In a previous post, I shared how the financial sector needs to pick up the pace of innovation, specifically around digitizing customer engagement. And while I shared the importance of getting these interactions right, it’s also important to stress the importance of acting fast. Disruptive forces can take many forms.
Consider Capital One’s Acquisition of Level Money. Forced to compete with a new breed of tech-savvy, application-centric startups, Capital One needed to reinvent itself as a software business. Because in today’s highly connected, digital environment, every business is now in the software business. But not every business can acquire their digital competitors. In most instances, it’s up to you to reinvent your business to meet digital customer expectations.
Unfortunately, great ideas for new digital solutions often fail to progress because of internal barriers. And in the financial services sector, where competition is fierce and regulation is plentiful, your business does not have the luxury to miss out on the next big thing.
Related post: Like It or Not, You’re Running a Software Company
Across the board, we’ve seen that the demand coming from multiple commercial groups far exceeds your IT team’s ability to keep pace. There are two critical components associated with this problem that you need to understand:
- Your IT teams are bogged down: they’re focused on core systems maintenance projects that monopolize their time and leave little room for innovation initiatives. Today, 82% of companies report a growing backlog of innovation projects.
- Your business groups can’t decide: firms allow extended debates about project prioritization and requirements. But lack of alignment and unclear requirements translate into project failure. Currently, over 64% of projects fail to meet business expectations.
It’s time to make a change. You need a more effective process for working with IT to deliver new digital experiences. Historically, financial institutions have looked to their own development teams to build custom solutions in traditional development environments or have bought and customized packaged applications to fit specific business functions. Both approaches are costly and can take years to implement, if they progress at all. And during this waiting period, much could change.
For example, you could fail to capture market opportunities, see a decline in customer satisfaction, and witness a deterioration in operational processes. The Financial Brand says it best: Building a Digital Bank is a Matter of Survival.
You Need to Prioritize
With your business’ success on the line, it’s important to consider where digital engagement can provide the greatest return for your investment. Select new initiatives based on value added to the business, but don’t get caught up in too much red tape (per the extended debates mentioned above).
To help get ideas flowing, take a lesson from your peers who are already seeing results. There are three areas, in particular, where financial institutions have already seen a need for better online engagement. These include new products and services, customer engagement applications, and business process applications. Take a look at how our customers are adding value through new digital solutions that tie into these categories.
Related eBook: Your Guide to Compete & Win Against Larger Financial Groups
You Need to Rethink Your Approach
Once you have a project in mind, you still need to make it a reality. Embrace a new strategy that reduces time to market for digitization efforts and enables greater iteration, testing and collaboration throughout the process. Gartner, Inc. calls for a ‘bimodal’ approach, where business and IT teams utilize a ‘fast lane’ that speeds delivery for urgent projects (such as those that differentiate your business) without affecting the results of maintenance and other efforts.
A bimodal strategy offers a unique set of staff, processes and tools based on the type of project. This is essential as the resources needed to build digital applications are very different from the resources required to manage core business systems. These digital apps require smaller, business focused teams that can work quickly, deploy regularly and iterate frequently. For your more IT-minded colleagues, point them to this article for the tips and tools on how they can get started.
These ‘rapid apps’ require rapid tools to enable rapid delivery. Therefore, it’s not surprising to see Gartner recommending a new, rapid application development model for such systems. The time for change has come. And it’s up to you to guide your teams to success.
To compete and win against larger financial institutions with unlimited budgets, you need to be smarter and faster. Download this guidebook to find out how you can accelerate your digital transformation and get results fast. Remember, speed is of the essence.