Banks and other financial institutions that embrace digital transformation and are willing to make associated policy changes to build an efficient IT offering are best positioned to respond to the fast changing nature of the market and customer behaviours. They’re also favoured to succeed in the long term according to IDC’s report titled Maturity Scape Digital Transformation in Banking.
The report notes that many traditional banks often tentatively commit to the idea of bringing in change and embracing the digital revolution, but their subsequent journey is soon derailed by a lack of leadership from the top down. In contrast, those institutions with executives that are following the DX path resolutely and instil a confidence that this is the future of banking are more likely to reap the rewards of increased growth and profitability.
IDC Financial Insights research Jerry Silva adds: "There is a need for a clear articulation from the top on 'how things are changing' and 'why we must change' to serve as a preamble to the DX master plan that the bank refers to and adheres to consistently. We believe that it is in this area – Leadership DX – that most banks will stumble." IDC’s new report serves as a guideline for banks to improve digital transformation in five notable areas: Information DX, Operating Model DX, Leadership DX, WorkSource DX and Omni-Experience DX.
In order for the world’s leading banks to identify the actions and outcomes required to promote a step-change in the digital value of their services, products, operations and organisations, IDC has suggested that they must consider a further five points when building a coherent strategy for digital transformation. These recommendations include the assessment of the bank’s capability and maturity in the five areas of DX outlined earlier in the report, the assessment of leadership’s ability to steer the business along the correct path for DX and the assessment of its current strengths in the five disciplines.
IDC also believes corporations must attempt to integrate any DX plans within the existing culture, which relates to current operations, talent management, funding and any new digital roles and organisation changes. To ensure success going forward, enterprises should also consider revising the strategic planning process depending on any developments in DX and any other major changes and threats.
Silva concludes: “Digital transformation is the process that will separate the banks that will flourish over the next decade from the institutions that will perish from non-action. The banks that have demonstrated strong innovation and market presence are the ones that are committed to a DX culture, starting with the CEO.”
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