Digital disruption has opened up the competitive playing field in banking. Fintech start-ups are influencing customer expectations and affecting specialized revenue streams. Other players include large digital leaders who are extending banking services into non-banking digital ecosystems where they are already dominant.
So what should your Everyday Bank do to respond to this market disruption and rising competitive pressure? We believe it’s critical to execute at two speeds to sustain market momentum while also strengthening the core underpinning of your bank. Let’s explore these two speeds:
Speed 1. Disruptive growth options outside the core
Moving at disruptive speed means moving just as fast, if not faster, than your competitors are adapting. But, with this approach comes uncertainty, and it demands banks to take on the bold, entrepreneurial characteristics required to develop new capabilities.
Key to moving at speed is seizing new opportunities to grow beyond your core business. This might include:
- Becoming a digital attacker that targets specific market segments.
- Sharing the digital wallet through app commerce and digital ecosystems built on value-added services.
- Penetrating vertical platforms by providing integrated financial or nonfinancial solutions to serve life needs.
- Using the crowd for everything from community-based scoring or lending to enabling payments.
- Monetizing data.
Speed 2. Transformation of the core
While pursuing disruptive growth, the Everyday Bank must transform its core by addressing fundamental elements that include:
- Digital customer strategies – By establishing a true omnichannel customer experience, you can give your customer choices for how to engage with your bank anytime via any device, depending on their needs and expectations.
- Digital enterprise strategies – To fully evolve end to end digitally, build a capability architecture, digitize processes and encourage digital collaboration.
- Digital operational strategies – Flexible technology platforms and open architecture will allow your bank to evolve business models through new digital ecosystems.
Core transformation also calls for making shifts across resources, people, technology and operating models; proactively shaping and participating in new ecosystems; and addressing customer, shareholder and regulatory outcomes. These are not simple tasks, but they are essential to digital transformation.
Executing at these two speeds will allow your Everyday Bank to be digital, protect your territory and appeal to customers by delivering integrated services. Read more in Digital strategy execution drives a new era of banking.