The financial world is changing drastically. In my many conversations with bankers around the world since joining Wipro Digital, the vast majority recognize the strategic need to respond to their industry’s disruption.


This article in the Harvard Business Review looks at transformative business models and offers  a timely reminder from the authors:


“We usually associate an industry’s transformation with the adoption of a new technology. But although new technologies are often major factors, they have never transformed an industry on their own. What does achieve such a transformation is a business model that can link a new technology to an emerging market need.”


This would mean that transformative technologies such as mobile, blockchain and artificial intelligence need to be assessed and developed based on an emerging market need and a robust business model.


How should banks adapt?


My discussions with the bankers often progressed to how a bank can be adaptive; the focus was then on creating a robust method of transitioning from strategy to implementation. The bankers recognized that their operating environment is unpredictable, and therefore requires organisational agility.


This all sounds positive, right? Not necessarily, as all the above discussions assume there is a blueprint for all banks to follow to become or remain competitive.


To me, the unasked adaptive banking question is “how can my bank move from convergent thinking to divergent doing, based on customer needs and my (potential) capabilities?”


From a strategic perspective, it’s insightful to understand whether the person and/or organisation wants to be a disruptor, innovator, ideator or bureaucrat. This then defines the right strategic options available to them.


N.B.: A quick proxy answer to the above question is the design of the bank’s reception and organisation of the people working there, to see if it is like every other bank, or is in some way distinctive.


Value triangulation and the need to differentiate

insights-why-strategic-financial-rules-must-be-rewritten-for-the-digital-age-2Every banking CEO needs to have a clear strategy specific to their organisation’s internal and external challenges that is differentiated from the competition. There is some global commonality in terms of strategic foundation: every bank needs to deliver change rapidly and frequently. The better a bank is at delivering ‘the stuff that customers want’ the more likely it will survive the onslaught of disruptors and innovators. In addition to better meeting customer needs, most banks must deliver cost reduction and drive income. This value triangulation can be understood as follows:

A successful value triangulation delivers customer desire in the most efficient way possible.


This isn’t about value chain mapping and cost re-engineering, it’s about creating great customer experiences with adaptive capabilities and capital-light business models. Unlike cost/income ratio, customer desire is not a familiar banking concept. For adaptive banking to be truly feasible, the value triangulation needs to be foremost in the minds of bank boards, c-suite executives and throughout the organisation.


Customer experience comes first

insights-why-strategic-financial-rules-must-be-rewritten-for-the-digital-age-3A culture of centralisation, product-centricity and control via process stifles change. Therefore, new spaces and ways of working are essential for any bank to be adaptive and create their own Digital DNA. Many employees of banks don’t use their own products and therefore don’t test the customer experience. When they do test the products and have a less than perfect experience, they often make excuses based on their organisational knowledge. Employees need to be the most critical customers, and should feel fully connected to other customers and their experiences.


Implementation of new lean business models will need to flow through the organisation, and align to the desired customer experience. Business leaders who identify the experience features that matter most to customers will focus the organisation on accelerating delivery momentum. Rather than requesting large-scale, product-led programmes, leaders need to focus on small-scale features that are continually launched and refined. This moves away from the grand strategies or silver bullet thinking that often prevails during annual planning cycles, and moves to agile customer-centric strategies. Organisational change is fundamental for creating adaptive banks with Digital DNA.


Fail fast, succeed even faster

Growth will only accelerate if adaptive technology architectures and agile software delivery methods are available to deliver the relevant features. A ‘deliver, measure and learn’ approach will amplify feedback across the organisation to drive commercial decision-making with regard to failing fast and succeeding even faster. The ongoing cycle – of ideating, designing, building, shipping, measuring, learning, and (of course) adjusting customer features – needs to become the norm.


By becoming adaptive, the bank’s capabilities (people, methods, technologies, values) become more attuned to customer needs, and then it’s far easier to deliver personalized offerings. For example, the bank’s data can be used to create feature personalization, or the bank provides flexibility for customers to pick and choose what is right for them. A customer should always be able to overwrite the choice an algorithm provides.


Innovation, transformation and beyond

It’s worth noting here that I see more transformation desire and delivery in IT departments than in business departments. Agile ways of working are often still alien to incumbent bankers in product, finance, compliance, marketing and frontline teams.


The banking playbook has already been rewritten for the digital age. Imagining the unimaginable is exciting, and turning it into commercial reality means bucking the system.



Darren Oddie

Darren Oddie

MarTech Practice Partner


Darren Oddie is MarTech Practice Partner at Wipro Digital, where he works with global financial services companies on digital transformation and innovation. He’s had hands-on experience of designing and building financial services brands from a blank sheet of paper to industry leading propositions in both corporates and startups.

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