Accenture Banking Blog

Flat economic growth and rising competition are forcing banks in growth markets to step up investment in digital technologies. They’re eager to improve efficiency, enhance the user experience and create new business opportunities.  

But many banks are wary of committing themselves to an extensive digital transformation of their businesses. They view such large-scale change as potentially costly and likely to disrupt their operations and services. As a result, they’re falling behind bolder competitors well advanced on the transformation journey. 

Now, a two-speed approach to digital transformation can help hesitant banks overcome their concerns. 

This strategy can enable institutions to transform their businesses in stages. It helps them to meet cost and performance milestones and reduce disruptions to essential business functions.  

The results can be dramatic. Some of our clients have increased the efficiency of their businesses substantially. They’ve also built closer relations with their customers and launched an array of innovative products and services. Japan’s Fukuoka Financial Group (FFG), for example, built a digital cloud-based bank during its digital transformation. Called Minna Bank, it signed up 400 000 customers in its first year. The bank is on track to reach two million customers by 2024. 

A two-speed approach to digital transformation splits the transformation process in two—the overhaul of the bank’s traditional business and the development of a new, separate, digital banking platform. We call the first part of the transformation the “Supertanker Approach” while the second we’ve named the “Speedboat Approach”. 

The Supertanker Approach 

The Supertanker Approach, which advances like the steady journey of a huge ship, addresses the bank’s core business. It begins with the transfer of paper-based solutions to a digital environment. Then, it uses data analytics and artificial intelligence (AI) to help improve business efficiency. Finally, it rolls out the digital products and services. Key to this transformation is the integration of human expertise with digital front-end and back-end solutions. A “Digital-Human-Digital” philosophy can enable banks to improve efficiency by automating their customer service and operations while enhancing the user experience their staff deliver to customers. One of our clients, for instance, cut the time it takes to open an account to just six minutes while also reducing its back-office workload by 70 percent.  

The Speedboat Approach 

The second aspect of digital transformation moves fast like the swift passage of a speedboat. It requires banks to quickly develop new digital products and services that attract and delight customers. These offerings need less capital than traditional banking products. They’re also far less expensive to support. FFG’s Minna Bank, for example, has an IT budget that’s around a third of the spending of comparable traditional banks. Its headcount is as much as 96 percent smaller.  

By combining Supertanker and Speedboat approaches, banks in growth markets can seize the new revenue opportunities that digital technologies are creating while at the same time carefully overhauling their traditional banking activities. 

Banks that are keen to adopt a two-speed approach to digital transformation don’t have to start from nothing. There are a variety of commercial “building blocks” available for both Supertanker and Speedboat approaches. They range from suites of core banking applications that support digital solutions to platform-independent development testing tools for the rapid roll-out of mobile banking products. 

If you’d like to know more about our two-speed approach to digital transformation, please contact me here. In my next blog post, my colleague Christopher Jaggard and I will discuss the future of commercial banking in global growth markets. 

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