Accenture Banking Blog

Plotting a course through disruption

Undoubtably, 2020 was a year of massive upheaval that put an increased spotlight on the state of digital transformation across industries around the globe. Everything from retail and food services to travel and commercial banking was impacted—and as businesses of all sizes grappled with the challenges of the pandemic, it became clear that those with active digital strategies would be the ones most likely to find solutions the fastest.

While the experience of the pandemic has been undeniably difficult, it has also provided the opportunity to look deeper into the state of the digitalization journey for commercial banks. Many commercial banks had already started their transformation, but now that we are a year into one of the most disruptive events in recent history, it’s a great time to gauge how these major investments are performing and the extent to which the potential of digital is being fulfilled.

Emerging trends for 2021

In our report, “Commercial Banking Top Trends 2021: Plotting a course through disruption and distraction,” we explored the key trends for this year. We wanted to understand what to expect for 2021, what is holding banks back, and how to help make digital central to their culture.

In order to propel organizations into a new era of growth, a truly client-centric, digital-first culture is needed. Of course, most commercial banks have begun deploying digital strategies across the value chain, but the focus on modernization and digitization of basic functions first has resulted in only a smattering of digital capabilities. To balance this, banks need to set their digital priorities to ensure that their technology investments not only deliver the more obvious business capabilities, but also enable traits such as empathy, responsiveness, focus and efficiency. It is critical that banks migrate to a culture in which digital fluency and technology quotient (TQ) — enthusiasm, expertise and value seen across technologies — can flourish.

In 2021, successful commercial banks are likely to be those that master digital fluency and (TQ). We’ve seen that banks with a digital focus are twice as likely to grow as those without it — yet Accenture’s 2020 Global Digital Fluency Study shows that just 14% of companies are digitally mature. In many cases, it’s not the technology itself that is holding individuals back, but the lack of digital infrastructure, culture, leadership, and skills. As banks become more digitally integrated, the entire enterprise will need to be digitally adept, as a result, we believe the role of the chief digital officer could be phased out.

Even though more than 80% of the average bank’s digital spending is on foundational technology, over 50% of business enablement and differentiation will come from the new digital capabilities it introduces. By unleashing the new capabilities enabled by a digital foundation, empowering relationship managers with actionable analytics, providing customers with digital tools to drive self-sufficiency or using machine learning to make powerful predictions amid uncertainty, banks can help unlock true business value.

Clients see the power of digital in their daily personal lives. Commercial banks need to get more serious about the business of experience.

As commercial banks took the lead in designing digital interactions for customers requiring Paycheck Protection Program (PPP) loans, they not only reduced their costs but also expanded their ability to support large numbers of customers. PPP was a great learning environment for all of us and showed that commercial banks can provide a great digital experience. But to avoid disappearing in a “sea of sameness,” banks will need to progress from prioritizing their customer experience (CX) to what we call the Business of Experience (BX) — a new organizational mindset that makes it everyone’s responsibility to create, sustain, and enhance the customer journey.

Plotting a course

While the disruption of 2020 is moving toward the rear-view, the year ahead will bring many distractions, making it difficult for banks to focus on their digital agenda. To stay competitive, banks will need to establish the right structures, investment portfolios and priorities, and leadership to maintain momentum and flourish through the coming year of distraction.

Over the past several years, commercial banks have meticulously modernized and digitized their technology infrastructures — but they are not done yet, and will need to continue to make substantial investments. We believe 2021 will be the year banking clients really start noticing digital capabilities. It will be the year when the impact of digital is felt everywhere, and banks will need to set their priorities to ensure that their technology investments not only deliver the more obvious business capabilities, but also enable key traits of BX, such as the previously mentioned empathy, responsiveness, focus and efficiency.

It is this combination of efforts that will produce the required business outcomes. By reaping the benefits of the past several years of investment and making digital central to banking culture, 2021 will be the year when the power of digital is truly felt in commercial banking.

For a more in-depth look at our top trends for commercial banking in 2021, please read our full report Commercial banking top trends for 2021.

Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors. Copyright© 2022 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture.