Digital Transformation Isn’t “Either/Or”. In Reality, It’s “And”.


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In the push for greater and greater technology in customer experience, it’s easy to get sidetracked by the hype that digital transformation has to be an “either/or,” full-on and dive-in absolute for organizations rather than an “and” additive evolution. The notion of “either/or” is an especially debilitating, red-herring presumption for marketers trying to “modernize” their organization’s customer experience through digital transformation.

If that sounds eerily familiar, it’s because the promo and hype surrounding today’s all-hailed Digital Transformation for CX is so much like the hullabaloo surrounding Big Data, CRM, and Reengineering in the 1990s and early 2000s.

That said, in industries where digital represents a potentially seismic shift in how value delivery is provided to customers — and how digital and traditional processes integrate to deliver that value — it’s absolutely critical to understand how best to assimilate, and leverage, this change.

Let’s take a closer look at retail banking as an example of the importance of taking an “and” rather than “either/or” approach when it comes to digital transformation.

Investing In Change

Digital innovation in retail banking is evident in the transformative way people transact (e.g., increasingly via mobile) and organize their finances (e.g., increasingly using online tools). Banking is rapidly becoming an “anytime, anywhere” omni-channel experience, as tech-enabled and tech-savvy customers drive the need for more and more flexibility, agility, and innovation — and, as agile fintech startups launch specifically to provide those experiences.

Consumers want seamless, convenient banking experiences, regardless of which channels they use or when they use them. Most retail banking customers expect all of the elements of that that omni-channel experience to be as effortless as buying a widget on Amazon. In fact, consumer expectations seem not to distinguish by type of product or service vendor; consumers want their banking experiences to be similar to those delivered by other industries.

Plus, an increasing number of customers expect banks to provide a toolkit, such as mobile payments, automated account origination (recognizing that there must be a balance between risk tolerance and convenience), highly personalized promotional offers, and individualized financial management tools.

As a result, banks are having to move beyond traditional thinking (such as viewing digital transformation simply as stand-alone front-end features like mobile apps), and legacy systems and processes, built up over decades, to become more agile. Leveraging customer data and targeted research, and payments channel partnerships with blockchain companies such as PayPal and Square, to deliver more personalized experiences will be essential.

But digital transformation is also impacting the culture at many financial services firms, as it forces banks to shift from a largely product-centric perspective to a customer-centric (and even stakeholder-centric) one. This change is directly influencing how banks learn about, develop relationships with, protect the security of, and, provide value to customers.

Banks must understand customers’ stated and unstated (subconscious and emotional) needs, likes, and dislikes. This applies to all the experiences along the customer journey — from exploring services and opening an account, to checking balances and conducting transactions, to applying for loans or inquiring about investment products, to receiving marketing and other communication about relevant products and services or participating in a loyalty program. And then they must apply those learnings to their digital transformation plans.

Creating A “Human Bank” In A Digital World

Although much of the digital transformation emphasis has been on technology (big data analytics and cloud, mobile apps, and the like), not everything is about technology. For instance, digital transformation in retail banking is, and will continue to be, fundamentally changing the primary roles of bank branches and the roles of branch employees.

Some banks have made closing or selling branches a key strategy as they shift to digital customer interactions. Others, recognizing the brand equity and perceived value signals this sends, have gone in a more customer-centric direction with branches. These banks are treating their branches as centers for providing personalized services and solidifying customer loyalty.

Those banks — and other companies moving in that direction — are rethinking structural and operating models, data access, hiring practices, training, and incentives for employees. At the branch level, employees are learning new skills, as they evolve from being reactive service providers to becoming ‘live’ customer interface agents and counselors.

These employees are training for modified or hybridized roles as skilled “community bankers” and relationship managers, who, armed with tablets and smart phones, guide customers as they navigate through product and service options, digital channel choices, and, at the same time, perform processing and security checking.

The “And” Environment For Customers And Employees

Digital transformation has created a powerful intersection for banks, as it has for many organizations: customer-centric omni-channel interactions meld offline and online access, information technology, and branch employees. Where customer experience and employee experience are concerned, this is indeed a value-based direction.

As we’ve seen in multiple industries, and is perhaps even more true in retail banking, digital transformation represents an “and” opportunity. Thinking “and” instead of “either/or” can help with CX value delivery, positively impact culture, bolster brand equity and enhance brand image, and build loyalty among customers and employees. It’s a sea change where art and science effectively converge to drive your business forward.

Michael Lowenstein, PhD CMC
Michael Lowenstein, PhD CMC, specializes in customer and employee experience research/strategy consulting, and brand, customer, and employee commitment and advocacy behavior research, consulting, and training. He has authored seven stakeholder-centric strategy books and 400+ articles, white papers and blogs. In 2018, he was named to CustomerThink's Hall of Fame.



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