Unlocking Growth Through Holistic Digital Transformation

Customers are becoming increasingly demanding and discerning of the products they use and the brands they interact with. This trend is particularly strong amongst the younger generations who are looking for more authentic, purpose-led organisations to meet their needs. This paradigm shift has encouraged many new players to enter the Financial Services market, all competing to engage customers in a purpose-driven way.

This increased pace of change, combined with the shift in expectations, is putting even more pressure on financial organisations to fundamentally transform if they want to succeed in the future. Organisations that prioritise customer-centric approaches powered by  data-driven digital strategies , and proactive leadership are more likely to succeed through enhanced customer experience and improved operational effectiveness. We are currently examining this further and will publish insights on this later in 2024.
 

Unlocking Growth Through Holistic Digital Transformation

A sustained and integrated digital transformation journey will unlock customer growth with impact and address transformation challenges, through expanding the customer base, increasing customer engagement, and optimising customer acquisition and retention. We have identified 3 transformation pillars to help structure that journey: Customer Centricity, Technology Enablement, People and Culture.

Transformation Pillars
 

• Customer Centricity: Transforming the customer proposition from traditional balance-sheet driven products (e.g. generic loans) to responsible, purpose driven products and services (e.g. loans that divert some of the interest payments back to community projects or favourable rates for green home improvements).
• Technology Enablement: Transforming the architecture from legacy, monolithic and process-centric to a modernised modular architecture based around customer profiles, events and networks.
• People & Cultural: Transforming the culture and ways of working to a “customer value centric” culture – always driving to give customers more of what they want by supporting and equipping your people to deliver performance and improvement together.

Technology enablement provides the tools and platforms that empower employees to work more efficiently and innovate, while people & cultural transformation ensures that the workforce is adaptable and collaborative, embracing new technologies and ways of working. When viewed as interconnected elements rather than isolated strategies, the transformation pillars deliver improved outcomes for customers and     the organisation and foster a collaborative environment.

Delivering a successful transformation requires a holistic approach which can anticipate and adapt quickly based on customer needs and wants, emerging trends and progress against Objectives & Key Results (OKRs). The organisations most likely to succeed galvanise their people around clear strategic objectives applicable through all corners and levels of the organisation - with fully informed, engaged and clear leadership, along with a commitment to sustained investment from the top down.
 

A Balanced Strategy
 

A successful organisation seeks to balance customers, technology and the experience for their people. When executing your strategy, it’s important not to over focus on one transformation pillar and neglect the others. Being too focussed on one of the core pillars or not giving them enough attention will cause a range of unintended consequences:
 

Customer Centricity:
 

• Unbalanced Over-Focus on the Customer: An over focus on desirability, although rare, will have negative consequences for the success of your transformation. An organisation with a heavy imbalance towards customer may struggle to make decisions on prioritisation or get products shipped at pace. This is because, alongside desirability, other factors need to be considered: technical feasibility, commercial viability, ability to get products to market and responsibility i.e., ethics, sustainability, inclusion. A balanced view of customer centricity against other factors can be achieved by conducting market research, developing an efficient and engaging system of work within teams and having a clear purpose-led north star for the initiative or product and the organisation as a whole.
• Forgetting the Customer: A lack of focus on the customer is a common mistake – without a laser focus on customer needs, transformations can quickly go off course and miss target business outcomes. Without a customer focus, organisations will struggle to deliver products and services that meet customer needs or to compete effectively in the marketplace. This can lead to reduced revenue, decreased customer loyalty, and ultimately, failure.

Technology Enablement:
 

• Unbalanced Over-Focus on Tech: Digital Transformation is not solely a ‘Technology Transformation’. Missing the people, culture and customer angles will impact the feasibility of the overall solution, benefits to the customer and evolution of workforce skills – ultimately growth and innovations. Technology should act as an enabler that underpins a Digital Transformation but cannot be the sole focus.
• Tech Underinvestment: One of the most common pitfalls of Digital Transformation is inadequate investment in underlying technology and infrastructure. This can include failing to invest in new hardware, software, or systems that are necessary to support Digital Transformation initiatives – eroding the ability to ‘future-proof’ the organisation and constraining innovation. It is imperative to allocate sufficient funding and resource, with the ‘right capability’ to technology and infrastructure investments and to prioritise these investments based on their alignment to strategic, long-term goals and opportunities, not just ‘quick wins’ or pet projects. However, due diligence is crucial – understanding the targeted outcomes for investment and the mechanisms to measure impact is essential. Reflecting on supporting infrastructure is also key, both in terms of its ability to support near-term priorities and longer-term changes, such as shifting to cloud-based, platform-based architectures. This reduces the organisation's reliance on outdated hardware and streamlines innovation, making it easier, faster, and more cost-effective to integrate

People & Culture Transformation:
 

• Unbalanced Over-Focus on People & Culture: An over focus on developing people and shifting culture, behaviours and mindsets is seldom seen in reality, but it is not uncommon to see these initiatives being run in relative isolation to other pillars. Focusing solely on people and culture aspects without lockstep alignment to other transformation pillars can result in an ineffective implementation of new technology, which can lead to delays, cost overruns, and a failure to achieve the desired outcomes. Other potential risks include overlooking innovative opportunities to develop next-generation digital platforms and tools to build customer satisfaction and a skilled workforce.
• Neglecting People & Culture: By not introducing employees to the transformation in a timely and sufficient way, it often leads to change resistance. This resistance can manifest in various ways, such as employee unwillingness to adopt new processes or technologies or being hesitant to embrace new ways of working. Overlooking engagement, communication, and an enabling culture can also lead to uncertainty and disconnection from the organisation, resulting in decreased employee morale, higher turnover rates, and a lack of ownership and accountability for the success of the transformation initiative.
   

Conclusion
 

The organisations most likely to succeed in the coming years will be those who embrace each transformation pillar equally and recognise that delivering successful transformation means continuing to evolve without standing up ‘the next big thing’ every few years. Instead, it’s about having a model which supports agility and adaptability, embracing change as a constant.

Doing this well means that each piece of the puzzle is not just ‘aligned’ but inextricably linked. In summary, those most likely to succeed will:

• Ensure that the right technology is invested in to meet customer needs and wants
• Design a targeted customer centric digital solution and enable colleagues to provide best-in-class evolving products and services to customers
• Create, communicate and embed a unified purpose-led vision, aligned to the strategic objectives of the organisation
• Ensure the right leadership is in place to drive and sponsor the change and that realistic funding is consistently available
• Optimise transformation delivery by establishing a strategic delivery management capability, which can anticipate and adapt quickly to deliver the desired outcomes at pace, but in a safe and controlled way

If you would like to talk further about how to achieve success with digital transformation within your organisation, then please reach out.