Other parts of this series:
In the past, financial services enterprises have excelled in leveraging change as an opportunity for growth. Now, in the face of multiple pressures from market forces, regulation, digitization, and ever-evolving customer demands, it is time for leaders financial services to start viewing change as a core competence for survival and success.
Financial services leaders know they must transform or fail. A recent Accenture survey revealed that 84 percent believe “we must reinvent ourselves or be disrupted from the outside.”
Digital is disrupting every part of business: The proliferation of big data & analytics, fintech, cloud, social media, mobile, the Internet of Things, artificial intelligence, and robotic automation impacts banks and insurers alike. By 2020, 25 percent of the world economy will be purely digital.
In the meanwhile, new digitally savvy competitors are entering the marketplace and challenging the established incumbents. For example, nearly half (40 percent) of 18-34-year-olds say they would switch to Google if it launched a bank. A whopping 59 percent of insurers expect competition from online service providers such as Amazon.
This rapid and massive digital transformation is also resulting in an increase in customer expectations. They now desire and demand the best of both worlds: Nine out of 10 customers expect their banks to know them and more than half (52 percent) want insurers to improve online access.
Dealing with all these new pressures will not be an easy task for financial services firms, especially considering the strict regulations and compliance obligations that eat away nearly 60 percent of their change budgets.
Financial services leaders know transformation must be more comprehensive. In order to manage rapid, complex change, here are the agile methods to consider:
- Shift leadership and culture. Business leadership is the most essential driver of business performance during transformation. Creating a coherent vision and direction has greater impact on benefits realization than any other factor.
- Change how they work. Building new capabilities and ways of working is essential to surviving in a digital age. Financial services firms need to reinforce their change teams with the support they need.
- Adapt how they serve customers. In order to strike the perfect balance between immediate digital access and the personal touch customers demand, leaders in financial services will have to strengthen change governance, methods, and tools.
- Move business into the future. Making change a professional career and a competitive advantage will enable financial services firms to compete against the new entrants to the market.
This evolution involves developing organization-wide agility, and leveraging professional change capabilities, both developed internally and sourced externally from key partners.
Transformation is key to short-term survival and long-term success of financial services enterprises. Those who reinvent themselves comprehensively will be the ones to live to tell about it.
To learn more, watch the video: Transforming Financial Services