The idea of digital transformation—optimizing business models, processes, and products through digital technology—has taken hold of the financial services world. According to a 2019 Gartner report, digital transformation is the top business priority for one-third of CIOs at financial services companies. But only 12 percent of financial services companies are at a mature stage of their digital transformation, while almost half of finserv organizations are still in the very early stages of their digital transformation process.
So why the gap between the desire to embrace digital transformation and the ability to carry that transformation out?
For leaders in financial services organizations, initiating any kind of change can be a daunting challenge, especially if that change involves new technology. Within large, traditional financial institutions, the organizational structure can be complex, oftentimes leading to silos that present a barrier to org-wide change. Even smaller, more agile financial services businesses may struggle with change management due to risk aversion and a high level of governance.
In addition to institutional challenges, it’s not uncommon to meet resistance from at least some employees when proposing a change to the tools or processes they’re used to. Habits, whether they serve us well or not, can be strong, while the unfamiliar can be uncomfortable.
But there are strategies you can employ to streamline the change management process as your financial services organization undergoes a digital transformation.
First Things First: Evaluate the Reason for Change
If you’ve been tasked with evaluating new technology for your finserv organization, don’t fall into the trap of change for change’s sake. Before making any kind of change, determine the reason behind it and the expected outcome. Are you confident it’s a change that will benefit your institution, your team, and your customers or members?
Is the proposed change consistent with your goals and objectives? Will the investment in time, money, skills, and effort result in a solid return?
Don’t choose a specific technology just because you read an article about it or your peers or competitors are already using it. Think critically about what will bring the most value to your organization.
Consider the Mindset of Your End Users
To succeed at implementing a technology change, you must be able to empathize with the people who will be using that technology on a regular basis. Any time you ask your team members to adopt a new tool or process, they’re asking themselves, either consciously or unconsciously, “What’s in it for me?” So take the time to consider how a new tool will make work easier for its end users, and clearly communicate these benefits to your team members.
For example, let’s say that your financial institution’s contact center is getting ready to adopt a knowledge sharing platform. From a business perspective, the key benefits of this technology might be that it reduces the time it takes customer service agents to find answers to customer questions, which improves customer satisfaction. While this will no doubt be a benefit for your customer service agents as well, another benefit from their perspective might be that the platform helps them feel more confident that they’re finding the most accurate information for customers– and reduces the stress that comes with scrambling to figure out where to find an answer.
In addition to explaining the benefits of the new technology to your end users, you must actively and sincerely listen to their ideas and concerns. Consider creating a group of beta users who can test out the new technology and provide feedback. Allowing your end users to help shape how your organization uses the new technology will help ensure buy-in.
If you feel like your financial institution is siloed by department, team, or location, you’re not alone. Research from McKinsey & Company found that one of the biggest barriers to digital transformation is the presence of functional and departmental silos.
So how do you promote a technology change across departments and functions when each department may have its own tech stack and processes that they’re used to?
You need to start by bringing together the heads of each department and getting them aligned around the vision for the new technology. Keeping the “what’s in it for me?” principle in mind, explain to these leaders how the change you’re proposing is a net positive for them. For example, your head of HR might be most interested in learning how the new technology could improve the onboarding process for new hires, while your Chief Customer Experience Officer might be most interested in learning how the new solution could improve the interactions between the financial institution’s employees and customers.
Once you’ve got leaders from across the organization on board with the change, they can act as ambassadors and help promote the new technology to their teams.
Learn From the Change Management Experiences of Your Financial Services Peers
How have you seen other financial services institutions approach change management and digital transformation? Have other institutions adopted the tech solution you’re looking into? What about companies in different industries? What can you learn from them that you can adopt and implement for your business? Just as importantly, what mistakes did they make that you can avoid?
Attend industry conferences, workshops, and networking events to learn from the experiences of your peers. Read case studies for the technology solutions that you’re evaluating. Reach out to others in your network who have helped lead a digital transformation at their organization and see if they’re open to a meeting. Do whatever you can to learn from those whose organizations have gone through a similar change so that your organization can promote its own digital transformation as strategically as possible.
And finally, remember that change, whether a company-wide culture shift or the implementation of a specific tool, involves much more than just technology. It involves people. If you approach change with empathy for those involved, make the benefits of the change clear to those who will be impacted, and take feedback seriously, you’ll be well on your way to a successful digital transformation.