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Becoming a Digital Bank: Evolution or Revolution?

A question that comes up regularly is should the bank evolve to a new digital model, or does it need to bite the bullet and transform?

Evolution or revolution?

That’s a question that only the bank’s CEO and management team can answer, and needs to consider:

  • the current state of the bank;
  • its ability to serve customers effectively;
  • the agility to maintain parity and competitiveness with other banks;
  • the capability to adopt and adapt to new customer demands and new technologies;

and so on and so forth.

Actually, that’s complete tosh.

That’s the way to cop out and escape making a decision.

That’s just excuses for not changing.

How come?

Because a company that wants to truly compete as an effective provider of service to customers should start with a different question and a different point.

That’s my advice to banks anyway.

Where should they start?

At the beginning.

Start with the customer.

Start with the customer today.

Start with how you want to relate to that customer.

Start with the question: how do we reach that customer today?

Start with a map of how and when you think you will touch the customer.

Map out every customer interaction touchpoint.

Create a heat map of the most important touchpoints where you can excel, differentiate and compete.


Now the bank you build will either be an evolution from where you are today to where you want to be in that customer engagement model tomorrow, or it might demand a revolution.

The answer will be based upon how radically different is that bank vision of customer interaction tomorrow to the bank you have today:

  • How costly and how difficult will it be to transition to the vision you have created?
  • Is it going to be worth it in terms of upheaval and change?
  • Is the organisation structure capable of the move?
  • Will you impact customers through this change?#
  • Will those impacts create potential systems or systemic risks to the customer relationship?
  • Will customers relate to the new bank?
  • Does it require a different brand and presentation to be relevant or will the current bank be just as appropriate?

and more and more questions.

So there is no simple answer as to whether becoming a Digital Bank is an evolution or a revolution, as it will differ for every bank, but I would start with the vision first.

The vision is: if I could build the bank today for the customer relationship we need via digital channels, would it be revolutionary different to the bank we have today, or an evolution? and that comes back to that heat map of customer interaction.

It all comes back to the customer.

The customer is key.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • Very good as usual Chris. Perhaps also add in a a strategic framing of what the bank is trying to do; it will also impact the solutions you deliver.
    To me, banking facilitates two things – it enables transactions today and transactions tomorrow.
    Thought of like that, puts a new spin on the solution and how it is delivered.

  • Christian Ball

    Great article, the focus on what a bank needs to be from a digital customer perspective is spot on. Of course the question of ‘the how’ has implications based on change and innovation capabilities as you note.
    The ecosystem for financial services is becoming ever more connected to the wider economy – driven in part by challenger innovation models – the answer for established banks may embrace evolution and revolution with innovative challenger banks as aquisition targets to drive pace and capabilities.
    After all, our digital north star businesses – Google, Yahoo, Apple etc – already demonstrate that, in part, maintaining innovative pace is achieved by aquisition as well as by in-house innovation.
    This has implications for banks own capabilities – to build effective aquisition engines that identify, nurture and utilise its aquisitions cross brands.
    Given the large number of possible new challangers (based on banking license application numbers) some of the VC money backing them are surely banking on it!

  • I guess one challenge for this is that the customer of today will be quite different from the customer of tomorrow and more so the next generation banking customer. In some cases change will be rapid, in others it will be a generational shift…and as we all know predicting the future is easy… as long as you don’t have to answer for it when you get there ;o)