The financial services sector is undergoing unprecedented change. From traditional banks to insurance companies, every entity is witnessing a digital revolution, primarily driven by customer demand for seamless, real-time experiences. But while the push towards digital business models is evident, are these institutions truly ready for what’s ahead?
Where the Financial Services Industry Stands
According to the most recent Digital Business Global Executive Study and Research Project conducted by MIT Sloan Management Review and Deloitte Digital, the financial services industry (FSI) is indeed on the brink of significant transformation. An overwhelming 93% of the surveyed FSI firms with a digital transformation strategy emphasize improving customer experience and engagement.
Digital disruption is ubiquitous. A staggering 90% of respondents concur that digital technologies are shaking the very foundations of the industry. Yet, despite these numbers, confidence in preparedness is less impressive. Only 46% believe their institutions are gearing up adequately for this digital upheaval. This number marks a minuscule improvement from the previous year’s 44%.
The Employee Experience Quandary
While much of the digital transformation in banking and the wider financial sector has centered on customer experience, there seems to be an oversight: the employee experience. The vast majority (76%) of surveyed participants expressed the desire to work for digitally progressive organizations. However, only 38% felt their organizations equipped them with the necessary resources or skill development opportunities for a digital environment. Alarmingly, 41% plan to remain with their current employers for only three years or less.
Adobe Systems’ executive vice president of customer and employee experience, Donna Morris, succinctly encapsulates the sentiment, highlighting the symbiotic relationship between customer and employee experiences. Enhancing both is the cornerstone of genuine digital transformation.
Redefining Business Models in Banking and Beyond
The implications of these findings stretch far and wide. Traditional banks, insurance companies, credit unions, and even the real estate sector, need to recalibrate their business and operating models. It’s not enough to offer online money transfers, utilize data analytics, or dabble in social media marketing. The real challenge lies in integrating these digital initiatives into the core DNA of their business strategies.
But what does this digital DNA comprise?
Agility: In a world where digital business is the norm, agility is paramount. It’s not just about adapting but doing so rapidly and effectively. Traditional banking systems, often mired in legacy structures, need to adopt a nimble approach to minimize friction between conventional and digital operating models.
Culture: It’s often said that an organization’s culture is its hardest attribute to change, but also the most crucial. The banking industry, with its rich heritage, needs to foster a culture that is receptive to change, encourages innovation, and is not bound by traditional norms. As Maile Carnegie of ANZ Banking Group Limited articulates, the right organizational culture offers the highest return on investment.
The Way Forward
As the financial services sector treads the path of digital transformation, a holistic approach is essential. Beyond the evident need for digital tools, FSIs must ensure their strategies address both customer and employee experiences. With a majority recognizing the disruptive power of digital technologies, the next step is actual integration and adaptation.
Financial institutions, from traditional banks to credit unions and insurance companies, are poised at a crucial juncture. As the lines between digital experiences in banking, real estate, and private equity blur, the emphasis should be on holistic digital transformation rather than isolated digital initiatives.
Embrace the Future of Financial Services
Digital transformation in financial services is not just a trend; it’s the future. As FSIs embark on this transformative journey, choosing the right IT partner can make all the difference. ION247, with its deep expertise in ensuring a successful digital transformation journey, is perfectly poised to guide institutions through these dynamic shifts. Join hands with ION247 today and ensure your institution is not just a part of the future but leads it.