When we think about digital transformation, we automatically think about those companies that have famously disrupted industries. Uber killed taxis, Netflix pushed the movie business in an entirely new direction, and Airbnb completely disrupted the hotel industry. Google, Facebook, Amazon.com, and other tech giants have also wholly transformed consumer experiences.
While these are great examples of companies that have transformed industries, for the investment world, a sector that has clearly defined conventions relating to trust, stability and confidence, it requires a technology alignment that brings with it transparency, freedom and innovation. Ant Financial Services Group is a great example of a brand that has captured the most attractive features of the online world – and still plays to the strength of the financial services industry’s core value propositions.
Ant Financial has achieved far more in 15 years than Bank of America did in 95 years. Ant has 700m active customers compared with Bank of America’s 70m and raised more cash in 2018 than Goldman Sachs – Ant raised $150bn and Goldman Sachs $88bn.
To achieve anything like these digital transformation ambitions, financial services companies need to establish where they’re going – clearly understand the purpose and goals and the measurable outcomes they aim to achieve through digital transformation.
As a starting point, we need to ask the question: what is our biggest motivation for embarking on a strategy of digital transformation? The answer has to be our clients. If a business pursues and adopts new technology merely for the organisation’s benefit, it will only digitally optimise the business, instead of transforming it.
Digitally optimising a business enables you to grab the lowest- hanging fruit on the technological tree. That may allow you to keep up with your competition, but it will not be sufficient to advance past them.
By focussing on clients in your digital transformation strategy and implementing new solutions that brings the business closer to your clients, you can serve them better, faster and more intuitively – and that’s what digital transformation is about.
Create a digital journey for your client
Understanding the client journey and where technology fits requires a deep dive into your client’s journey and then, mapping their key touchpoints. Financial firms need to create digitally-driven strategies that improve client engagements at all touchpoints along the way. The aim of a digitally-driven strategy could be to further diversify your product range by simplifying product access or offering a more streamlined investor onboarding process.
Typically, the journey starts with where we can reach our clients and creating awareness about our business and what it offers. That is the role of marketing. Then we need to share more about our offering by using our website and digital communication to guide them to the best solution, as well as deliver an effective post-sale follow-up.
The financial services industry in South Africa has experienced significant technological progress in the past two decades, underpinned by the active take up and engagement with mobile devices. Technology advancements are moving in similar digital directions; offering online services, online application forms and apps on clients’ mobile devices for quick access to information and transactional services.
Distinctly different digital personas require different approaches over time, we have seen clients transition into two broad digital personas: digital natives and digital immigrants. Digital natives enter the market with a preference for digitised alternatives to physical banking, investments and advisory services. Digital immigrants, our traditional market, are still more comfortable with conventional forms of engagement with financial services companies and need to be encouraged to shift their behaviour.
It’s important to acknowledge these differences because the nature of our industry and what we offer our clients is premised on building partnerships and long-term relationships. So our challenge is to deploy technology that complements our client relationships in a meaningful way and not detract from them.
Analytics converted to insight One of the many benefits of deploying digital solutions is the ability to track clients’ interactions with, and navigation through, the digital services we offer. While this can be a complex exercise, once started, implementing tracking into your digital ecosystem provides valuable client insights. It can open up a world of possibilities in the level of personalisation you can introduce into the way you communicate with them. It can enable targeted marketing efforts, support social media activity, provide a deeper understanding of your clients’ digital footprints, and it can significantly improve your client service offering.
Digital will continue to lead the charge
From self-driving vehicles to applications like facial recognition, digital innovation is set to continue at a rapid pace during the coming years. Businesses that do not want to be left behind need to acknowledge that a digital strategy, and the technology that supports it, is not a once-off exercise, but requires continuous investment, prioritisation and progression.
For our industry, it means thinking far beyond the immediately apparent digital aspects of a business-client relationship and, instead, finding new ways to interact, service and reach them. The digital way forward will be about allowing clients to experience our brand and solutions without leaving the comfort of their homes. The plethora of virtual platforms has already facilitated face-to-face interactions without having to visit a brick and mortar location.
Given the pace of change and progress in the technological sphere, a digital strategy crucially needs to embrace adaptive design and accommodate agile execution in which the business can test an idea to see whether it fits and satisfies client needs. If not, it’s preferable to fail fast, learn quickly and move onto the next digital innovation.
Companies in our industry who want to take the lead shouldn’t be looking at what competitors are doing and trying to outpace them. Disruption of our industry is likely to come from Silicon Valley and, if we want to anticipate and prepare for it, we need to be looking there for our next discovery and direction.