Becoming a digital champion doesn’t happen overnight. After all, a digital transformation is a journey, not a destination. So how far along is your bank towards becoming digital-first? Let’s find out.
Grow up — digitally
If you haven’t done so yet, we highly recommend taking our Digital Maturity Scan to assess your bank’s digital maturity in just three minutes. Created by our Strategy Consulting team, the scan uses a rigorous set of standards that have been developed through years of experience with dozens of banking clients around the world.
Upon completion, you’ll receive your scores for each category that you’ve been assessed on, as well as your overall digital readiness score and how you compare to other banks and market leaders.
Based on your score, you’ll be categorized as Conservative, Novice, Progressive or Champion. We’ll explain how each of these categories represents the current level of your digital readiness, and which steps to take to become a digital champion.
The stages of digital maturity
“Digital-first” means different things to different financial institutions. So how do you know if you’re actually a digital leader? The following categories broadly sum up what different levels of digital readiness looks like in most banks.
Conservatives typically lag in digital strategy and value physical banking over digital experiences. They prioritise products and sales over customer experience and believe in the old way of hierarchical working with less focus on digitisation.
Novice players have self-assumed digital leadership at some or all lines of business. Most initiatives are siloed and focused on system replacements and features, with no user testing or research included in the process. Monolithic applications are the still norm, with DevOps automation only recently added to the roadmap.
Progressive players have new digital leadership. Their digital vision is still blurry, but they’ve taken the first steps to apply user research, improve new features and multi-channel customer experiences. They understand the need to work in an agile way, but the prevailing mindset is still to use a “waterfall” approach. Banks at this level of digital maturity usually have an enterprise-level API strategy being slowly applied throughout the business along with integrated development and operations teams.
Champions have a clear vision and understand that the customer ultimately determines business success. They leverage platform-based thinking and customer input to drive their decision making and success criteria, and experiment with new business models. Champions excel at an agile way of working, and use a microservices architecture and advanced AI technologies to improve user experiences at scale.
Play to win
Every bank should aspire to become a digital champion. Your customers won’t settle for anything less, so neither should you. So how do you get there?
Here are four tips:
Step 1: Digitise your business strategy
Champions evangelize the value of digital across the organisation, and they have a clear idea on the impact of digital and the value it brings across their financial institution.
The first step to becoming a digital champion is thus to develop a compelling digital vision that’s linked to your business strategy.
Step 2: Always put your customers first
Champions shift the focus of operational improvements toward creating value for the end customer, so that all their teams are aligned towards customer value creation. For example, Slack encourages customer support specialists to research the people they are helping and create mini personas.
Make sure to cultivate customer-centric mindsets throughout your business and align your teams towards customer value creation. Every employee in your bank should understand who your target customers are, and develop business practices that are empathetic towards the customer’s experience.
Step 3: Build an agile organisation structure to accelerate digital business
Champions evolve their goals and focus on cross-functional teams, so they can improve ROI and customer retention by focusing on end-to-end customer journeys instead of deadlines, estimations or budgets.
Begin piloting cross-functional teams that focus on the customer’s journey from end to end, and empower them by basing budgets on achieving the defined outcome. Then, take the insights from your pilot and scale them across other customer journeys.
Step 4: Embrace microservices and an API & DevOps culture
Champions have embraced a microservices & API-first architecture––especially for front-end applications––which lets them innovate faster. Champions also embrace a DevOps culture to ensure faster and continuous feature releases according to their business demands.
In order to achieve this, you should build APIs for your core banking applications. Additionally, you should automate your Continuous Integration (CI) and Continuous Delivery (CD) cycles to produce faster releases. Finally, you’ll need to rationalise your portfolio of applications to focus on a cloud-native microservices architecture, which helps you to achieve a faster time to market.
The future starts today
Banks holding onto the past will become obsolete in the future. The digital era gives you an exciting opportunity to become an essential part of your customers’ daily lives –– which means you have to act now.
But that doesn’t mean you have to take the leap alone. Our strategy consultants can help you get started with a zero-obligation chat. Get in touch to book an introductory meeting and receive an in-depth report afterwards that’s tailored to your specific business needs.
About the author
Mayur Vichare is the Head of Strategy Consulting at Backbase.
Mayur leads a team of digital strategy consultants to help financial institutions define their digital vision and develop a high-impact digital transformation roadmap that’s achievable, backed by data-driven insights, and designed to accelerate ROI.
Mayur brings with him deep experience in developing innovative digital solutions across a diverse range of sectors, including the fintech and banking space. During his career, he’s worked with Fortune 100 companies to develop end-to-end customer journeys and platform models to drive strong business value.