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As Head of Multichannel and Customer Experience, Maurice Lisi is responsible for drawing and delivering the digital transformation strategy in the Subsidiary Banks’ network of Intesa Sanpaolo, reshaping and transforming the banks’ customer-facing channels across all segments and all touch (trust) points of the banks. He tells us more about digital disruption at Intesa Sanpaolo.
There is no lack of discussion around ‘Digital Banking Transformation’ in the financial services industry. Digitizing banking is driving huge investments in IT and has had a significant impact on the broader organization of both banks and credit unions. In addition, almost all incumbents are replacing or updating their legacy systems and leveraging new technologies to improve back office banking operations while elevating the overall customer experience.
Banks are mainly focusing on technical tasks and on how to embrace new technology, whereas much more must be done with regards to the culture within organizations. To implement digital transformation consistently, there is certainly a need for a deeper and broader technology expertise than currently exists in a lot of financial companies. But, there is also a need for big shifts in company culture requiring new leaders who can bring such radical transformation.
Digital transformation is the process of completely changing the way banks are delivering their financial services, with the need to redefine the back office and delivery fundamentals of products and services, avoiding the pitfall of considering transformation solely as an IT task. In nutshell, digital transformation is not a technical or IT issue, but a company’s cultural change – especially as it relates to the end consumer.
Changing the company culture
To change the company culture and legacy DNA, banks need to identify new leaders who understand such challenges and may help the bank to change effectively. These leaders may not be legacy bankers, but senior executives who have a legacy in tech or digital firms from different industries.
Emerging technology applications, particularly intelligent automation, are already changing the workforce and are expected to have an increasingly profound impact in the near future. Technologies such as robotic process automation, machine learning, and adaptive intelligence are also beginning to have a significant impact on compliance, payments, and retail services, among other banking functions.
Understanding the new technologies
Financial institutions need employees with the skills to understand how these technologies can be effectively applied, and they need agile and adaptive workforces to navigate these changes.
Looking beyond traditional banking organizations, we see how teenagers experience banking very differently compared to older age groups, seeking financial solutions with new search and utilization behaviors. Younger demographic groups are embracing new fintech solutions and are open to trying solutions created in the exploding start-up space, pushing incumbents to undergo a complete rethink of the way services are created and delivered.
We are approaching the ‘breaking point,’ where financial institutions need to redefine the way they satisfy an increasingly digital marketplace. Since culture reflects the values and behavioural activities that prescribe how work gets done within an organization, it is of utmost importance in driving transformation.
Importance of digital culture
By ignoring culture, an organization risks transformation failure. Alternatively, we can safely state that companies which focused on building a digital culture sustained strong or breakthrough performance. Not one of the companies that neglected to focus on culture achieved significant results.
A director said, “We will not know what the bank of the future will be like until we feel our way there. It is clear, however, that one of the big governors of success will be our ability to bring in tech people and integrate them into the guts of the business.”
Banks have built a strong legacy engaging traditional bankers’ skills, and now it’s really a challenge for them to play in this new digital environment. The bankers and new leaders of tomorrow will be completely different than the employees that we know today. The mindset, the behavior, the attitude will be drastically different. Skills that today were dominant in company culture will be most probably replaced by AI, and robotic process automation, while new skills will lead the company culture.
Banks need to let go of the legacy risk-averse culture, promoting a culture of rapid experimentation, testing and learning, growth mindset development, courage in taking risks, and a culture that permits and embraces failures. This change is huge, and not all organizations will be able to embrace it. But, it will determine who will survive in the future.
Banks that are willing to completely disrupt what has been comfortable in the past, embracing a new digital culture, will be the new leaders in the industry. There will be no space for those who choose to be complacent and continue the current status quo.
This article is included in the Efma-Infosys Finacle-Digital Banking Report's Innovation in Retail Banking 2019. Download you free copy