"As long you are saying, top-down, ‘I would like to deliver a digital bank. I would you like to cut the cost to serve. We should drop off 20% of branches,’ and the people are not following you. Guys, you are just putting money in technology because nobody's enabling from the ground to make this kind of transformation." - Maurice Lisi
Top three insights from this article:
- Digital transformation in banking should focus on people and cultural transformation, not just introducing new technology, to create meaningful value for customers.
- Integrating digital and traditional approaches is crucial for success in the future of banking, and requires a collaborative process that involves finding the right balance between traditional banking practices and digital innovation.
- Education and learning are critical in driving cultural transformation in digital growth, and financial brand leaders should invest in studying human behavior and ensuring their vision is shared throughout the organization to avoid exclusivity and achieve success.
The digital transformation journey is a crucial undertaking for banks, credit unions, and fintech organizations in today's competitive landscape. James Robert Lay, host of the Banking on Digital Growth Podcast, and Maurice Lisi, head of multichannel bank at BPER Banca, share their insights on the challenges and opportunities that lie ahead for financial institutions as they adapt to the rapidly changing digital landscape.
Humanizing Digital Experiences While Leveraging Technology to Improve Efficiency
Maurice has seen firsthand how customers respond positively to innovation when banks focus on delivering an amazing customer experience. But creating value for customers through innovation requires more than just technology. It's about transforming individuals, teams, and entire organizations.
“The majority of [traditional] organizations think digitalization is just buying technology. Nobody thinks about its real purpose,” Maurice shared.
He points out that many traditional banks, even those that have invested billions in digital banking, haven't been successful in creating value for customers.
“For a long time, banks kept their digital division separate,” Maurice said. “They were not enabling actual change.”
One reason for this, Maurice explains, is that banks often forget that the most powerful technology in their most profitable businesses is the people. Banks should start redesigning their distribution models by focusing on people and then using technology as a tool to innovate.
Banks aren't IT companies delivering financial services—they're financial institutions that should use technology to better serve their customers.
So what does this mean for organizations and their digital transformation journey?
Maurice says it's about putting people first and ensuring that employees have the knowledge and expertise to provide clarity on complex financial problems.
Technology should be used as a tool to solve customers' pain points, but it's the people within the organization who need to be open to transforming their own behaviors and beliefs.
Creating a United Future: Digital and Traditional Banking Working Together
Historically, banks have separated their digital and traditional operations, leading to internal competition and a lack of collaboration. However, going forward, the key to success will be integrating digital and traditional approaches, fostering innovation through collaboration rather than competition.
In this new world of exponential change and rapid technological advancements, such as AI and OpenAI's chat GPT, it's essential for banks to combine the best of both worlds to overcome challenges and create breakthroughs.
Digital and traditional leaders must learn, collaborate, and grow together, recognizing that neither side has all the answers.
For a smooth transition, the first step is for both digital and traditional leaders to come together and agree on a consensus for the bank's long-term strategy. This requires setting aside individual visions and working together to create a shared vision for what the bank will look like in three years.
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Instead of dictating the future direction, leaders should facilitate discussions, ask questions, and help team members gain a deeper understanding of the challenges and opportunities facing the organization.
By engaging in this collaborative process, banks can create a united vision that encompasses the best of both the digital and traditional worlds.
Creating this consensus involves finding the right balance between traditional banking practices and digital innovation. Both digital and traditional banking have strengths that should be harnessed to create a well-rounded strategy for the future.
For example, traditional banking excels at fostering personal relationships and understanding complex banking services, while digital banking offers efficiency, accessibility, and the ability to quickly adapt to changing customer behaviors.
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In order to achieve this balance, banks must invest in their people and culture, promoting a mindset of collaboration and continuous learning. This includes bringing digital leaders into the organization and integrating them with compliance, anti-money laundering, and other departments that still operate within the traditional banking framework.
By encouraging open dialogue and learning from one another, digital and traditional leaders can work together to create a bank that successfully navigates the challenges of an ever-evolving landscape.
The Importance of Education and Human Transformation in Cultural Change and Digital Growth
When it comes to digital transformation and cultural change within an organization, education and learning are crucial.
Maurice, who has been facilitating this type of change for over 15 years, emphasizes the importance of constantly looking beyond what one can see every day. He warns against falling into the trap of auto-celebration and suggests investing time in understanding what is happening around the world and in other markets.
It is through this experience that one can identify common patterns of human behavior, which is critical when it comes to driving cultural transformation.
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But as James Robert often shares, financial brand leaders should focus on the employee experience first, as internal transformation is critical in digital growth.
Issy Sharp, the founder of the Four Seasons Hotel, advocated for automating the predictable so that we can humanize the exceptional. Use technology as a way to simplify internal tasks, therefore freeing up time to focus on more complex tasks that add real value to the customer.
Maurice advises financial brand leaders to ensure their vision is shared within the organization before starting a transformation program. He urges them to get consensus from all levels of the organization, not just the C-suite, to avoid making a private club of digital thinkers. Organizations should focus on resolving misunderstandings and avoiding exclusivity.
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Digital transformation and cultural change require continuous learning and investment in understanding what is happening globally. And ultimately, cultural change is a human transformation that requires a focus on the employee experience, not just the customer experience.
Take Action Today
Maurice shares these three action items that financial brand leaders can take today as they continue on their digital growth journey:
- Integrate digital and traditional banking approaches to foster innovation through collaboration rather than competition.
- Invest in people and culture to promote a mindset of continuous learning.
- Ensure that the vision for transformation is shared and agreed upon throughout the organization to avoid exclusivity.
For more about financial transformation, reach out to James Robert Lay at the Digital Growth Institute.
This article was originally published on May 12, 2023. All content © 2023 by Digital Growth Institute and may not be reproduced by any means without permission.