Connect with us




By John Davis, MD of BCSG

Digital is a hot topic in financial services right now. Every bank that we’ve talked to across Europe, North America and Australia is passionate about the idea of moving online. And this resonates with what key thought leaders have noted too, as we’ve seen in McKinsey’s recent report ‘The rise of the digital bank’, for example.

In our experience, nearly every bank views the journey towards digitization in a similar way. Reviewing how other industries have done it, like travel, then making every customer transaction available online. In the case of banks, that might be mortgage calculators, application forms, product comparisons tools and so on. Typically, we then see one of two things happening:

  1. The bank counts up the cost of making everything digital and realizes the price is prohibitive, generally because it involves integration with old legacy systems.
  2. The bank signs off on a colossal budget because it views the shift to digital as unavoidable, but fails to work out what the business case is, or what the payback will be.

It’s therefore refreshing to see the McKinsey report bring valuable focus and pragmatism to this topical area. In response to the problems we’ve seen above, the report suggests that banks do the following:

  • Digitise the processes that will make the most difference to the business. Where are your staff using most of their time? It might be possible to save 80% of that time by digitising 20% of your processes, for example, with a correspondingly lower project cost.
  • Make sure that the constituent parts of the wider business case benefits, including potential cost savings, are well understood by key stakeholders
John Davis

John Davis

For me, however, the most interesting point in McKinsey’s piece is around making the most of the time that’s freed up for frontline staff, after customer activity has been taken online. We see small business owners crying out for the guidance, support and tools they need to run their businesses more efficiently and effectively. The extra time staff will gain could be used to address these needs and make solutions a reality rather than an unrealised promise.

And don’t be under any illusion that banks aren’t aware of this fact. In a conversation with a Small Business banking MD of one such enterprise, I discovered that he’s actively adding up the time that frontline staff will have (and how it can be used), once online account opening is delivered.

That’s what is so exciting about digitalisation. It’s the chance to improve the quality and breadth of services offered to small business customers, both through offline and digital channels.

Editorial & Advertiser disclosure
Our website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.
Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate


Newsletters with Secrets & Analysis. Subscribe Now