The pace of technology change in the financial services industry has left many banks concerned that they will lag behind or miss out on fast evolving digital opportunities. In response, some are pursuing tactical projects involving digital technologies – what we call “doing” rather than “being” digital. When organizations “do digital,” they dive into digital programs with the mindset of improving rather than reimagining processes; they fail to contemplate how a function might radically transform in the next few years through the power of AI, predictive analytics and software “bots.”
In the midst of Digital Disruption 2.0, it’s important to distinguish between “doing” and “being” digital. While banks will certainly need to address discreet requirements, it is also crucial – in parallel with these tactical efforts – to keep the big picture in mind, particularly in the face of the many industry uncertainties brought on by digital change.
A truly digital organization exhibits certain traits: top management that seeks to understand all aspects of digital; a digital culture that’s infused throughout the organization; and technology talent, both cultivated internally and through co-innovation with startups, suppliers and financial angels.
The concept of a minimum viable product, or MVP, is also foundational to a strategic digital approach. With an MVP, companies do not wait until pilot programs are fully mature but instead release new products or programs that are just usable enough for developers to learn more about what users or customers really need. From this real-life input, businesses then evolve the new product to the point that it proves successful and then scale it rapidly. Taking a foundry-like approach to industrializing and commercializing pilots can help speed time to market for innovative projects.
In my experience, business leaders can get defensive at the suggestion that their digital approach is lacking. “How can you say we’re not digital? We’re doing these 30 cool things.” My reply: “Have these digital projects made your business more relevant and more prepared for the future? How are these digital efforts contributing to the organization in terms of revenue growth, higher profitability and improved customer experience?” After all, being digital is a holistic endeavor that brings together data science, digital strategy and design-thinking talent pools. It starts at the top and permeates throughout the entire organization.
Another strategic consideration that is closely related to the digital journey is digital branding. I will explore the interplay of brand and digital in my next post.