There’s no doubt that embracing innovative technologies will be key to success in the financial services sector. And the greatest enabler of this is cultural change. Here are the mindsets finserv leaders can cultivate to propel them and their teams forward.
The needs and expectations of customers, shareholders and employees have dramatically changed. And while we’re seeing some – for the most part challenger and neo banks – already rising to meet and exceed those expectations, others are lagging.
To the customer, this looks like different styles of engagement. Internally, it’s likely down to access to data – do you have the behavioural data that tells you when someone is thinking of buying a home? Or, it’s access to the systems that help you take action on that data – can you talk to that person when they’re thinking of buying a home, on the platform they want to talk? Can you do all of this at scale?
Changing this is, in many cases, a question of leadership’s mindset.
We’ve talked about mindsets before – mapping their transformational power and the ability of organisational mindset to unleash innovation on a grand scale. Here we look at the two key mindsets business leaders tend to cultivate, a third mindset that’s the missing middle step and worth developing, and finally we discuss four disciplines that will make that ‘missing middle’ a reality.
Many leaders feel they have been through a digital revolution already. Indeed, digital transformation fatigue is not uncommon in this time of seemingly endless disruption. They believe they can simply optimise their existing business – using these new technologies to drive productivity and efficiency – and then everything will be 'back to normal'.
We call this the ‘renovate’ mindset. Yes, it can lead to some efficiency wins. But they will generally be isolated and inconsistent – it’s a defensive strategy, and not a particularly thorough one. Unless the resulting cost savings are reinvested in more ambitious transformation initiatives, the renovate mindset will not in itself cause scaleable success.
At the other end of the spectrum start-up entrepreneurs and disruptors ambitiously embrace every 4IR technological advance at their disposal. With their eyes firmly on the customer, they’ve moved beyond traditional definitions of competitors and markets, and are focusing on what the new digital ecosystem has to offer.
We call this the ‘transcend’ mindset.
For leaders at long-established financial services companies, leaping straight from renovate to transcend isn’t an easy option. If they’re going to deliver customer-centric innovations, they first need to transform the cultures, capabilities and business processes that have become muscle memory over decades – and the technology stack that underlies it all.
Evolution is needed to meet that challenge.
The ‘evolve’ mindset is demonstrated by companies that have been previously stuck in the ‘renovate’ mindset but are committed to moving forward. The CEO and executive team put the customer at the centre of the business, which complements ‘transcend’-style initiatives.
Because transformation doesn’t happen overnight, some aspects of a business are likely to keep operating in a ‘renovate’ fashion during this process – driving efficiency and creating savings that can be put towards transcendent projects.
Traditional financial service businesses have focused on creating new products and distributing them to customers. Standardisation was the name of the game and success was all about transactional volume.
Today, companies must reconfigure their core processes to focus on customer demand rather than supply, and on meeting that customer demand with personalised, connected service. In an industry where micro-segmentation is uncovering more personas than ever before, standard doesn’t cut it anymore.
Customers won’t put up with being passed around from department to department. They want to interact with one company. Salesforce research shows 78% of customers expect consistent interactions across departments but 59% say it feels like they are working with separate departments, not one company. Seventy-two per cent of customers expect all company reps to have the same information about them but 66% report often having to repeat or re-explain information to different representatives.
So this discipline is all about breaking down silos and enabling teams to deliver the full power of your company to the customer. Organisations must do away with the traditional organisational divisions and integrate departments across more flexible structures.
A bank that takes action on the first three disciplines will be on its way to the customer focus it needs to succeed.
But there’s one more piece of the puzzle. We all know that customer demands have escalated. Their behaviours have also changed, and are not likely to snap back.
Any assumption that we’ll return to 2019’s behaviours is likely to result in you falling behind. So that 2019 data - it’s not telling you much now.
Finservs must constantly extract real-time customer insights and respond to them at speed – from the C-suite to the service agents.
Join Brett King in conversation with local and international financial services leaders for Salesforce Live for Financial Services on 22 July.