Transform or Optimize?
Defining the digital journey in an era of disruption
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Modernizing technology strategy in the financial services sector has become critically important due to new competitors, unforeseen interruptions and increased customer expectations. Following the unique layer of disruption of recent years, many banks, credit unions and wealth management firms are re-evaluating their go-forward digitization plans.
In today’s business climate — whether the impact of pandemic shutdowns, increasing fintech incursion, threats from digital giants wading into the field or changing customer behaviors — financial institutions need a road map for their next technology move.
Digital business optimization provides significant nearer term benefits and should be viewed with equal merit as digital business transformation. The solution is to select the optimum mix of optimization and transformation in specific areas.
So – are you looking for a digital transformation or digital optimization?
And what’s the difference?
Both terms have been thrown around for years, but for many enterprises, the transformation phase has passed. You’re paperless, and you’re increasingly working to meet the digital demands of your increasingly digital customers.
Where to now?
For leaders who know they need a plan to keep moving, defining your digital journey is critical.
Digital transformation vs. digital optimization
What is digital transformation?
Though long talked about, digital transformation isn’t as ubiquitous as it once seemed. In a recent report, Gartner described it this way:
“Digital business transformation is the part of the digital journey that pushes the enterprise beyond the current business model or public mission, as a whole or in a specific business unit.”
Examples of digital transformation
- Launching new and/or innovative digital products or services
- Implementing new enterprise-wide platforms
- Adopting new business models
What is digital optimization?
Newer to the game, the term digital optimization more accurately reflects where much of the financial services industry is. The same Gartner report defined it as:
“Digital business optimization is the part of the digital journey that improves the enterprise’s current business model or public mission.”
Digital optimization is the path on which many of today’s financial firms are on. It means leaning into digital solutions that can drive smaller, incremental improvement for strategic business priorities, like accelerating growth, simplifying compliance and improving customer experiences.
Examples of digital optimization
- Increasing efficiency and productivity with workflow management and intelligent automation
- Automating compliance with regulatory technology
- Optimizing customer communication with enterprise-wide solutions
The digital journey for banks, credit unions and wealth management firms
Unless your financial organization is:
- a disruptor with no existing business model to adapt
- focused on investing primarily in rapidly transforming existing business models to get ahead of emerging technology in the next few months
- digitally challenged in a way that makes survival in the current and predicted future business landscape impossible…
… Then it’s likely that optimization is a digital journey your firm may want to embark on. This is because digital optimization:
- Enhances the efficiency, productivity and outcomes of existing business model practices
- Supports existing digital efforts until the optimal transformation route becomes clear
- Creates a gateway to essential digital upgrades, such as optimizing existing technology and processes for cloud deployment
How financial firms can optimize strategic priorities
Strategic business priorities drive everything in your organization, but without a way to advance them to meet ongoing incursions from disruptors, the strategies simply can’t thrive. Consider these digital optimization paths as you define your digital journey.
Priority: Accelerate growth
Leverage these optimization tools:
- Robotic process automation (RPA) (RPA) to drive efficiencies, improve productivity and reduce cost — including around onboarding, loan processing and compliance reporting
- Cloud-ready capabilities to maximize ROI on IT investment, secure systems and data and modernize IT infrastructure in a way that improves your digital footprint
- Automated document tracking to streamline important customer-facing processes and enhance speed, accuracy, transparency and customer trust
Priority: Simplify compliance
Leverage these optimization tools:
- Regulatory technology (RegTech) to make compliance manageable via automation, the aggregation of governance policies and scalability
- Intelligent automation to collect the right information and consolidate data from multiple disparate systems for reporting
- End-to-end document management to apply relevant regulations to all applicable content in a timely manner, from document capture to retention to destruction
Priority: Deliver exceptional customer service
Leverage these optimization tools:
- Customer communication management (CCM) to create timely, personalized pieces that are automatically delivered at the optimal time using the optimal channel for your customer or member
- Priority work management to create dynamic workflows to help your team prioritize tasks based on importance and urgency
- Complete view of data so customer service employees have the insights they need to quickly and accurately manage all interactions with customers and members
Chart your digital journey with Hyland
As your organization progresses on its digital journey, new and unpredictable disruptors are bound to continue to arise. The road forward is clear: By optimizing and improving the digital journey of your customers — and that of your internal team members — your financial firm will be more productive, more profitable and primed for long-term success.
VENTURE FORTH. Get the details you need to navigate your digital journey in the ebook, "Three paths to accelerating growth in financial services.”
iGartner, Digital Business Ambition: Transform or Optimize?", Hung LeHong, Graham Waller, 15 January 2021.
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