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Digital Banking, so what?

April 26, 2018 - Vishnudatta Harihara Keshavamurthy Product Manager, Infosys Finacle

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GAFA, Airbnb, Netflix, LinkedIn, UPI, Open Banking, PSD2, digital transformation, ecosystem play, analytics, AI, Blockchain and some more – together they constitute the what, why and how of digital banking. In the same breath we also talk about being cloud native, using RPA, establishing a start-up culture and so on, to recognize and accept both outside-in and inside-out strategies to become a Digital Bank for the present and future.
When they start their digital journey, most banks go through a “me too” syndrome, trying to stay relevant, and be recognized as tech savvy by analysts, peers and customers alike. In this process, they often reinvent themselves. In my view the outcome of this journey is dependent on how well banks accomplish this reinvention.

The journey:

Most banks, more or less, take the following approach to their digital transformation journey:
Define where they are, where they want to be and how they want to get there.

  • Define where they are – this phase can be quite a journey on its own and is mostly done in a bottom-up manner. This is the stage when banks open their eyes to the ground reality.

  • Defining where they want to be – this phase calls for introspection, external inputs and the preparation of short, medium and long term strategies.

  • Define how they want to get there – this phase focuses on things such as the organization’s culture, people, partners and investments.

Checkpoint review:

Banks on a digital transformation journey could find themselves falling short of their set goals at different stages owing to the following reasons:

  • The fast pace of digitalization, which requires the transformation strategy to be revisited or at least re-examined every 6 months.

  • A race against time and especially against nimble competitors, such as the likes of GAFA.

  • Complexity of transformation, causing both long lead times and internal resistance to change, which can derail the program.

And so what?

This brings us to a very pertinent and intriguing question: what is digital transformation?
What matters most in business is the health of the business itself and its profitability.
Earlier, business used to drive the IT landscape, but now we see that IT is driving business. While business continues to lead the change, it relies on IT to not just enable, but to play an important role in the achievement of its goals.
Though this can vary from organization to organization, a simple checklist driven framework of “WHAT” is necessitating the change, and what it is leading to, will make the journey more reliable and meaningful.
The checklist driven framework should be guided the following:

  • If it ain’t broke, don’t fix it: Dig deep to understand why something needs to be changed. Amazon’s back dated press release is a good example here.

  • Ask if the customer will get any value out of this change.

  • Also ask if the bank is deriving any value: This is very critical for avoiding the “me too digital syndrome” and ensuring that the decision is based on the impact on revenue, profitability and branding.

  • Well, it could be as simple as this – “we know that we need to change this, it’s time!”

Each bank should use this kind of checklist to evaluate its proposed changes to make sure that at least some of the boxes are ticked. Something that is applicable to a competitor need not be applicable to its own organization. Also, the bank need not have every technology under the sun (cloud!). Last but not least, it should never lose sight of profitability as that is what will allow it to be what it is in the present, and also stay relevant in the future.

Vishnudatta Harihara Keshavamurthy

Product Manager, Infosys Finacle

A passionate product management professional, an intrapreneur at heart. Key interests: Studying M&A, agriculture and F1 racing.

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