Digital Transformation – Optimising Business Change in Banking, Finance & Insurance


Five industry experts consider the challenges facing financial service providers, insurance firms and banks in cost-effectively harnessing new digital channels and technologies to deliver greater customer value, potentially also transforming business models and relationships.


Anthony O’Hara, Certeco
Mark Becker, Certeco
Hugh Hessing, Aviva
Steven Quigley, Northern Trust

Hosted by Mike O’Hara, The Realization Group

The accompanying Financial Markets Insights article is available to read and download

Mike O’Hara: Hello, and welcome to Financial Markets Insights. Today we look at the subjects of business change optimisation in the banking, finance and insurance sectors. With a particular focus on digital transformation.

The prevalence of the internet and mobile communications in today’s society has led to the rise of FinTech, and more recently InsurTech, as the finance and insurance industries adapt to this changing landscape.

But with many incumbents in the sector relying on legacy technologies and legacy business models, what are some of the challenges that they face? And how can they go about addressing these challenges in order to evolve to a multichannel organisation?

Mark Becker: First of all, I suppose we have to mention FinTech. FinTech aren’t encumbered so much by the regulatory environment. They are creaming off the high margin products from the retail banks. They also have a digital appeal for the demographic generation of millennials. So there is a lot of action in the FinTech market which is threatening the banks’ traditional services and particularly payments and peer-to-peer payments.

So the challenges facing retail banks are quite amazing in terms of overcoming the new force. They suffer a little bit from legacy management thinking and legacy IT. I think the prudential conduct authority advised / recommended that they should look hard at investing in technology to address some of the requirements of their customer base.

Anthony O’Hara: When considering digital change, organisations need to consider three important factors. The first factor being, are you changing the right things? This comes back to ensuring you’re aligning your digital change agenda to your strategic aims.

The second point is, are you changing things in the right way? This comes back to how you execute change. Do you have the right skills, the right people, to execute the change? Sometimes you may need to engage with external consultancies or experts to help bolster this capability.

Finally, are you ready for change? This involves making sure you have the right level of change maturity to go ahead and implement the change. This includes having the right leadership, the right culture within the organisation to absorb the change, to ensure that the change is successful.

Mike: Leadership and culture are obviously key elements when it comes to digital change, but what does this mean from a project, process, and people perspective?

Anthony O’Hara: It’s important to have a clear view of what your digital change agenda looks like. This includes prioritising the relevant projects to enable that digital change. Quite a lot of the time this involves looking at your business capabilities. For example, if you want to gain some sort of strategic advantage, you need to look at what business capabilities enable that. That may include creating something like a new digital brand for certain customers. Or on the flip side you may be just trying to enhance certain business capabilities to deliver things in a more effective way.

Richard Morecroft: Getting your staff and customers bought into what you’re trying to achieve means that they will adopt it. They will contribute towards it. I have this view that a business has change at two levels. There is a macro change, which is that vision. It’s that clarity about what we’re trying to achieve as an organisation. Then within it, you’ll have micro programmes of change that dovetail to that larger agenda.

That means that those entities, those micro projects, are under the guidance and steerage of people in the organisation. That means they’re empowered, and any guy from HR will tell you if somebody’s engaged, empowered, they feel like they matter, they know where they’re going, they’re going to be much more productive.

Mike: So we’ve looked at some of the considerations from the point of view of the organisation, but what about customers? How can firms align their digital transformation programmes with customer needs?

Hugh Hessing: One of the things that our customers always say to us, “Make it simple, make it clear, make me understand why I can’t do things in one process, not two or three”. So by listening to our customers attentively, we have to design different ways in which we can simplify our products and our process.

People are much more exacting through digital channels. They don’t get up in the morning and enjoy doing insurance or enjoy doing banking. They have to. But if we can make it simple, and an engaging process that’s really simple to understand, they won’t begrudge doing it and will come back to us more, hopefully, than some of their competitors.

Mike: Firms obviously need to look outwards towards their customers, and inwards towards their own organisations when undergoing digital transformation. But there is a third factor, and that is looking across the industry for opportunities to collaborate, particularly in the adoption of new technologies such as blockchain, for example.

Steven Quigley: In the past, a lot of the collaboration was driven by, perhaps, market utility like SWIFT, as an example. These days, you’re getting individual firms talking to each other and then bringing other firms in and looking to collaborate around a particular point of technology or a delivery, because they don’t want to or can’t afford to do it themselves.

So there are quite a few that are springing up at the moment, and know probably two or three new utilities that are coming on. But again, it seems to be some of it is around blockchain, but a lot of it is still around the pressures of delivering the business right now.

Documentation is key, but the big issue around that is identifying the client. So if you have a digital identity, a lot of that problem will go away.

If you look at the settlement life cycle, if you take the DTC for example, I think their systems are factored around 800 million trades a day. Now the question mark is, can blockchain deliver the same?

Mike: So what are the key success factors around digital transformation? What can make the difference between a successful transformation programme and one that fails?

Mark Becker: Digital transformation, business change optimisation, must look at the holistic view of the whole process with the customer. Taking a customer-centric view, the marketing to the customer, the selling to the customer, setting up the customer, provisioning, fulfilment, delivering the service or the product, whatever it is, the payment alone, the mortgage insurance – I’m talking financial services here, supporting the customer through multichannel and then remarketing. It’s about retaining your customer, growing your products with your current customer base, but most importantly, expanding your customer base. So it’s retain, grow and expand.

This is a key mantra that financial services need to take, and they need to also go into partnership with some of the FinTechs as well.

Richard Morecroft: The chief change officer, and I’ve seen this title advertised, is the CEO. It is the board. They are the empowerers of change, and they have to keep up the momentum in continuous improvement, continuous change. Without that momentum, things will grind to a halt, that leadership. That is the most successful thing.

The thing I say to people when I talk about momentum is, “You can’t change the direction of something if it isn’t moving. You’re just pointing it in a different direction. That’s not change. That’s just a signalling”.

Mike: It’s clear that digital transformation in banking, finance and insurance is a huge topic with many elements to consider. Maybe three of the most important are to align the change programme with the strategic aims of the organisation, to treat the transformation as an ongoing process rather than an end in itself, and to put the needs of the customer first.

Thanks for watching, goodbye.