Digital transformation in the banking industry is not simply a matter of technological advances. It takes much more than that. Financial institutions need something that will make them capable to achieve true digital transformation, and that means doing a lot more than simply bombarding users with notifications from cutting-edge mobile apps. We have to bear in mind that the focus of Digital transformation is not only technology but also user experience, convenience, opportunity, speed, and efficiency. True digital transformation will have a base in technology, but also requires a culture of Agile Banking.
There is no longer any question that our society demands connectivity, speed, and efficiency, and financial institutions are fully aware of this. Many have identified the potential threat from the so-called FinTech sector, and have set up cooperative frameworks with these revolutionary financial technology companies. FinTech startups have become miniature models for institutions seeking their own digital transformation.
What do these FinTech startups have to offer that is of interest to their potential competitors? Mainly agility, i.e. speed and efficiency, with a pleasant user experience and empathy as added bonuses. These features have traditionally been lacking in retail banking institutions, but more and more clients today expect them.
If financial institutions are going to embrace the culture of Agile Banking, they must focus on empathizing with the client, making the user experience the central process and acting with speed and efficiency. But what exactly is Agile Banking?
Going beyond technology
Though Agile Banking is based on technology and technological processes, it is much more than that. It involves a cultural change that extends to modifying the bank’s vision and mission. It means doing away with models based on reducing costs and selling everything at “rock-bottom prices”; instead, it focuses on offering clients what they need when they need it.
It often involves forming a close relationship with clients, knowing what is right for them, providing a personalized service, and even making an emotional connection – in fact, that’s the key. Clients are attracted to and retained by an institution for the same reasons they can be lost. If we base our methods for attracting and retaining clients only on measurable factors such as costs, we’ve lost the battle. A competitor with cheaper prices is always going to come along. In the race to reduce costs, no one wins and many people lose. In the end, the one who loses the most is usually the client. Right now, we attract and hold on to clients by being fast and efficient, respecting their emotions, providing them with a pleasant experience and helping them.
Financial institutions obviously need a suitable technological base for their journey of digital transformation: agile development methodologies, continuous integration, and DevOps. In short, they need systems capable of processing information in real time so the right decisions can be made for the right customers in the right time frame. But they also need a new culture for dealing with clients: a completely revamped approach to the role of bank branches in prioritising the user experience. It may seem as if there are many different elements involved in digital transformation, but they all come down to a single concept: Agile Banking. It is this culture of Agile Banking that will guide financial institutions to become what their clients need them to be in the 21st century.