It’s not the Titanic, but don’t wait for the iceberg to hit…
Digital transformation is an opportunity. But are you only ready to focus on the tip of the iceberg?
I’m all for icebergs. Don’t get me wrong – in the right context and the right place, ie – nature. Having the privilege to see the tip of the iceberg from a distance and marvel at the scale of the beauty of the ice sculpture is truly an amazing experience.
At a recent gathering on financial services technology, icebergs came up in a very different context. Remy Paternoster, Global Head of IT platforms and services at BBVA talked about how “Banks are only focusing on the tip of the iceberg when it comes to digital transformation.” And yes, that’s hard to deny. Banks don’t really have that “at a distance” privilege. They are too busy steering the ship to ensure they don’t hit the iceberg head on. With the sheer scale of what FSIs are tackling to get started on the digital transformation journey, improving the user experience and building more apps are generally what the focus is on right now.
And that’s the problem. They are one step behind the customer who is app savvy and looking for the next thing to make life easier. Their thinking: smart phones have been around for a while and are so user friendly, so why don’t we get the same kind of ease of use from our banks? Those are– as Paternoster would say – the “below the iceberg” considerations: Automation of client processes, technology renewal, talent renewal and doing less but better.
The message we hear constantly from the C-suite in financial services: IT and the business must work together with a new shared mindset. Everyone has to be on board and IT must be the enabler, not the driver. Agreed. But we all know the reality – barriers continue to hold back truly implementing change. Research and consulting firm Celent looked into the biggest impediments to improving digital capabilities in banks. The top three barriers: High legacy costs, a tendency to focus on ROI and siloed organisations. In case you’re wondering, also quite high up there are company inertia and day to day business demands that limit a focus on new technology. Sound familiar? Interestingly at SocGen, who started their digital transformation programme three years ago, no one is allowed to talk about legacy – the word is banned.
Ultimately, the divisions across business and IT will become less meaningful as we will all need to be multi-skilled across business, technology and marketing to really thrive and survive in this new digital climate. I end with a comment I heard during a recent event which resonated with many of the C-suite in the room: “Digital transformation is an opportunity. If you’re fearful, you’re missing the point.”
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