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The criticality of humanity in banking digitally

One of the big challenges in discussing digital is how to get there. It's a big leap for many banks hamstring by heritage and the question is can they get there? Should they start again? Should they launch digital as a separately branded bank, rather than trying to evolve the current organisation?

These are all big, critical strategic questions that banks should spend considerable time debating before beginning.

In that debate a core question has to be: if we do this, we have to do it wholeheartedly. For example, the advantage of transforming the existing bank is that the existing bank is likely to have the strongest leverage.  The bank has 1,000s of staff with great front-line knowledge of customers and customer needs. The existing bank had probably a few million(s) customers too. So the opportunity and challenge of digital in evolving the current bank is three-fold.

First, how to create a digital bank;

Second, how to evolve the current banks operations to become that digital bank; and

Third, how to bring the people – employees and customers – across to the new digital bank platform.

It's probably the last piece that is least understood.

Creating a digital bank and moving current operations to new platforms isn't easy, but good, competent project managers can make this happen.  Making humans happy with the change is the hardest piece.

Do you move branch agents into social media service agents?  Do tellers become tweeters? Do contact centre contacts become video centre contacts?  And how do you reassure people as they make the change, especially if large numbers of them are being made redundant as the physical structures are replaced with the digital structures?

These are the crucial questions that banks such as Lloyds and ING must be asking themselves as both banks have recently announced major staff layoff progammes as the banks invest more in digitalising.

There are no easy answers here, but the critical factor has to be a strong internal communication system.  You will never have happy customers if you have unhappy people. And even with happy people, customers will wonder what you are doing and why.  Do they have to use the new digital services or are they optional? Is there an additional charge or is it same as now and can we use all the old services too?

In other words, customer will have as many questions as staff, just different.

This is why I claim that becoming a digital bank is as much about culture and communication as it is about technology, if not more.

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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  • This type of transformation requires leadership, courage and resilience.
    Difficult decisions have to be taken at one time. As we say in chile:
    The feints shots are taken at once!

  • Manish

    Chris, Agree with you the digitization journey is like shift of culture more on foundations of unified technology. This culture is complex as its more of business and less of emotions.. which i think needs to be balanced well to succeed by banks.

  • The biggest strategic question is whether the new challenger or Digital banks are more profitable than the existing ones!
    In the first half of 2014 Lloyds Bank made £1.8bn profit before tax on revenues of £8.7bn. If I were sitting in a traditional bank looking to start a totally new digital one, I’d look hard at those numbers to see whether they can be improved upon.