the greater difficult areas like complex business processes/structures, rigid legacy systems and insufficient aggregated customer/transaction data which make customer interactions difficult and expensive. . This is compounded by a legacy internal and cultural resistance to change However, with a global pandemic radically upending 'business as usual', it comes with an opportunity to embed new practices which allow digital transformation in an accountable, clear and well-planned manner.
Customer centricity
While banks shouldn't flock to follow along with the interior structures of the new digital-native competitors, it is crucial that they realise what's built them into so successful: customer obsession. This is where an iterative method of working should be enacted. Using data to deliver a detailed knowledge of the client as well as their needs and wants, banks must service those needs inside a lightweight, seamless, ethical, and engaging way.
As lockdown pushed customers online, it's likely that this will remain the key channel for interaction and for that reason requires primary focus. This cannot be achieved in annual or perhaps quarterly reviews and goal-setting, once the needs from the customer – particularly in this moment in time – change week to week. Therefore, an iterative approach that constantly activly works to improve, update and react to customer desires is essential.
From tech delivery to the services offered as we eventually transfer to 'normal' spend activity, only an iterative approach with measurement and accountability built in to know the things that work can deliver true customer-centricity. This is crucial: only by actually measuring the successes from the iterative approach against KPIs and benchmarks can banks accelerate and scale the best developments and retire those less successful initiatives.
Successful iteration
Supporting an iterative approach to digital transformation must involve a true reimagination from the operations of the business. Key is decision-making models to aid faster making decisions and measurement of iterative experimentation. Banks should also reframe the funding and strategic outline of the work; it cannot be considered a 'project' to enhance digital offerings but a continuing product orientation that is always enhancing the product to create new sources of value. This, of course, must be based on cultural change that tackles silos and gives more decision-making power in addition to transparency across the procedure for transformation.