Your bank has invested millions in digital but the results are disappointing. Customer experience has improved but this has not led to any increase in market share. Connectivity between different parts of the business has improved but pricing capability has not. Data is better organised but is not delivering the predictive benefits promised.
If this correctly describes the situation in your bank, you can take consolation from the fact that first, your experience is not an isolated one and, second, digital disappointment is not confined to banking but impacts most industries.
A global study by Harvard Business Review, sponsored by digital solutions provider EXL, looks at digital experience across industries. Ten per cent of survey respondents were from banking and financial services.
Banks have particular problems with legacy systems. More than half the survey respondents in banking and finance cited the lack of digital success as due to hassles with legacy information systems, compared with an average 36% across sectors. But the trend of investing in digital and not fully seeing the expected results is a general one. Only one-third of companies report a high degree of success while 7% report little or no gains.
Among other reasons given for such poor outcomes are a silo mentality among management and workforce, insufficient resources devoted to the undertaking, and a lack of internal expertise to take full advantage of the initiative. Turning things around involves properly defining desired outcomes, ensuring that different layers of management are aligned on the goals, bringing in partners and fresh talent.
“Where an initiative is seen as purely IT-led or purely marketing-led, the other senior stakeholders don’t feel they have skin in the game,” says Perry Hewitt, a digital strategy adviser who consults for Harvard Business School.
Apart from making mistakes in approach it could be that the real transformative technologies are yet to be applied. Nearly 70% of respondents have implemented mobile and cloud applications but with robotics and AI it is only about one-quarter while blockchain is less than 10%. If your bank could implement these powerful technologies to their maximum potential, only the sky would be the limit. To get this outcome the planning needs to start now.
Brian Caplen is the editor of The Banker. Follow him on Twitter @BrianCaplen
Register to receive my blog and in-depth coverage from the banking industry through the weekly e-newsletter.
