DIGITAL BUSINESS

The three stages of digital transformation

According to a survey by The Economist, banks have for the first time promoted the implementation of a digital strategy to the highest priority on their agenda. However, Avaloq’s own research found 74 per cent of financial professionals admit they have not yet defined a digital strategy or are only at the very early stages of doing so. As client expectations and new rival players in the industry continue piling the pressure on financial advisors and wealth managers, we have identified three stages of digital transformation to combat this.

November 12, 2015

According to a survey by The Economist, banks have for the first time promoted the implementation of a digital strategy to the highest priority on their agenda. However, Avaloq’s own research found 74 per cent of financial professionals admit they have not yet defined a digital strategy or are only at the very early stages of doing so. As client expectations and new rival players in the industry continue piling the pressure on financial advisors and wealth managers, we have identified three stages of digital transformation to combat this.

Par Sébastien Lambotte pour l’édition ITnation Mag Octobre 2015

1 • Enabling digital channels

The first stage of the digital transformation journey is to enable multiple digital channels to sell products and serve clients. However, consumers often suffer from a limited level of self-service on digital channels where too often only simple transactions are possible online. It is also not always possible to execute more complex requests online such as on-boarding a new client or getting financial advice.

As a result, many clients become frustrated as they cannot understand why what has become a standard in other service industries, is not possible in the financial field.

However, the most concerning limitation is that client-facing employees have no transparency over their clients’ digital activities. If a client has unsuccessfully used mobile or web banking to execute a payment or initiate a trading order, the client will have to give a full explanation to get the help needed when meeting with an adviser or relationship manager.

2 • Digitising all processes

The second stage of digital transformation is digitising processes to increase efficiency and provide an omni-channel experience, ensuring consistency and continuity of service across any channel. This means client advisers and branch employees perform daily tasks on a fully integrated digital platform.

Unlike stage one, digital channels are now used as a communication and collaboration tool between the client and the adviser, to increase the level of service offered on digital channels and build a closer relationship between the financial services provider and their clients.

Digitising all processes also means fully automating the full financial services value chain, in particular to maximise straight-through-processing transactions and digitise all client-facing processes such as client on-boarding or investment advisory. Reaching this second stage of digital transformation will therefore en- able significant gains in efficiency while also reducing costs. Yet this still might not be sufficient to survive a digital disruption.

3 • Transforming into a digital business

The third stage in the digital transformation journey is to turn the financial adviser or wealth manager into a digital business. This requires a change of the business model by leveraging the full potential of technology to reshape products and services. Ultimately, it means technology is used fully throughout the financial services value chain and to design, build and sell all products and services offered.

The world is experiencing a digital revolution and all industries are faced with significant change as a result. The time has come for the financial industry to embrace change, or risk alienating itself from its clients.

En photo : Frédéric Kemp, Managing Director BENELUX & Thibaut Jacquet-Lagreze, Head of Marketing and Sales HQ.

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