The Biggest Challenges Facing Financial Services – Part III

August 27, 2018

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A four-part series originally published on LinkedIn.

Part III: Getting Comfortable with Experimentation

In our second installment of this series, we covered how new customer-centric collaboration models require us to rethink our concepts of ownership and control.

As an extension of that exercise, we must also change our attitudes about experimentation and failure — key concepts on the path to achieving digital maturity.

According to Deloitte’s 2018 Digital Banking Outlook, “Digital disruption starts with experimentation, iteration and relinquishing command.” What I love best about the statement is what it doesn’t say: That going it alone today is also a kind of experiment, just one with poorer chances of success and recovery. 

It’s no surprise then that respondents of a recent enterprise IT survey reported that the biggest challenge impacting a company’s ability to compete in a digital environment is experimentation and taking risks.

Of course, this challenge is not particular to financial services however, I would guess that many transformation champions and project owners in our region and elsewhere would probably rather walk on hot coals than utter the words “experiment” or “failure” in reference to their work. This mindset clearly needs to change.

Product vs. Customer Centric

It would be so much easier if we could just choose between operating and transforming, but unfortunately, we need to simultaneously do both. As such, we need to come to terms as an industry with the fact that most of us are still organized around products, fragmented lines of business and area silos rather than customer segments, as many experts recommend. This is perhaps the biggest obstacle to achieving digital maturity due to its immediate and often underappreciated consequences.

Today, few if any banks and FIs can honestly say that they are dazzling their customers. This is a problem in a world where the importance of customer experience (CX) is difficult to overstate, and both consumers and business users are becoming increasingly restless in their desire to have more seamless, user-friendly interactions.

The takeaway is that current organizational and delivery models are failing to meet customers’ expectations, and if left unchallenged, will not only inhibit the adoption of new technologies, but also the introduction of new collaborators. More on that in our next installment.

In our final installment, we’ll explore how legacy decision making structures impact digital transformation initiatives and share some advice on setting project roles and reach.

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