By Greg Thompson, Director of Change Management at nCino

To keep pace with today’s constantly evolving and competitive business landscape, it’s critical that financial institutions make the technology-supported changes that drive successful digital transformation and organisational growth. A global McKinsey survey found that only 16% of respondents said their organisations’ digital transformation efforts have successfully improved performance and also equipped them to sustain changes in the long term. Implementing technology is only half the mission; ensuring the people within your organisation are receptive and capable of executing change is equally as important.

Too often, financial institutions recruit and hire employees based on specific skills. With technology evolving every day, specific product skills this year may become obsolete the next. Therefore, the most important skill to identify is someone who welcomes change and thrives in an environment of constant change. Without addressing resistance to change, it won’t matter what technology you implement.

Here are some key tips on how to implement a successful digital transformation in your institution, through both the technology you adopt, and the people you employ to drive it forward.

1. Hire the right people 

Digital transformation is inevitable in banking and to succeed financial institutions must embrace this evolution. But if employees lack the right mindset to change, the digital transformation is unlikely to be truly successful.

With the constant flux of unpredictable and disruptive technologies, it is often difficult to know what skill sets to hire for and in turn, find employees with those skills. Instead, employers are increasingly putting less weight on degree levels and specific tech skills, and instead are looking for employees with a positive outlook and attitude.

New technologies emerge quickly. Those who have the agility to transfer their skills and who are enthusiastic to learn, are arguably as valuable as those who have in-depth knowledge of certain technologies but less experience adapting to changing business processes. It’s a focus on “hiring for attitude, training for skill”—a lesson we have learned at nCino as we embrace enthusiastic learners to drive change.

Employers can teach technical skills and offer training to bring staff up to speed with new technology. But, if you have the right people who can flex, adapt and work effectively with others, you’ll be able to achieve your digital transformation more successfully.

2. Set the right tone at the top 

Digital transformation is tech-powered but people led, so leadership teams are key to driving success. Part of any successful digital transformation is having buy-in from all levels of the organisation. But it also requires the appropriate ‘tone at the top’ to champion it. Sustainable transformation requires leaders who are visible, vocal, and active in combatting all forms of resistance throughout the transformation.

Setting the right tone at the top includes leaders themselves using the new technology to lead differently. New technologies provide leaders a strategic advantage as real time information about the business is available to ask new questions, celebrate successes, or identify bottlenecks. Cloud-based technologies that empower leaders to lead in new ways also enable employees to see how their work connects with broader organisational objectives.

Effective leaders should formulate a clear vision of the digital transformation and communicate it throughout the organisation on an ongoing basis to engage everyone. Leaders who communicate the change underway frequently with employees are three times more likely to experience a successful digital transformation, according to McKinsey.

Also, a leader’s failure to align the goals of a digital transformation with employee values and behaviours can create additional risks to a business’ culture, such as low morale, if not managed properly. Whereas a comprehensive and collaborative approach can help shift the culture to understand and embrace digital transformation.

A great way for leaders to alleviate concerns is to solicit feedback and engage employees at all levels in the process. This helps build ownership in the change and makes employees more likely to support the transformation, and importantly, champion it.

For instance, traditional financial institutions might engage staff in branches to trial new technology and give feedback throughout the process to bring them onboard early. We partnered with a leading financial institution, which engaged all levels within its business, from the C-suite to those on the front line to work directly with the digital team when it implemented its transformation. Integrating the new system with the front office working alongside the back-end ensured an inclusive culture and long-term change success.

McKinsey reports when employees in key roles are more involved in a digital transformation than they were in past change efforts, a transformation’s success is more likely. 

3. Empower people to work in new ways 

Digital transformation can significantly help employees in their daily duties. For instance, moving away from manual and routine work and instead allowing them to reduce repetitive tasks and focus on more important and creative tasks. But any change can be daunting, especially when employees aren’t looking at new digital banking tools and software as empowering their jobs, but as threatening the existence of their roles.

Modern digital banking technologies allow those working in financial services to become more productive than ever before. Employers need to regularly remind their teams that even as the digital tools of the trade become more powerful, they’re still only tools. It’s the employees that remain the core of successful businesses.

Blumberg Capital’s recent survey found about half of respondents are ready to embrace new tech, while the other half are scared it will take away their jobs. Despite the majority of employees (72%) understanding that artificial intelligence is intended to cut out the repetitive parts of their role to allow them to focus on the complex and interesting tasks, 81% are so fearful of being replaced that they’re unwilling to hand over their drudge work to technology.

Resistance to change can emerge even if employees embrace the idea of new technology.   In the face of an already heavy workload and multiple concurrent priorities, a dramatic new technology requires training and adapting to a fundamentally new way of performing even the most basic tasks. Constant communication from leaders is critical to keep employees focused on the strategic imperatives driving change, while highlighting a handful of benefits of the new technology for each work team.

Additionally, transformation systems are crucial for institutions to attract the right talent. As digital transformation eliminates the more repetitive and less creative tasks that deter top talent to their organisation– new technology allows banks to adapt and build a people-first, talent-centric organisation.

Digital transformation initiatives often reshape workgroups, job titles, and over the long-time business processes. Organisations need to consider a range of training options for employees to maximise learning effectiveness and create an agile workforce. In fact, McKinsey research shows that those organisations who offer continuous learning as part of their change efforts are more likely than others to report successful digital transformation.

In Summary

With digital transformation’s focus on automation and smart technologies, it may seem somewhat counter-intuitive that people are the key to unlocking its value. Even if the technology is perfectly designed, the ROI the organisation desires from its investment will certainly fall short if people are not prepared for the change. Education and communication are key factors when we are assisting a successful digital transformation for financial institutions, however, getting buy-in is about more than just compliance – it’s about winning people over to a new approach or tool. When leaders actively align and visibly support the transformation, a dramatically better experience is possible for the employee, customer and shareholders.