Transformation as an ongoing investment
Best Practice // Change, agile, cloud, digital transformation — these are no doubt among the most popular buzzwords of the moment, and describe our inherent desire for change, combined with our great hope for improvement. These buzzwords are often followed in the same breath by somewhat anxiety-provoking terms like disruption, open banking, fintech, neobanks, challengers, and so on. With this tension between hope and trepidation, what is the best way forward?
Every generation thinks that it is living through the greatest transformation in history. Take a look in the history books of the SZKB and you will discover how punch cards gave way to the first computers, the arrival of the ATM, and the sudden advent of the internet. There are countless more examples that characterize the continuous process of digital transformation in the banking world. In the course of all of these changes, established processes have disappeared, and many commentators have predicted and continue to predict the demise of entire industries. The arrival of the first online-only banks, for instance, sounded the death knell for traditional banks. But the banks adapted, and now offer a wide range of digital services. And that’s the magic word: “adapt”. You have to adapt constantly and align your processes and services entirely with the changing needs of customers. However, it is important not to chase every temptation without any clear purpose.
In order to ensure that the digital transformation does not fall short of its aim, a few basic ground rules need to be set, since there is virtually no end of ideas and the selling points of the respective providers are highly compelling. It is therefore necessary to separate the wheat from the chaff. When the first online onboardings were taking place, there was considerable pressure to implement this future-oriented process. However, at that time the customer experience and customer added value were not yet assured. The first fundamental principle is therefore: “Be patient”. This is not always easy, especially in our fast-paced world. However, it is not necessary — or possible — to be at the forefront of every area of activity. A first-mover approach only makes sense if I can answer “yes” to all of the following questions: “Is it something unique, i.e. something that cannot be quickly copied and that can be legally protected?”, “Am I the first on the market?”, “Is it something fundamentally different/new that does not currently exist in this form?”
Even if the answer to just one of these questions is “no”, there is no competitive advantage relative to the costs and risks for the first mover. What is being referred to here are large-scale projects. Small, straightforward MVPs are entirely possible and necessary.
When it comes to identifying the right time, it is helpful to consider the principle of “customer focus”. What does this mean in practice? Here there are two questions which help to justify an investment. The first is: Does the customer really need the product or service? And the second is: Is the customer prepared to pay for it? The benefit to the customer may take various forms: Productivity: The customer saves time/money Simplicity: I can reduce the complexity for the customer Convenience: Available anytime, anywhere Risk-reducing: The risk of doing something wrong / misunderstanding something is reduced Eco-friendly:
Focus on sustainable solutions Customers have a variety of different expectations. My solutions should produce a benefit for at least one customer group. This must be clearly defined in advance.
If you have a good idea with a potential benefit to customers, it requires a business case. This brings us to another key principle: “We want to earn money”. Money may be earned in a variety of ways:
We increase revenues.
We reduce costs.
We acquire/retain customers.
This may well also happen at a later point in time, as has been demonstrated by fintechs like Revolut. The day will nevertheless come when I need to produce positive results. Regulatory requirements are an exception, which brings us to our final principle: “Never compromise when it comes to compliance”. This will always catch up with a company sooner or later.
Everyday applications at SZKB
So much for theory. How do we at SZKB now navigate through this digital transformation? By leading the way: A transformation process that calls for a high level of agility requires the right staff and a management with the right mentality. It is vital to support staff through the cultural change and to take them along on the journey. An important part of this is explaining and empowering. We have highly competent employees, who create a terrific SZKB team spirit. These teams are the cornerstone of our success. Prosperity does not come from outside — it is something we cultivate from within. The approach is similar to building a house: We began with the foundations, the IT architecture, using an enterprise architecture management methodology. Here we manage and orchestrate the interplay between strategy, technology and business requirements.
“On this basis, we began scrutinizing and simplifying the processes. In doing so, we considered the process in its entirety, starting and ending with the customer.”
This forms the basis for the agile integration of new and rapidly changing requirements for IT services. On this basis, we began scrutinizing and simplifying the processes. In doing so, we considered the process in its entirety, starting and ending with the customer. It is not digitalization per se that is at the forefront here, but rather — as a consequence of this — automation. The processes must be STP-compatible wherever possible. We are guided by the objective of a “bionic operations” model, whereby humans perform their valuecreating work dealing with complex issues using their networked expertise. We try to automate standardized operations as far as possible.
We are in the midst of our journey of digital transformation. This journey must remain manageable and navigable. Staff and customers should not become overwhelmed; in this regard, complexity, risks and dependencies are a prime concern. For example, it is possible that simple manual processes turn into complicated digital monsters. These are the types of processes that are best kept manual. The Pareto principle can be applied here: It is necessary to identify the most important 80 percent with the greatest benefit and not focus on the last 20 percent requiring the greatest effort.
We are certain that with our excellent employees, an agile management team and the right technology partners, we are in the optimal position to keep the SZKB fit for the future and to be able to make the adaptations that are required in good time.