How to adapt your bank to an uncertain digital future

Boards of many global financial services firms do now identify the need to adapt business models and strategies to survive changes to customer behaviour and market structure.

Yet even as they actively seek solutions, some struggle to balance the required change with their incumbent business.

Their existing businesses seem to perform adequately on both an absolute and relative basis; regulatory remediation is all-consuming and the true nature of the challenge from new entrants remains disturbingly unclear.

In these environments, 'digital transformation' can too easily remain an incremental activity - an optional, experimental idiosyncracy.

When will "mobile banking" become just "banking"?

Boards should commit significant time themselves to explore these fundamental changes to their markets, customers and competitors. 
They must do this to develop sufficient confidence in their strategic vision and to accurately assess the delivery capability of their teams.

Can an organisation which delivered many decades of growth in times of relative stability be adapted to a wildly uncertain, digital present?

To adapt the corporate mindset to prepare for a successful, sustainable future, many areas need to be thoroughly explored and choices made - many of which may not be obviously considered part of a traditional digital/IT agenda.

For example:

  • What exactly is the nature of a successful FS brand in the future?
    What precisely will customers value (and reward) from a bank?
    What could - and should - be commoditised in consortia and what must be retained by individual FS brands as sources of differentiation and value creation?

  • For a 'customer-led' business strategy to be authentic, how best to adapt to an uncertain future where digital drives customer expectations to evolve faster than traditional models can adapt.

  • How to embrace (rather than resist) changes in customer expectations. To develop scalable platforms to encourage diverse customers to engage with the brand in their preferred manner - rather than the way the bank mandates.

  • How should performance management models be upgraded for a new normal where adaptability and future execution capability are no longer accurately indicated by past performance.

  • What is the optimal model for managing programmes of innovation - specifically the engagement with incumbent business teams - to optimise returns.

  • How best to move digital beyond a mere marketing façade - closing gap between marketing promise and proof.

  • How to neutralise the catastrophic effect on change of an intractable organisational culture combined with poor strategic communications.

  • How to change the tone of approach to regulatory compliance to consider it a real commercial opportunity, rather than a burden which absorbs most change capacity.

These are fundamental issues which should not be ignored.

I'm optimistic for the incumbents just as I'm excited for the new entrants and many FinTech players.

Incumbent organisations remain stocked with talent, experience and energy. To adapt these to a digital future, the Board needs an action plan

An action plan to change the mindset, time horizon, motivations, culture and rewards to get most out of these assets could conveniently fit under a 'Digital Transformation'umbrella. 

But I believe it's plainer than that.

Less transient, more sustainable.

It's simply 'business' - 'the business of banking'.