OPINION: How financial services can embrace the new wave of digital transformation

Richard Robinson, Managing Director, Econsultancy

In an era of radical technological change, there is clear opportunity for financial services firms to embrace the new wave of the digital revolution. While most (83%) senior executives in the UK say their organisation’s growth depends on rapidly evolving their employees’ capabilities to meet emerging customer and business needs, only 27% say that their business has the digital skills to accomplish their goals, according to Econsultancy’s 2023 Digital Skills survey.

For many, adapting to this new reality means rewiring the organisation’s DNA. However, due to the ever-increasing number of choices to improve efficiency and customer experience, many business leaders are left feeling challenged with how best to shape and invest in digital change.

Great lessons have been learned from early digital transformation projects, and as a result technology adoption is growing exponentially. Financial services businesses now have opportunity to rethink their product and process to move in lock-step with digital-first customers and stakeholders and move one step ahead of their competitors.

Tackling The Blockers to Next-Gen Digital Transformation

While most financial services businesses are aware of the imperative for action, many come up against numerous repetitive challenges. As these seemingly familiar roadblocks take shape, the application of best practice becomes key to optimising strategies and delivering action.

For example, long gone are the days of customers limited by the 38-hour week economy. Today, both B2B and B2C financial services professionals must analyse, plan, and interact with customers in a never-off environment of commerce and communication. This is why we recommend strengthening digital, marketing, eCommerce and technology to align business strategy and operations with customers.

In addition, we see increasing pressure being placed on legacy institutions from digital-first challengers, who are gaining advantage through digitally efficient models. In fact, according to Econsultancy’s 2023 Digital Skills survey, almost two thirds (63%) of organisations say their customers want to replace offline experiences with digital ones, meaning businesses with first-in-market technologies will attain a competitive edge.

These changes reinforce the importance of prepping the business, including upskilling the knowledge, skills and mindset of the people within it. Employees familiar with best practices and the necessary tech behind them, will have the competencies needed to support customers throughout this transformative phase.

Additionally, highly regulated industries need to innovate to stay competitive. In a field where all players follow the same rules, insights and ideas need to stand out. It’s a great opportunity for marketing teams to think outside the box when putting forward new strategies and campaigns. Leveraging state-of-the-art technology, for example, will help professionals follow the rules of engagement by the letter and in spirit, while inspiring greater critical and creative thinking.

Unlocking the Financial Services Industry’s Digital Potential

Here are my five key steps to accelerating the next phase of your organisation’s digital transformation roadmap:

Identify the right solutions: Analyse existing processes and legacy systems across departments, pinpoint immediate issues and prioritise solutions that will address overall performance across the business. Be clear how these connect to your overarching business objectives and bigger picture, long-term investments.

Cultivate employee motivation and stakeholder buy-in: Engage senior leaders, board members and investors on the importance of investing in the human component of the business’ digital transformation roadmap. Create a clear roadmap to improve the knowledge, skills, and mindset to use digital, technology and AI to help, not hinder, existing skillsets.

Invest in your team: Enhance the competence and confidence of your people through digital upskilling. Econsultancy’s digital skills research found that almost eight in ten (79%) senior executives believe education and training are essential to their company’s digital transformation, with training considered to be the fastest (70%) and most cost-effective (61%) way to boost general digital skills, compared to hiring or outsourcing. This reinforces my belief that effective digital transformation is always first and foremost about people.

Measure upskilling impact: Set KPIs to assess cost efficiency, customer growth and increases in revenue – in addition to productivity, confidence and sentiment. Training programmes are only as good as the results they deliver.

Stay up to date with the tech and the economic landscape: Your long-term digital transformation strategy must include regular training that harnesses the industry’s rapid evolution. In fact, over half (55%) of respondents in 2023 surveyed in our Digital Skills study said they need to add new skills and knowledge every month; a notable increase from 2019, where just a third (33%) said digital skills required updating every quarter.

While some tech trends come and go, none should sway you away from your overarching digital transformation journey. It’s essential to remember that crafting the most powerful strategy is the responsibility of marketers and business leaders, not the technology itself. To fully realise these new opportunities, embrace your most important asset: your people. Invest in them first, and they’ll invest back in twofold.