Reimagining the Banking Services Customer Value Proposition
Reimagining the customer value proposition across the banking industry is essential for reinventing the customer value chain. Cashless transactions are becoming more widespread, and this presents an economic opportunity for disruptors with alternative business models that integrate digitalization at its heart.
New digital banks are holistic and un-siloed, enabling a global ambition thanks to delocalization of digital services. This is enabled through the cloud, artificial intelligence (AI) or machine learning (ML), and robotic process automation (RPA) technologies. Incumbents lose their advantage in the face of these digital technologies, enabling disruptors to provide innovative and holistic services to their customers.
While traditional banks have a safety net in the form of reputation, market presence, and regulatory bias, these new business models are rapidly changing the banking landscape. Routine bank accounts and ATM transactions will become obsolete, with digital-first service provision becoming the priority for consumers. Current leaders must digitalize their internal operations and develop higher levels of customer intimacy to brace themselves for this digital storm.
Only 7% of Companies Are Delivering on Their Transformational Initiatives
Our research has shown that 30% of companies will fail to survive this decade due to an inability to evolve digitally. To address this negative trend, we have developed the Digital Enterprise Evolution Model™ (DEEM).
Digital Enterprise Evolution Model™
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DEEM allows our clients to recognize digital evolution patterns, implement benchmarking and prioritization strategies, and initiate application management protocols to satisfy stakeholder and market requirements.
Many Banking Firms Sit Outside the Vision-Driven Quadrant
There are a finite number of competitors in the banking industry. This increases visibility between competitors, enabling combative innovation and proactive product-service development.
Still, most banking firms sit outside the vision-driven quadrant, putting them at significant risk in the face of digital disruption. This demonstrates a lack of urgency among banks; despite large players reporting significant investments in digitalization, sub-optimal execution of digital transformation roadmaps is undermining their efforts.
Many banking companies report large investments in advanced analytics and process digitalization, including robotic process automation (RPA). There is still room for improvement for these firms when developing an integrated strategic approach for the digital era.
Human Capital Management (HCM) in the Banking Industry
Future banking models must address the customer lifecycle, the emergence of cashless societies, and include the development of innovative alternative banking products or services that go beyond basic service provision.
To enable this, banking firms need talent. Human capital management is another area with large investment from banks, where experience is vital to navigate this complex and highly regulated industry. The largest investment in HCM is through digitalization of processes and the adoption of advanced analytics, assisting with the acquisition and retention of banking talent for incumbents.
To enter the vision-driven quadrant, CEOs must seek to benchmark their operations and form comparisons against leaders in the space. CEOs can benchmark their banking operations using models like the Trianz Digital Enterprise Evolution Model (DEEM™).
In summation, banks must focus on reinventing their product-service portfolios, catering better to consumer expectations, and optimizing their workforce for better customer experiences (CX) and employee experiences (EX).