As students across the nation are getting back to school many of us are reminded of the fresh start a new school year brings. During this season of change comes an opportunity to redefine, reshape, set goals and develop habits that will contribute to success in the months to come.
Much like beginning a new school year, many financial institutions are faced with the pressure to realign and adapt to the changing, competitive landscape of today's digital world. In an August 2016 report titled "Disruptions and Disruptors Are Reshaping the Digital Landscape" published by Gartner, the analysts address the topic of the transformation to digital capabilities across industries.
"The single largest change facing enterprises and technology providers alike in 2016 is digital disruption."
Gartner, "Disruptions and Disruptors Are Reshaping the Digital Landscape", August 2016.
Within our space we are seeing the shift to digitization gain momentum, and it is not a fad. The shift in cultural and technological mindset across consumers in the United States is only expanding and growing. So how will your financial institution keep up with consumer's expectations?
With the change in focus to consumer-facing digital accessibility, financial services organizations may be forced to revise the budget to accommodate this need. But are institutions properly revisiting and revising the budget to accommodate a digital world? Statistics have shown that there has not been much increase in allocation of budget to the IT department and digital projects among mid-size financial institutions.
A study published by Ernst & Young in 2015, "Partnering for performance Part 5: the CFO and the chief executive officer" revealed that only 50% of the CFO participants in the study consider the shift to digital to be of high or very high priority for their organizations over the next three years. Budgeting to build/buy digital platforms or make improvements to existing legacy systems that align with consumer's behavior and expectations, for a variety of activities such as online banking and origination, will be key in the virtual race to stay ahead.
Reformation of Departments and Roles
Reorganization across departments within a financial institution will be necessary as digital presence grows with marketing, regulations and consumer centricity increasing in importance. We have seen this change already occurring in many financial institutions. Historically, an IT department's core focus was on daily functions, reported issues and developing analytics while today they are being remolded into an important cornerstone of the organizations goals, growth and success. Once viewed as having a "keep the lights on" role, the IT department is being pushed to work side-by-side with the business unit more than ever. We can see that IT’s responsibility to understand business needs, strategies and contribute to the consumer's digital experience is growing as the industry is evolving.
Butch Leonardson, Director or I.T. Leadership at Cornerstone Advisors and Sam Kilmer, Senior Director, participated in a webinar titled "The 4 Pillars of a High Performing Organization" run by CUES. With over 30 years of experience in the technology sector between both Butch and Sam, they shared their insight into the changing role of the IT department. One key takeaway that I found defining about this adapting role was that the key to success organizationally was to understand that the strategic plans of an organization run on the rails of IT.
Trust to Accelerate Utilization
Is gaining consumer’s trust key to advancing your mobile and online strategy and presence? Many advisors believe that this is a fundamental piece to being successfully competitive in today's marketplace.
According to the Edelman Trust Barometer, although the financial services sector has lagged behind in previous years it is making a rebound. Consumer trust has jumped from 43% in 2012 to 51% this year. However, as you can see in the image below, amongst other industries there is still room for improvement.
Ensuring consumer's personal data is protected can enhance trust at your institution and accelerate the utilization of invested tools.
With the digital age shaping, many financial institutions are forced to look at this new era much like entering into a new school year. Technology is radically disrupting the financial services sector. How will you redefine, reshape, set goals and develop habits that will contribute to your success?