By Vikas Krishan, Chief Digital Business Officer and Head of the EMEA region at Altimetrik
The traditional concept of ‘digital transformation’ often misses the mark, particularly when it prioritises a technology-first, ‘big bang’ approach to large complex transformations, or an approach that tries to utilise technology modernisations, delivered via agile-type methodologies, solely as a proxy for business improvement. As a digital enablement company that collaborates extensively with financial service providers, and FinTechs, we at Altimetrik have witnessed firsthand the pitfalls and disruption that can arise from such strategies. That is why we pioneered a new approach called the Digital Business Methodology—a strategy that emphasises a balanced, incremental process integrating technology with people and culture at every step of a client’s journey. We very much believe that the power to truly become a digital business lies in putting people and technology side by side, working towards the same business goals.
Why digital transformation projects fail
Many Financial Services companies continue to struggle with the complexities that come with transitioning to a seamless digital business model. For those decision-makers in the Financial Services arena, there is an onus on speed, consistency, and scale and it is these three things that act as the primary levers for their making the transition to becoming a digital business.
These three reasons alone can help your business stay far ahead of the competition and continue growing. We should note that this is not digital transformation; it is a business-first approach that pushes and grows with you. The adoption of a digital transformation method, more specifically an approach that relies on large complex change management, has deterred many Financial Services firms from accelerating their progression to becoming truly digital, given the long and laborious process that often fails to deliver short to medium-term outcomes. This approach is centred on long-term goals but often fails to deliver noticeable, tangible outcomes quickly and instead can cause huge disruption to business operations. This strategy also struggles to adapt to constantly evolving financial market demands.
As a result, the business only sees the value of its work and investment after completion. By that point, the industry landscape will have shifted, rendering the project already outdated and arriving too late to be effective.
An all-or-nothing approach amplifies risk
Approaches that require significant time to deliver business value pose significant risks due to the emergence of unforeseen variables. These uncertainties can jeopardise the intended outcomes of digital transformation projects. Often, a large, complex transformation project sets out with a specific goal, but by the time it nears completion, that goal may no longer be relevant to the industry or business. Moreover, as priorities shift rapidly in the business world, what was once deemed essential might become obsolete. It is inefficient to wait years for a result in the financial environment where user expectations evolve quickly, as any solution implemented too late is likely to be irrelevant.
What do Financial Services need?
Financial service companies frequently exhibit a reluctance to implement changes due to concerns about costs, potential disruptions to operations, and doubts about possessing the necessary skills and tools to succeed. These concerns are well-founded. The Financial Services industry has been reluctant to embrace digital business methodologies due to a lack of clear strategy, inadequate leadership commitment, an inability to effectively measure business outcomes and insufficient engagement with stakeholders. It is vital that those in C-suite positions focus on a business-led approach, centred on outcomes rather than being led by technological change as the end goal. Consider a core aspect of financial services, namely retail banking. It revolves around ensuring that the right products are visible to the right people at the right time. This is a business or user outcome and not technology use case. To deliver this successfully firms that partner with Financial Services players should be practitioner-driven at their core and not just technologists for whom the industry is secondary.
Financial institutions must start with their customers’ problems and work backwards, as only then can they deploy technology to address these issues effectively. The deployment of technology alone is not sufficient to ensure success. The leveraging of an ecosystem with elements as diverse as a clearly defined product roadmap, clearly cascaded OKR’s (Objectives and Key Results) in conjunction with strong governance and transparency is a solid starting point. Ensuring the methodology to deliver this Digital Business outcome through the effective use of product management, architectural design, engineering capability and effective deployment is also key to ensuring that our clients continuously generate value for themselves and enhance the experience for their customers.
Our experience has led to a shift through our digital business methodology—an incremental, balanced approach that integrates technology with people and the overall business culture. This strategy focuses on our industry practitioners partnering with our clients to help define and deliver business-led objectives and involves key stakeholders with the aim of simplifying and streamlining operations, platforms and technology to improve decision-making.
