As discussed during the interview, could you detail the kind of challenges or business hindrances faced by organizations pursuing digital transformation in the banking sector?
Broadly speaking, the biggest hindrance to digital transformation is the organization itself. More specifically, there are two elements. Firstly, internal constraints that prevent transformation efforts to get off the ground. Past successes often create complacency and inflexible culture, hindering experimentation and innovation. Organizational communication and rigid decision-making also play a part in fortifying execution of the same formulas for success to maintain the status quo.
Secondly, once transformation efforts are off the ground, counterproductive approaches or strategies are often employed in an effort to establish the change imperative and to instil a sense of urgency. How many times have we all heard - ‘disrupt or be disrupted’ or ‘people need banking, but not banks’. The messaging is uninspiring and playing too much on fear of inaction. Over-hyping digital transformation as the only path to the Promised Land can have unintended consequences. Mantras like ‘fail fast, learn faster’ in execution becomes ‘fail fast, fail often’. The push to instill experimental mindset instead leads to trial and error, instead of well-conceptualized, disciplined experimentation. The organization is doomed to fall short of expectations.
Based on your experience, could you give us an example of how technological tools can catalyze objective-driven business processes, rather than serving as the focal point of engagement?
Problem loan management model is being transformed to increase capacity to handle greater volume coming from SME loans, to support early detection, and to triage higher risk loans for immediate processing. The goal is to lower NPLs and of course, recover. With clear objectives in mind, processes and policies are being redesigned, and technology will be employed in different parts of the value chain - Analytics / AI for early detection and loan triage; workflow automation for loan processing and decision-making.
Digital transformation is a race without a finish line
On the retail front, new branch experience is being reimagined to provide more retail-like customer experience, more personalized and surprising, effortless “one and done” with no forms or paper, and simple and efficient servicing. The scope of this transformation required redesigning the physical branch, creating new roles and communicating the purpose of the future branch, retraining staff on new CX concept, and of course leveraging new technology (i.e., biometric e-Signature for a paperless teller, account onboarding app with face recognition, next-gen bankers app on a tablet to facilitate digital migration and to up-sell products using data analytics to identify next best action for staff.)
What would be a single piece of advice that you could share with your industry peers on efficiently orchestrating digital transformations?
Digital transformation is a race without a finish line. Although more attention is given to technology, the forgotten ingredient over the long haul is often people. Digital transformation, actually transformation of any types, will not succeed without broad people involvement.
Digital transformation requires cross-company involvement and organizational change. Individuals and teams need to be onboard and motivated to move in the same direction. Getting started begins from the top. Leaders must recognize the need for empathy in communication and empathy in execution.
Empathy in communication is really about ‘how’ leaders communicate, as opposed to ‘what’ is communicated. Leaders must put themselves in the audience’s shoes, must gauge sentiment at every stage of transformation. Leaders must build credibility and trust with honest, open communication. The focus needs to be on the people, not just financial goals and timelines.
Empathy in execution is my interpretation of leadership awareness and understanding of the team’s obstacles and struggles. Awareness necessitates being, on occasions, in the battle trenches with people who are driving the transformation efforts. Guidance from leaders needs to be grounded in reality and practical in execution. Borrowing from a key principle of Toyota Production System, “GenchiGenbutsu” or “go and see”, getting a reading on the situation should come from own observation, not from reading reports or spreadsheets from the ivory tower.