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.