Firms that lag in digital strategy risk becoming obsolete. Amidst trends that are transforming the financial services world—the explosion of fintech, the entry of Big Tech into the financial services landscape and rising customer expectations—building a digital strategy can help ensure that firms thrive in an increasingly digital future. However, even with a solid digital strategy, the right organizational culture is required to deliver on the potential of digital.
As part of RBC Investor & Treasury Services' Big Ideas Webinar Series, Dan Cobley, startup entrepreneur, fintech expert and former managing director at Google in the United Kingdom and Ireland, shared his perspectives on the digital reinvention of finance and the characteristics of organizations that are going to win. Here are Cobley’s top 10 insights:
1. Learn from the dot-com era
Big Tech is coming to financial services, with companies like Amazon and Google helping to educate consumers about what great digital services experiences can look like. Customers are now bringing those expectations to their financial services providers, resulting in a digital services imperative for this sector and positioning financial services firms for growth.
2. Embed digital strategy into the internal culture
While a digital strategy can be designed outside the organization, it will only succeed if it is embraced by the organizational culture. The first step in fostering the cultural shift required to support transformation is to dig into the organization’s current culture and compare it against what's needed to deliver on an innovation agenda.
3. Adopt strong change drivers
Organizations that support digital transformation have very clear drivers of change.They include alignment, leadership and empowerment.
4. Start with an aligned mission and purpose
In any large-scale transformation, one of the biggest challenges is how to bring people along on the journey. Starting by establishing a clear and aligned organizational mission and purpose allows staff to see the “so-what?" of the changes being proposed, generating excitement and buy-in as projects progress. Companies with customer-focused missions score much more highly for employee engagement, with employees reporting a shared sense of purpose. In contrast, firms focused on non-customer-based metrics, such as driving revenue or maximizing returns to shareholders, report lower employee engagement and challenges in effecting digital transformation.
5. Lead by listening intently to customers
Most great innovation comes from identifying a customer need and executing against it in the organization. This is especially true in digital transformation, as companies can quickly gather customer insights at scale. Here, the story of Amazon is particularly instructive: the company rapidly transformed from an online bookseller to the “everything store" by harvesting insights directly from consumers about what they would value most from an online retailer.
6. Empower staff to explore innovative solutions
Sometimes, the most valuable insights emerge from people putting their own time into addressing customer problems. When staff have the autonomy to explore and solve problems that extend beyond the organization's core business and their explicit to-do list, great things can result. Consider empowering employees with some degree of freedom to innovate around the edges of the core business—to let their energy and creativity loose on the problems they've discovered.
7. Practice agility
In large organizations, people and change often move slowly. But it's possible to build the muscle that will allow organizations to react to events when they happen. While a digital strategy can enable the firm to make changes on the fly, it's important that all teams are moving at the same speed. It’s important to ensure that all parts of the organization are ready to move in lockstep and take advantage of opportunities as they arise.
8. Adopt data-driven decision-making
A digitally-driven organization uses data as a decision-making resource. Organizations that don't rely on data to support decisions can default to making decisions based on the “HIPPO"—“the most highly-paid person's opinion." The problem with this approach is that the HIPPO may be the person most distant from customers and products. It’s important to tame the HIPPO and rely on data to propel decisions.
9. Let customers drive
When mobile phones launched, desktop searches dominated; however, it was clear that customers were increasingly migrating to mobile. As a result, Google strategically decided to move to a mobile-first strategy, meaning that they cannibalized their existing business in order to move in a new direction. Today, Google's mobile search outpaces their competitors, but it took a deliberate focus on customer behaviour to produce this prize.
10. Build “folk stories" about digital wins
For every organization, “folk stories" about digital wins can propel the employee engagement that's required to bring the digital strategy to life. What early victories can be identified and promoted as examples of how the digital strategy will power growth and engagement?