Digital transformation for the financial services industry
Everyone has jumped on the digital transformation bandwagon over the past few years – particularly those in the financial services (FS) sector. However, whilst there is an appetite for it, and significant investment allocated to it, the FS sector in particular is still struggling to harness the potential of this ‘vogue’ approach. This is particularly true of the B2B organisations within the sector.
Digital transformation is actually relatively easy to instil into a business’ culture, but far too many organisations – particularly within FS, are over-complicating it.
The key to success is taking a step back and getting to grips with exactly what digital transformation looks like for your business.
At the core should be the customer – and their experience of your business. Indeed, almost every B2B business looking to implement a digital transformation strategy is looking to create a better customer experience that either moves customers through the sales process faster and/or builds the relationship between the brand and its customers.
B2B organisations understand this. Indeed, Forrester’s 2015 report revealed that “improving the experience of our customers” was the number one priority across the board for B2B marketers, closely followed by growing revenues and reducing costs. The challenge seems to be implementing the processes that will drive these changes.
This is unsurprising given the significantly longer sales cycles within B2B. The pace of change within organisations typically matches the sales cycle, meaning it takes longer for B2B organisations to implement transformational change. Therefore there is a clear need to act now to get the process of change started.
For me, the best option for any FS organisation is, quite simply, to put digital at the heart of the customer experience. Spanning not just technology, but people, and processes too, putting digital at the core of the customer experience can realign focus, and help find a common goal that meets the ever-changing needs of both the business and its customers.
Indeed, the FS businesses that will see the best results from digital transformation in 2016 and beyond, will be those that think like a start-up and behave like an entrepreneur. This doesn’t mean trying to replicate what others are doing – it means investing in a culture that helps their business excel. It means focusing on the customer and the experience.
For any FS company looking to maximise returns from digital transformation, here are three pieces of advice:
1. Focus on online and cross-channel customer experiences but don’t ignore traditional channels – digital transformation can still have a significant impact on offline channels too.
2. Advocate digital transformation and first-class customer experience from the top level down – everyone needs to be responsible for delivering a first-class experience so don’t make it one person’s responsibility and make sure that every ‘new recruit’ is on board. In order to remain ahead of the digital curve, banks and financial services must invest in the right people to develop and deliver the strategies and roadmaps that will bring about transformation. This doesn’t mean trying to find better versions of the people who you hired 10 years ago. It means taking a long hard look at the new skill sets you need. With the rapid pace of technological change, these are skill sets that the existing team may not understand, let alone have capabilities in, so it is pivotal to bring talent in to create a complete, complimentary team.
3. Take risks and learn continually – the whole process of digital transformation requires organisations to continue to evolve. The FS sector is one of the most traditional industries, making it difficult to be innovative, but this test and learn mentality is key to success. Taking the risk now will pay off much sooner than many think.
Digital transformation has the potential to have a massive impact on B2B FS companies because it helps them to re-align themselves with their customers and to be ongoing strategic partners. Customer expectations are continually evolving to higher standards, so it is imperative that B2B organisations work to exceed those expectations if they are to shore-up long-term returns.
Digital transformation offers an unrivalled opportunity for the FS sector to improve how it engages with and retains customers in the 21st century. The brands that invest in getting on board now will undoubtedly come of age and retain their place in the world; but those that don’t risk holding themselves back by years.
Drew Nicholson is CEO at OgilvyOne Business