“A ship in harbor is safe — but that is not what ships are built for.” — John A. Shedd
In today’s world, this can be taken even further. Banks are dead the moment they want to play it safe. The need to innovate is ultimate in the digital world where customer needs and requirements are highly contextual. The traditional banking products have become commoditized and all financial service providers have them in their portfolio. The only way to differentiate yourself and stay ahead of the curve is by innovating constantly – both from a product and a service perspective
Agility has become a much overused term these days – however, clichés are so for a reason. Agility in general and competitive agility in particular is essential for banks to survive. But how can a bank remain agile with legacy systems worth decades while the smaller, newer fintech firms have flexible technology to bring any change necessary within days.
Before getting into the ‘how’, let’s discuss the ‘why’ for a bit. Most corporate banks are of the opinion that since their customers are corporations, they are equally burdened with legacy systems and therefore cannot react as much as a retail customer. However, recent researches have broken this myth. Depending on the industry, organizations are agile to different degrees but all of them are looking at process, product or service innovation in some form.
Especially in a digital banking context, most organizations expect their banks to be agile enough to handle digital products which are highly context specific. Process agility has a big role to play in such an environment. In addition to this, most banks are currently trying to become customer owners where all other services become part of the ecosystem. In this scenario, the banks handle the overall experience for the customers – therefore agility becomes an essential requirement.
So how does a bank become agile? Here is how this works. While gaining insights into the customers’ experience is important, the driver of an agile and fast paced set up requires a perfectly well-oiled system to assimilate the insights into the workings of the organization. This is especially true in today’s connected environment, where multiple teams deliver multiple services with a diverse customer base. It therefore becomes important that the insights gained through customer surveys, market trends, social media feedback, user reviews, quickly find their way into the functional cycle of the organization’s services.
With the legacy systems currently in place, the only way for banks to move forward without complete overhaul of their systems is to implement a middle orchestration layer which can ‘talk’ to both downstream and upstream systems thereby obtaining the data from the siloed systems, translating them into insights and finally determining and managing the experience through the customer facing systems.
Competitive agility is something which corporate banks cannot live without anymore. So whether they want to do it is a moot point. They rather need to make a decision on ‘how’ to implement such an organization. The time to act is now.