Lately when businesses have discussed improving the customer experience, increasing efficiencies, attracting and retaining talent, and generally staying competitive, the term “digital transformation” has come up. Like Web 2.0, cloud computing, and social media, digital transformation can be the type of initiative that businesses discount or ignore at first. Those that are reluctant risk being left behind.
The increase in disruptive technologies – many brought upon by the emergence of cloud computing and SaaS applications – has created new business models and enabled opportunities for businesses and consumers in nearly every industry. As a result, competition has intensified and forced businesses to find alternative approaches to innovate processes and enhance customer experiences. In order to stay relevant and grow, businesses are required to undergo a digital transformation.
But what does “digital transformation” really mean? By definition, “digital transformation” is the reinvention of an organization through the use of digital technology to improve the way it performs and serves its constituents. (The term “digital” can be generally considered to mean technology that generates, stores and processes data.) Within these parameters, businesses need to enable customer and partner engagement across multiple channels – web, laptop and mobile – to seamlessly access and leverage applications and systems to achieve an end goal, whether it’s buying a product or accessing a service.
While most businesses operate in a digital workplace already: computers, software, hardware, email, VoIP, apps, mobile devices and so on, many of these tools and the infrastructure that hosts them are now required to deliver agility and speed with greater security. There is a growing need for businesses to use both legacy and new technologies to enable digital sharing and collaboration between employees and with their customers and ecosystem partners. This introduces a new set of challenges involving security, privacy and data protection. Therefore, it is critical that businesses transform to a more modern, efficient and frankly secure workplace in order to enable digital collaboration and a superior customer experience.
The need for agility demands that businesses deliver a digital experience now. But the process of transforming a digital infrastructure has its own challenges as every enterprise has to deal with a vast hybrid environment comprising legacy systems, and on-prem and SaaS applications.
IT faces the following key challenges when it comes to digital transformation:
Adapt or Perish
So, what must happen for an organization to digitally transform its business?
Simply buying and deploying technology solutions doesn't achieve digital transformation. A rip-and-replace approach to transforming an enterprise’s existing infrastructure could take anywhere from 3-5 years to reap benefits from digital transformation. That’s time that organizations just don’t have. The best approach to a successful digital transformation therefore must involve an agile and blended approach that extends legacy systems and enables new apps that leverage technologies such as SaaS, IaaS and PaaS. A blended approach will place organizations in a better position to enable digital interactions between employees and their customers and partners that rapidly deliver value, accelerate time to market, improve the user experience, and gain a competitive advantage.
The banking industry is a prime candidate for digital transformation. Financial technology (fintech) organizations like Square, Lending Club, PayPal, Google Wallet, Apple Wallet and many more have disrupted the banking industry with a vengeance, significantly impacting customer loyalty and bank profits. While traditional banks have embraced digital technologies by moving from automated tellers to on-line and mobile applications, banks have not digitally transformed.
In a study conducted by Oracle and Efma, a non-profit organization serving the global financial services industry, researchers learned the majority of banks surveyed are using technology-driven marketing triggers for customer focused campaigns and machine learning algorithms for better product targeting however very few of the banks surveyed (none in fact from the US) are using real-time location information or social media activities for marketing. In fact, only 6% of organizations surveyed indicated that they used social media insight for understanding their customers or engagement. These banks are essentially leaving money on the table.
If traditional banks wish to remain relevant (read: in business), they need to transform. Many financial institutions for example are forging partnerships with fintech organizations to offer additional products. A greater selection of products that are easily accessed increases stickiness.
What does a digital transformation look like for a banking customer? Gys Hyman of Deloitte Consulting, paints a vivid picture in a recent article on digital banking:
A potential customer who opens a bank account in a matter of minutes—on a smartphone in a coffee shop with a selfie and optical recognition for physical ID—already likes her new bank. When her out-of-state ID triggers a personalized message, “It looks like you’re moving to our state—welcome!”—and invites her to click for information on pre-approved home loans, the customer relationship deepens. At the airport on her laptop a week later, when the customer reads the real estate statistics you sent, she now values the relationship. On her daughter’s 13th birthday, you let her know she’s eligible for a teen money management course, and she feels like she’s gained more than a bank.
This is digital transformation. It highlights how an organization can use digital technology to enhance innovation, creativity and customer satisfaction. Any organization, banking or otherwise, would be foolish not to embrace true digital transformation.
Security – a Growing Concern
The Oracle/Efma research also revealed over half of the banks surveyed were not using real-time analytics and only 6% of banks were using real-time analytics on a daily basis. Banks admitted their hesitation stemmed from concerns over a potential conflict with the privacy of client information, which is a growing concern for banks.
It cannot be overlooked that the digital transformation is occurring at a time when data breaches are increasing in both severity and frequency. A digital workplace therefore must be a secure workplace. And this is no longer the sole responsibility of the IT department. A recent study conducted by BMC and Forbes Insights revealed 69% of executives confirmed that digital transformation is creating fundamental changes to their security strategies.
Brian Downey, senior director of Product Management, Security Operations and Automation at BMC, elaborates, “given the amount of risk out there in the world today and the amount of angles they're getting attacked from, businesses are demanding an increasing level of accountability. In my mind, the operations team is the one that has control over shutting and locking the windows. That's their role. More and more customers feel that way."
Bringing it All Together with Secure Customer Engagement
Embracing digital transformation to enhance customer engagement enables organizations to realize a number of key benefits, including:
One of the fundamentals of digital transformation is enabling organizations to collaborate on content – customer data, financial records, contracts, sales forecasts, marketing materials, multimedia, etc. Driving increased efficiency, policy enforcement and security to drive trust and value in the digital age especially in highly regulated and segmented industries like banking and healthcare, isn’t just beneficial but an imperative.
To learn how CIOs can digitally transform their businesses by significantly enhancing the way employees collaborate on content with their customers, partners and other stakeholders, please join us on January 31st at 11am PT for an informative webinar. You can reserve your seat by registering here.