by Joe Mendel –
Poll 100 financial services executives, and you will likely get 100 different answers to the question, “What does digital transformation mean?” Digital transformation can cover a broad scope of things, from small, targeted initiatives for updating a single technology or process, all the way to a fundamental rethink of operations driven by a digital-first mindset.
Whatever your definition, and whatever the goals of your team’s digital transformation efforts in banking, obtaining corner office support for your program is vital. Without it, you’ll have difficulty getting off the ground, much less achieving long-term goals.
To help jump start this process—or even give it a boost—this article explains the role of executive support in your transformation program and the methods your team can use to gain the senior backing you need to succeed.
Why Executive Support Is Vital for Successful Digital Transformation in Banking
Like any organizational initiative, digital transformation needs to have executive support to get off the ground and introduce consistent, sustainable change.
In particular, executive support helps with:
- Identifying and including key stakeholders, ranging from board members and business unit heads to the most junior employees
- Communicating the intent and goals of the initiative, and soliciting support to gain all the perspectives necessary for success
- Supporting communications and change management efforts, such as sending key messages via executive-level mediums
- Making the necessary resources available at the right times
- Ensuring that transformational initiatives are properly sequenced within other strategic projects and aligning them with strategic themes
The 5 Key Elements of Gaining Ongoing Corner Office Support
As you consider how to approach the leadership at your financial services organization with your digital transformation proposal, consider the following strategies.
1. Start with “the why.”
This starting point can be as simple as starting with “the why”—why the transformation efforts are necessary right now and the expected changes and benefits that will be derived.
Different executives have different preferences for approaching business decisions, so consider the following strategies:
- Citing competitors’ or peers’ initiatives and the impact on their business
- Emphasizing the speed of change that is taking place within the financial services industry, including the evolving demands of consumer and commercial markets
- Highlighting the operational benefits, such as the need for speed-to-market and reduced cost-to-serve
2. Be specific about outcomes.
As a concept, digital transformation can have wide support, but the complexity and speed of change in a specific element can make it harder for leaders to get behind. Help senior leaders understand new technology at the center of transformation in addition to understanding its implications for their costs, value drivers, and customer experience.
Whether you introduce new opportunities for partnerships with other fintech companies that accelerate unique product offerings, or you emphasize ways to meet customers’ evolving expectations for self-service and personalized experiences, specificity can make the change more tangible.
3. Communicate the value of building and investing in a culture of digital transformation.
According to one McKinsey study, few companies sustained the financial and operational benefits of their digital transformation. However, financial services organizations that focus on talent development, training, and change management can improve their success. Taking these steps gives teams the skills, context, and support they need to make these new approaches their new normal.
4. Emphasize the proven value of bold stretch goals.
Similar studies also highlight that financial services organizations enjoy the most success when their digital transformation efforts aren’t shy but tend to be bigger, bolder, but calculated risks. This includes experimenting and hunting for new ways to drive real change.
Unfortunately, this approach isn’t the norm.
In other words, many organizations either thought too small or approached their transformation with a piecemeal approach instead of a comprehensive transformation plan.
Every digital transformation portfolio will consist of a range of initiatives, but the fear of going big may hold your organization back from making real, concrete changes that executives can get behind.
5. Put the mechanisms in place to provide visibility and accountability.
Two of the most important visibility and accountability elements are identifying a singular role to lead the transformation effort, and implementing a method to capture key performance indicators (KPIs) that showcase the impact of the transformation
To begin, consider appointing a Chief Digital Officer supported by a business unit with the authority to advocate for transformation and innovation across the financial services enterprise. The leader and group should be able to:
- Cross the channel between the business and IT units within the bank and articulate the business value anticipated from the initiatives.
- Provide executives with the data they need to track the performance of the digital transformation efforts.
- Apply rigor, visibility, and accountability to your transformation program to win the trust and support of senior leaders.
For metrics, select KPIs that allow your team to answer the question, “Is my digital transformation really working?” These KPIs can include:
- Operational efficiency
- Does the initiative effort result in lower costs and improved operational speed and efficiency?
- Are our processes and capabilities sustainable and able to be enhanced over time?
- New sources of value
- Does the initiative create new sources of value and profit?
- Customer engagement
- Does the initiative improve customer satisfaction and engagement?
- Financial growth metrics
- Are our efforts resulting in new services or reduced costs that contribute to a stronger bottom line?
- Operational and functional metrics
- Are our processes and capabilities being enhanced over time?
- Employee engagement indicators
- Are there more people within my organization who understand how to use technology or data more effectively in their day-to-day work?
- Are we making decisions faster as a result of this?
- Are our end customers ultimately benefiting?
- At the end of the day, is my bank better off as a result?
Take Your Digital Transformation to the Next Level
For many financial services leaders, the question isn’t if digital transformation should occur, but how fast and how wide the scope of change should be.
Whatever your organization’s answers to these questions, focusing on the elements we’ve discussed—capturing and reporting metrics, tracking ROI, and fostering a culture of sustainability for change—will not only help get the corner office onboard but also motivate them to become the digital transformation evangelists your organization needs for long-term success.
Want to learn more about digital transformation trends the RCG team is seeing across the banking industry and how they can be applied to your strategic vision? Schedule your own personalized conversation with an RCG expert now!