The future of banking: 3 critical succes factors for banks in their transformation from manual to digital

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3 critical success factors for banks in their transformation from manual to digital

An agile approach to data management and data quality

Despite the fact that the financial industry was quick to embrace new technologies such as robotics, there are still many departments and tasks that rely heavily on manual processes. How to move from manual to digital? What are the critical success factors?

Digitizing processes to power performance

With all the reporting obligations within the industry – many of them on a monthly basis – it is often hard to find the time to fully digitize the underlying processes. The drawbacks are obvious: manual processes are time-consuming and error-prone. Also, since the focus is usually on compiling the reports, there is hardly any opportunity to interpret the results and improve overall performance. So how to fix this dilemma, and move from manual to digital without interrupting your ‘business as usual’?

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3 success factors

The answer is in the right mix of technologies, methodologies and ways of working, in close collaboration with the people who need to work with these technologies. For instance, at one of our clients in the banking sector, a digital transformation in the field of data management and data quality improvement was required – without interrupting daily routines. New technologies and new ways of working were embedded to facilitate and improve reporting processes. Our approach was based on three success factors:

  1. Ownership
    Leaving the ‘ownership’ where it belongs – with the people who are involved in the processes;
  2. Trust
    Building the trust that is needed to focus on long term success instead of short term wins; and
  3. Teamwork
    Working in multidisciplinary teams with different types of expertise in the field of hard technical skills (e.g. data analytics and robotics) as well as soft skills (governance, assurance, and agile ways of working).

Ownership

To start with the latter: one of the characteristics of agile methodology is working in short cycles. In order to avoid the interruption of daily routines, we were able to cut up long and complicated processes in ‘increments’ – small steps that we could define as a ‘working product’. We focused on the ownership of each product and discussed exactly what improvement was needed with the owners. Then we automated these steps as quickly as possible – two weeks per ‘increment’ instead of three to six months for entire processes – so the daily routines would not be disturbed, and offered the ‘product owners’ and anyone who worked with the product the opportunity to set priorities and keeping close track of ‘delivering the right things’.

Building trust

By delivering a new working product every two weeks we were able to speed up and improve the entire process bit by bit, help the owners be ‘in control’, and build involvement and trust from the start. As the people involved learned to trust the results, we created space to invest in long term solutions and not just short term wins.

Teamwork

Working in multidisciplinary teams with members that have complementary skills and knowhow in the field of e.g. robotics, analytics, agile working, assurance, data management and data governance, and learn how to combine these skills, is another success factor. The team members were able to challenge each other, review each other’s work, and become better at what they do. This was very rewarding and it helped to create an inspiring and fun atmosphere. Ownership and personal development were continuously encouraged, which is an important part of any transformation.

Lessons learned

A very important lesson learned is not to go too fast. If a little time is invested in describing results at the start of every increment and in building a team with members who are willing to invest in their relationships and understand each other, it is easier to create long term success, and deliver value to key stakeholders. Also, team members need to know exactly what they are supposed to do, so they will come up with solutions themselves. This may take some time at the start, but will save time eventually. Last but not least: end users are part of the process as well. They may not be as tech-savvy as the people who develop solutions, so they need to understand the value of the solution and how to use it.

Results

The results of this approach have been worth all the effort. In this case, we have reduced the handling time in processes by 20%, which has led to a considerable cost reduction and acceleration of the performance. The turnaround time has been significantly reduced. Whereas it used to take at least one week for multiple resources to compile one of the key reports, it is now produced fully automated and is available at any given moment in time. Finally, reliability of key data has been improved hugely since processes require significantly less manual activity while using data from a ‘single source of truth’. Manual adjustments have become a thing of the past, as well as mixing up several data sources. In short: the overall performance and quality have been powered tremendously – whilst digitizing the ‘business as usual’ without interrupting it.

The Future of Banking

Since the beginning of 2018 we have been sharing a range of articles with you on the future of banking, based on the ‘seven wicked problems’ we have identified. Embrace digital is one of these ‘problems’. Our research skills and day-to-day experience in working with banks have allowed us to dive into these challenges more deeply. By sharing our insights, we strive to help you with the choices you face in your day-to-day work and with aligning your leadership, culture and organizational structure to a fully digital mindset, optimizing the use of proprietary and external data. Sign up for the email alerts to make sure you won't miss any of the articles about the latest insights and solutions on the future of banking.
 

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