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Digital Transformation

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Fahd Nizam

on 29 March 2015

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Transcript of Digital Transformation

Why ?
In This Talk ....
Need for change
What is Digital Transformation ?
Lessons from History
Technology Innovations In Banking Sector
Digital Banking and Future of Bank Branches
The Digital Challenge to Retail Banks - The Myths
How to get it right ?
Key Takeaways
Change is Imperative ...
Change is Imperative ...
What ?
Change is Imperative ...
Lessons from History
Change is Imperative ...
Technology Innovations
Change is Imperative ...
The Myths
Change is Imperative ...
How to get it right ?
Change is Imperative ...
Key Takeaways
Change is Imperative...
Shifting Preferences
To Digital...
From Analog...
All this is leading to an unparalleled impact on the customer journey
For the new age Customer, it's not just about "value for money"
it's more about "the Experience"
... if challenging customer demands are piling pressure ; there is an increasing need to adhere to regulatory / compliance mandates
A perfect storm in the making
Digitize or Die !!!
What is Digital Transformation ?
Digital Transformation refers to the changes associated with the application of digital technology in all aspects of human society. Digital Transformation may be thought as the third stage of embracing digital technologies : digital competence -> digital literacy -> digital transformation
- Wikipedia
Digital Banking
Case Study

The Successes and the Laggards
How did an upstart like Netflix succeed in beating an entrenched opponent like Blockbuster ?
Netflix executives understood that an emerging technology was rapidly changing the delivery of movie rentals
When faster broadband and video compression allowed YouTube and other Web 2.0 sites to erupt on the scene in 2005 ; Netflix realized the need to go "Digital".
The second part of Netflix's technology strategy was to avoid the burden of retail outlets by operating online. With only a few warehouses and offices, the company became a virtual organization with no retail stores and sales employees
Blockbuster continued to expand on the basis of "old school thought" failing to realize the changing customer patterns and the need to adopt to technology
Strategy of Internet Streaming, convenient customer service and a virtual organization to deliver it cheaply and flawlessly were Netflix's "game changing mantras"
Netflix illustrates the central role that emerging technology plays in transforming an industry

Size and market dominance are no defense against technology innovation

Companies which sees a serious threat must react early and decisively
Technology Innovations

Mobile Payments
Technology Innovations

Social Media
Wells Fargo has a dedicated Twitter team to provide financial tips for their followers and handle their service requests
ICICI Bank has launched banking services on Twitter
95% of the top 100 brands use Twitter as a customer service platform
Technology Innovations

Banks are betting on big data analytics and real time execution to better engage with customers
Technology Innovations

Banks are overcoming their concerns about security and control to take advantage of the business benefits of running core applications in the cloud
The sixth largest bank in Spain, Bankinter , uses the Amazon cloud to run credit risk simulations in 20 minutes, down from 23 hours before
Commonwealth Bank of Australia said moving storage to the cloud cut costs in half. Expanding technology has also become easier and cheaper; while before it took the bank eight weeks and several thousand dollars to stand up a new server, now it takes eight minutes and 25 cents to do the same thing in the cloud, making the bank much more responsive to changing customer demands.
Technology Innovations
Going Mobil
Bank of America uses big data to close the back door, retaining customers who may be in danger of leaving for a competitor
Technology Innovations

The Spanish bank, Banco Sabadell, has a Google Glass app that lets users make basic transactions and contact customer service from the device. The app also uses augmented reality and taps into GPS to lead customers to the nearest ATM or branch office.

…….and they're not the only ones. Both CaixaBank and Westpac have similar apps
Citi is one of the first banks to create an app for Apple’s Watch, offering basic account and transaction information via the smartwatch
What is Digital Banking ?
Digital technology is introducing a new demand for how banking services are delivered
“At its simplest level, a digital-only bank provides end-to-end banking services primarily or entirely through digital platforms”
What is Digital Banking ?
When engaging with a digital bank, consumers should benefit from the following:
Shop for a financial institution online or with a mobile device
Open a new account by using a computer, tablet or mobile device using image capture to save steps
Communication with their bank through the channel of choice, potentially with live video tools
Financial insights pre-login, such as balances, recent transactions and product recommendations
Real-time and secure transactions online or at the point of sale with a mobile device
Personalized and predictive offers that leverage geographic as well as contextualized insight
Real-time digital money management including alerts and notifications
Integration of financial services with daily activities
Digitization is not simply a defensive strategy against bank and non-bank competitors. It should also be a way to increase revenue through improved consumer insights, combining algorithm-based banking with the human touch.
The Future of Bank Branches
The Digital Challenge To Retail Banks - Myths
You have plenty of time to figure this out.
It's all about the"apps".
We don’t need to invest in digital capabilities because retail bank customers do not change banks
Adding digital capabilities is a job best delegated to the specialists in the IT Department
Being a digital banking pioneer is not worth the risk, when a bank can quickly copy at lower cost what a competitor has done
...remember Digital Transformation is a journey and not a destination
The Digital Transformation Journey
Senior business sponsor to champion
Assess the organization's digital maturity level
Make it a business led design ; engage the organization
Forecast client channel behaviour and identify key gaps in experience ; to build your multi channel ambition
Re-allocate investment towards digital , away from traditional channels
Engage technology innovators in your program vision
Institutionalize strong governance approach in the transformation journey
Rationalize the application portfolio to reduce complexity and support digital future
Use an iterative quick win approach to enhance the digital adoption
Assess the organization's digital maturity level
Continuously monitor digital behaviour and adapt to shifting patterns
7 Actions - A Digital Banking "To Do" list
Extend successful products with innovation
Monitize Digital
Help customers with money management
Digitize the sales experience
Be everywhere - 24/7
Let data drive decisions
Mobilize Employees
Digital Maturity Model
Success will depend on constantly engaging stakeholders, leveraging new technology and potential partnerships to enable consumers and extend existing business models to build differentiated products and services
A clear defined roadmap with BOD / CEO sponsorship is a key prerequisite
Digital Banking isn't about "one size fits all"
There is no "Big Bang" approach ; short term wins are the building blocks to success
"Being out of business" is he cost of not adopting to digital technology
Digital Transformation isn't a project ; its a mindset of continual learning and innovation
Digital World is creating a multitude of touchpoints
Technologies and specially digital technologies are trasnforming the business lanscape
Full transcript