Digitalization continues to rapidly reshape banking and financial services (FS) business models. To help their organizations survive and thrive in this fast-moving digital era, CIOs and CTOs need to develop a strategy that enables business transformation by focusing on the customer.
As the financial industry continues to increase its spending on digital transformation and the underlying technology and vendor applications, IT leaders and their teams need to hone their digital strategies. A digital strategy serves as the foundation for successful transformation initiatives and meeting customers’ expectations.
Organizations that do not successfully reinvent their business models through customer-centric digital transformation risk being left behind.
Digital Transformation Is About Reinvention
The FS digital transformation journey is much more than technology upgrades, mobile, and APIs; it’s fundamentally, as I state in my upcoming report CIO/CTO Checklist: Best Practices for a Digital Strategy, “rethinking the relationship between information, people, and processes given new and evolving technologies.”
Rethinking this relationship is essential to the success of business transformation initiatives because it drives how digital and technology investments enable strategic outcomes like new product development. For example, banks are designing mobile apps to enable a range of consumer interactions that go beyond routine transactions like providing options for loan rates or turning off recurring credit card expenditures.
A Comprehensive Digital Strategy Enables Transformation
Customers (and internal partners) now expect interactions and support to be real-time, on-demand, and digitally enabled. As stated in my upcoming brief, a digital strategy, “addresses the definition of different personas that must be serviced electronically, the end-to-end technology enablement of digital processes supporting those personas, the measurement and effectiveness of those digital processes via analytics, and the regulatory compliance of those processes in the context of where and how the processes are performed.”
The ongoing pandemic has heightened the need for banks and FS organizations to reexamine and redefine their existing or develop new digital strategies to address evolving requirements for customer interactions. For example, cryptocurrency capabilities including digital-trading-related transactions are increasingly relevant to reimagined customer interactions.
Comprehensive digital strategies must be built in partnership with stakeholders across an organization—they should align all areas of the business in delivering the expected customer value of transformation initiatives. However, it’s not easy to develop and execute a digital strategy; CIOs and CTOs face multiple challenges such as producing key strategy artifacts (e.g., persona-based digital use cases), diverse core systems, varying approaches to data storage and analytics, and different requirements for digital interactions across product lines.
Digital Strategy Best Practices for FS CIOs/CTOs
To help CIOs and CTOs more effectively develop and execute a digital strategy in partnership with business stakeholders, Aite-Novarica Group identified six best practice considerations. They are summarized in the table below.
The checklist outlined in this table and in my soon-to-be-published report constitutes the handful of key actions FS IT leaders should take to build out the fundamental components of a strategy that enables digital transformation (and achieves regulatory compliance). It helps CIOs and CTOs level set with their senior direct reports and line leaders on the prioritized technology investments and digitalization initiatives required to achieve enterprise transformation objectives (both customer experience and growth-related).
Support for FS IT Leaders
Digital transformation is a complex journey. By adopting these digital strategy best practices, CIOs and CTOs can more effectively facilitate transformation initiatives that deliver the modern, digital experience customers expect and fuel their organization’s growth.
These considerations will be addressed in a new, exclusive deliverable for IT leaders who are members of Aite-Novarica Group’s Financial Services CIO/CTO Advisory Practice.
Interested in learning more about how our strategic insights can help you execute a high return strategy that enables delivering the digital experience your customers expect and realizing the full benefits of business transformation?
Tell us how we can help >> Email me, and I’ll reach out to schedule a conversation on how our digital strategy insights can be applied at your organization and introduce the practice.