Bank CEOs Evangelizing Digital Transformation Gain Competitive Edge- IDC

Digital transformation (DX) represents the best way for banks worldwide to prepare to respond to rapidly changing customer behaviours and market conditions.

As with any transformational journey, however, the road to DX maturity is beset with challenges.

To help today's leading banks identify the stages, dimensions, outcomes, and actions required for businesses to digitally transform their operations, organizations, products, and services, IDC Financial Insights today unveiled a new IDC MaturityScape, Digital Transformation in Banking (Doc #US41117816).

The new study serves as a guide for bank line-of-business (LOB) and technology executives to identify areas in need of improvement in support of digital transformation in five key areas or disciplines: Leadership DX, Omni-Experience DX, WorkSource DX, Operating Model DX, and Information DX.

For a traditional bank, where change does not happen often, the DX journey is easily derailed by lack of commitment at the top.

Anecdotally, according to the new report, banks around the world that seem to be following the DX path and show evidence of fundamental changes to their profitability and growth are being led by executives who instill confidence in the organization that DX is the future of the bank and are willing to make the associated policy changes to make it happen. According to Jerry Silva, Global Banking research director for IDC Financial Insights, "There is a need for a clear articulation from the top on 'how things are changing' and 'why we must change' to serve as a preamble to the DX master plan that the bank refers to and adheres to consistently. We believe that it is in this area — Leadership DX — that most banks will stumble."

To maximize the value of the IDC MaturityScape for digital transformation in banking, IDC provides the following guidance:

Assess the bank's level of maturity and capability in each of the five dimensions of DX: Leadership, Omni-Experience, WorkSource, Operating Model, and Information.

Assess the current state of leadership and its ability to create and execute the vision for digital transformation of the business.

Assess the bank's strengths in each of the other disciplines and develop a plan and process for building necessary competencies.

Develop and implement a plan to integrate DX initiatives and programs into the existing culture, including organizational changes, new digital roles, funding, talent management, operations, and information requirements.

Revise the strategic planning process to incorporate next-generation changes/threats and developments in DX.

"Digital transformation is the process that will separate the banks that will flourish over the next decade from the institutions that will perish from non-action," Silva continued. "The banks that have demonstrated strong innovation and market presence are the ones that are committed to a DX culture, starting with the CEO."

A future IDC MaturityScape Benchmark study on DX in banking will summarize the findings of an IDC DX survey to be conducted with banks worldwide.