Seven essentials to digital transformation in banking

09 March 2021 3 min. read

Digitalisation is top of the agenda for banks across the world, although implementing a successful transformation is notorious for its challenges. Cedar Management Consulting’s Vincenzo Casillo lays out seven factors for banks to consider on their digital journey.

Vincenzo Casillo is a principal consultant at Cedar’s Dubai office and an expert in banking and digital transformation – built on a banking background and years of experience at Big Four accounting and advisory firms Deloitte and PwC. For him, the complex road to successful digitalisation in banking can be smoothened by paying attention to best practices.

Simplification of technology and data infrastructure

For many banks, the traditional approach to digital transformation has been a heavy investment in technology to meet new business and regulatory challenges. A successful transformation requires a simplification of these myriad applications to ensure a seamless back-end operation.

Vincenzo Casillo, Cedar

End-to-end digitalisation of customer journeys

By this point, most banks have invested in the necessary technology, which makes them relatively uniform in their practices. The only remaining differentiating factor is the quality of customer experience, which is “notoriously tedious and cumbersome in banking,” according to Casillo. “The use of technology is key to overturning such a paradigm and ultimately providing effective customer experience.”

Leverage big data analytics

“Data and analytics can make banking easier and more personalised for customers and more profitable for banks.”  Banks have large customer bases, and using analytics to make sense of vast customer data pools can help guide better marketing investments. Artificial intelligence tools can help generate these insights along clear levers without using manpower.

Developing partnerships

In most cases, banks lack the internal capacity to deliver all facets of a transformation. All things considered, banks need a partnership strategy that can help rope in expert collaborators when internal capabilities are found lacking.

Adopting new ways of working

“If we observe the ways of working of banks, its easy to realise how most of them have not fundamentally changed their approach to work in decades.” While a handful have done well to implement agile and flexible working methodologies, Casillo believes that the pandemic-induced transition to remote working will be a turning point in the banking sector – turbocharging the shift to new ways of working.

Assuring cyber security resilience

“If you think about it, all of the good things that banks are trying to do with the help of technology – be it step changes in convenience, turning customers into advocates, and operating more efficiently – can all be undone by security breaches.” In the current economy, cyber security is not only a must-have for success, but also for survival.

Attracting and retaining digital talent 

The digital skill gap is an economy-wide reality, although Casillo positions the banking sector as one of the hardest hit by this shortage. “Even the largest banks with the most ample resources have struggled to recruit and retain talent. The culture at incumbents is often highly bureaucratic and risk-averse, making it difficult for new ideas to flourish, and challenging for an organisation to attract young talent.”

“All these challenges, combined with enormous investment needed to update systems and processes in line with new regulatory requirements give an idea of how large the barrier that banks face is when it comes to keeping pace with the rapid advancement of technology.”