While there are many companies who’d like to implement a digital transformation strategy, for many, especially those in financial services, it can be hard to know where to begin or to be brave enough to get the ball rolling.
Replacing legacy systems, transferring huge amounts of data to the cloud and changing whole processes can seem very daunting. However, to successfully implement a transformation in the financial sector there are a few key things to bear in mind.
It’s not just about new technology
When setting out on a digital transformation journey, the first thing a business needs to consider is what they are going to do with their old tech. It’s very exciting to get caught up in the waves of new technology but knowing how you are going to deal with potentially decades of information locked up in legacy computing is a challenge.
This legacy computing will hold all of the key data and processes that make the business tick; often including intellectual property that is often vital to the company. As such, it can be very difficult to securely transform all of these vital bits of information into a different form of storage.
It’s important therefore to know how you plan on moving everything to a modern system, e.g. a cloud system, and to get expert advice on how to execute the process. Getting this wrong can lead to all sorts of problems, including loss of data and loss of processes, so making sure that anything stored on old legacy technology can be transferred safely and securely should be priority number one.
Identify the actual problem and then how to solve it
Knowing how to fix a problem is one thing; knowing what the problem you are trying to fix is, is quite another. By spending time identifying the exact problem you are trying to solve, it becomes easier to select the technology that you should use.
It is so easy to become intoxicated by buzzwords around digital transformation. Yet the words that get the attention of many C-suite executives may not actually work in practice. If you imagine technology solutions as a bag of tools, you are looking for the best ‘tool’ to fix the problem. A spanner is great for tightening a nut but not for hammering a nail – selecting the appropriate technology is very much like this.
When looking at formulating a digital transformation strategy, especially in the financial sector, it is important to apply the right, proportional technology to solve your problem. This will mitigate the risk of wasted time and money which occurs when the incorrect solutions are fitted. Clearly identifying the problem and then working to solve it, makes it easier to respond in a measured way and use the correct technology to fix the problem.
Look for ways to leapfrog the competition
On a more positive note, when thinking about undertaking a digital transformation, look at the technology you can leverage to leapfrog your competition. When updating legacy equipment and software, you have a great opportunity to move forward, sometimes 20 or 25 years, in one stride using the latest tech. Some of your competitors may have updated 5 to 7 years ago and are already slightly out of step with the latest developments.
Being able to integrate the very latest technology means you can get ahead of the game, even if you have been lagging behind the rest of the industry for the last couple of years. Technology, like the cloud, can transform a company, making it more efficient and effective.
Fit for purpose
Keeping ahead of customer trends can help inform the strategy. For example, more people are banking using their mobiles now and banks have to react to this. In the ‘age of the customer’, financial services companies need to be looking at how they interact with their customers and transform to best provide a service that fits their needs.
However, you also need to be receptive to the needs of your staff as well as your customers to ensure the successful implementation of a digital transformation. Knowing how your transformation will affect your key processes and people will help you to define what the strategy is and whether it is worth following.
In terms of internal changes, the digital transformation should make lives easier and not necessarily just replace people. Removing time-consuming and simple tasks is a great way of improving efficiency. However, there are limits to what the technology can do and identifying these roles is critical.
Hi-touch and relationship roles cannot be transformed using technology. For example, in an asset management company, some clients may want to speak to a real account manager rather than a chatbot. Not all of these interactions need to be automated, in fact, it may be harmful to the client relationship to do so.
It could be better to employ more customer service employees when you reduce the need for time-consuming administrative activities. What digital transformation can do is take out the drudgery of processes meaning humans can spend more time on roles technology can’t do.
Don’t forget your workforce
The people that will be interacting with this technology on a daily basis will be your staff, so you have to know what they want before starting a digital transformation. More often than not your workforce will be relatively tech savvy.
They will be using mobile and smart devices outside of work already, so it’s a good idea to align the new technology with that of your workforce’s daily lives. Using high speed, easy to use facilities outside of work and then coming in to find legacy equipment and slow software will seem incongruous to them and shouldn’t be the case after a digital transformation.
Going through this transformation should make everyone’s lives easier, not harder and more complex. Therefore, when implementing a strategy, you need to look at your workforce. There will be those that are entrenched in their role and not receptive to change and there will be those that are driving innovation already. It is up to you to decide who is coming on the journey and who won’t be willing to.
Using social and personal factors can help to transform the former, but this may not always happen. Business leaders need to get a picture of who will be the leaders once this transformation happens and who may have to be let go for the transformation to succeed.
Successfully implementing a digital transformation strategy can be challenging, but by clearly identifying the problem that needs to be solved you can start to select the right tools and the right people to drive it forward. If done correctly, it can help companies take huge strides ahead of competitors, increase efficiency and make employees’ and customers’ lives easier.