Digital transformation in banks: The trials, opportunities and a guide to what is important

It has never been this hard to be a successful bank, as they battle with the prefect storm of relentlessly increasing regulation, the growing threat of new entrants with new business models targeting small but very profitable slices of the bank's value chain, new technologies that make it easier and cheaper to launch new banks or FinTechs, the perils of blockchain (outside the scope of this paper) and customers who have lost their respect for ‘banks’, despite most banks doing little wrong leading up to 2009. It goes on to examine the changing demands of these customers having new demands from their banks set by superior experiences enjoyed in their other digital relationships, with the banks playing catch-up. Banks have not lost their determination to be at the centre of their customers' financial world and win back the former relationship that both parties once enjoyed. This paper explores the forces impacting the banks at present and probes into what customers want from their existing banking relationship. It also presents ideas and approaches for the full-service, multi-channel banks to consider as they continue with their re-assessment of where to allocate precious capital, what markets and with what target operating model will deliver new rewards and how they will respond to their customer's demands on how they want to interact with their bank in the new digital age. The banks that will emerge successfully from their digital re-invention journeys will be the ones that arrive at the destination ahead of their peers. One way or another, the past ten years have certainly been a challenge for most banks, but the next ten years promises to be a very exciting decade in banking, with lots of changes to look forward to.