Digital transformation of financial services

We are seeing the movement of data and documents to a networked world. I remember reading Nicholas Negroponte, the author of the 1995 best seller, Being Digital, who touted the bits and bytes innovations as the fax and the CD-ROM were heading the way of the Beta Max and dodo bird.

Heck I still remember when the lockbox business was considered sunset in the 80s and receiving mail, wait we still get mail?).

Okay, back to the topic, what exactly does digital transformation mean? What should senior management focus on and why?

This is almost always painful because many in senior management have no idea what that is. They did not grow up in an era of smart phones, ipods, touch screens, etc. the same way that Generation Y or Z has.

In banking, retail businesses are further ahead here than the commercial side, partly because dealing with consumers is easier, they don’t have complex supply chains. Take a mortgage for example, banks could partner with Zillow or some other GPS service and do many interesting things – search houses, view them via 3D, see comparative sales in an area, all with an app and not leaving your home.

For companies, how about the suggestion to start capturing your data around the supply chain and figure out how you use that to transform the way that you engage. There are lots of vendors out there that can help collaborate with your supplier and buyer ecosystem using technology like GT Nexus, Nipendo, etc.

But on the subject of Banks, the challenge they have is they can’t literally overhaul their IT infrastructure and start from the Cloud. But what they can do is a few things:

  • Figure out how to share company data so front line employees have a holistic view of a company
  • Start addressing interoperability of B2B and Supplier Networks – develop a strategy to deal with these networks going forward.
  • Invest the time to learn about what networks are doing right – analytics and customer experience to name two.
  • Start learning more about the platform-as-a-service model – while and Apple are two success stores, B2B vendors have some interesting developments to keep an eye on.
  • Recognize innovation, and realize it probably doesn’t start in your internal walls and perhaps not even with your current vendor set.

The revolution to digital banking is on in the retail world, (see Chris Skinners book on the subject), and I suspect this is a healthy conversation to have for all those bankers dealing with corporate and commercial clients.

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