Other parts of this series:
Banks that effectively transition to digital take a planned sequential approach, investing in and out of specific technologies to create a solid foundation for future digital capabilities.
In a joint survey conducted by Accenture and Oxford Economics, banking executives shared their belief that digitization is a key strategic imperative to help them remain competitive and pursue new business opportunities into the future. Their confidence is well-founded:
- 86% of banking respondents who’ve invested in data analytics say these tools have been critically important in helping them reach their organizational goals
- 63% credit data analytics and 53% credit cloud capabilities with delivering the greatest benefits as efficiency drivers
Banking executives view these technologies as laying the groundwork for the implementation of next-generation technologies like artificial intelligence (AI) and machine learning and believe these new technologies can be critical assets to their businesses in the future. In fact, 77% of banking executives surveyed in our joint study expect virtual assistants to handle over half of their firms’ customer interactions within the next five years.
In my previous post, I shared the broad context for a financial services digital transformation. In this post, I’m going to share how banks are applying current digital technology to set the stage for adopting expanded digital capabilities to allow them to stay competitive well into the future.
A sequential approach to capturing more value from digital capabilities
Given the complexities inherent to transforming a heavily regulated industry, banks that can integrate digital capabilities are taking a sequential approach, as follows:
- Gradually extricate from legacy systems
- Capture value from proven tools (such as data analytics and cloud computing)
- Strategically integrate emerging technologies (such as artificial intelligence and agile development) into the digital mix
Evolving technology investments
As banks move along the technology continuum, the digital tools they are using are growing in sophistication. There is also strong evidence of a deliberate phasing in and out of technology investments as business capabilities evolve.
For example, currently 47% of banking respondents are heavily investing in customer-facing blockchain. Whereas, investment in internal-facing blockchain is currently at 17%, but anticipated to grow to 33% over the next three year. This seems to indicate that banks are staggering their levels of investment in blockchain and similar emerging technologies in accordance with their business priorities and opportunities for growth.
All of this speaks to the need to take a thoughtful, planned and requirements-based approach to leveraging digital capabilities to improve business performance. In my next post, I’ll touch on the common digital transformation hurdles banks face and share key action steps to take for a more rewarding transformation in the future.
Get detailed results and deeper insights from the Oxford Economics/Accenture joint study in Digital transformation in retail banking: From hype to value