Other parts of this series:
- Agility is the strategic imperative for financial services firms
- Financial services needs to speed up efforts in the agility race
- To win in agility, financial services firms need to strengthen stability
- How to rewire financial services for true agility
- How to rewire leadership, governance and funding for true agility
- How to rewire culture, workforce and organisation for true agility
- How to rewire channels, operations and technology for true agility
- Agile in financial services: No silver bullet, no panacea
- Navigating the agility journey in financial services
- Reflections on an agile future in financial services
In today’s increasingly digital world, banks and insurers are battling to reinforce their relevance in their customers’ lives. Channels, operations and technology are all critical to finding and maintaining true enterprise agility for financial services (FS) firms.
In my previous blogs in this series, I’ve explored how enterprise agility is all about be fast and stable, as well as exploring some of the cultural and organisational aspects of agility. However, to respond rapidly to opportunity and disruption banks and insurers need to have core value chains–channels, services, operations and technology–that can flex quickly and at low/zero cost.
When it comes to new digital channels in which FS firms engage with customers and partners, and provide services, the expectations are not influenced solely by competition and slick new entrants to the market, but also companies in different industries, such as Amazon, Airbnb and Uber that are redefining customer service in general.
There is a battle going on for banks and insurers to reinforce their relevance in their customers’ lives. Those who will win the hearts and minds of their customers will not necessarily be the ones with the slickest platforms and technologies, but the ones that surprise and delight the customers with their improved service experience.
FS firms looking to develop enterprise agility through the new channels will have to utilise a human-centred design to emphasise the customer experience and journey. They will need the participation and feedback of customers throughout the project lifecycle. A key part of agility is being able to respond quickly to shifts in the market and clients’ varied and changing needs and behaviours.
This goes beyond just digital channels and expands into how digital can be integrated with branch, relationship-management and brokers contexts. In many banks and insurance companies, this will require pulling operations teams closer into the front office and toward the customer.
The complexity of legacy technology and data is seen as a major constraint by many banks and insurers. These firms need to develop faster digital architectures for speed and responsiveness to customer demands, while managing the legacy platforms and progressively simplifying things over time. These new digital platforms need to be easy to adapt, integrate and scale, while coexisting with complex legacy platforms that are slower to change.
The real goal is to bring together data, intelligent automation and humans. Truly agile organisations are intelligent and understand the data they have and how to use it for value. Applied intelligence will pave the way for new ways of decision-making and actions across the organisation. Artificial intelligence (AI) and machine learning can help FS firms to improve a product with more responsive pricing, services and experiences, which in turn improves the data on customer response, which allows AI to learn and improve what it does next. These ideas are commonplace in other sectors (e.g. Amazon, Netflix). However, maybe a bit more akin to the defence or medical sectors, there is still an important place for human relationships in financial services. Finding ways to use analytical insight and AI to support branch, relationship-managers, investment advisors, product specialists, brokers and other key roles will be a key part of building relevant customer engagement and relationships.
None of these changes will happen overnight. The road to enterprise agility is one of marginal gains through using an iterative approach. A great example of this is the story of Sir Dave Brailsford, who brought the British Cycling team out of a century of mediocrity in five years. He referred to his coaching strategy as “the aggregation of marginal gains,” where he and his team and focused on finding 1 per cent improvements in overlooked and unexpected areas. “The whole principle came from the idea that if you broke down everything you could think of that goes into riding a bike, and then improve it by 1 per cent, you will get a significant increase when you put them all together,” Brailsford said. Banks and insurers would also benefit from this philosophy.
The roadmap to true enterprise agility has many key elements. I will cover the next and final crucial element, rewiring change, in my next blog.
To learn more, register to download: Enterprise Agility in Financial Services: The New Strategic Imperative and listen and subscribe to our podcast, Talking Agility.