Agile Banking Transformation: A New Era in Banking

The world of financial services is constantly evolving, with many traditional banks in the Asia-Pacific region, and indeed the world, actively pursuing digital transformation strategies.

For many of these organizations, it is the impact of disruptive technologies and digital-only challengers that have forced traditional financial institutions to actively begin to reinvent themselves from bureaucratic, machine-like organizations to agile bodies that have people – employees and customers – at the center.

For decades, traditional banks and financial institutions have operated as highly structured organizations, with rigid top-down hierarchies, mid-level bureaucracies, and specialized teams working in silos.

However, the current focus on digital transformation has caused many organizations to rethink the way they operate and consider different ways of doing things.

As many of these banks learn along the way, openness to organizational change is a critical factor for successful digital transformation.

In many cases, competitors have embraced the new digital technologies that have been driving the transformation of traditional financial institutions in the way they operate, in an effort to stay ahead.

Agility is key, as many banks are discovering in their quests for digital transformation.

However, agility doesn’t come naturally to many traditional financial institutions – it’s something that needs to be consciously built into all facets and levels of the organization.

Inherent agility enables organizations to respond to customer demands and respond to crises; but the transition to an agile organization does not happen overnight.

Main characteristics of agile organizations

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So what characterizes an agile organization? And can agility help financial institutions stay ahead of the curve?

In many cases, agile organizations have taken inspiration from technology companies, frequently making small decisions in rapid cycles of continuous innovation – testing and adjusting as needed along the way.

Agile organizations – or agile teams within organizations – also break down large, complex problems into building blocks and develop solutions for each specific component, constantly testing and improving in tight feedback loops.

For banks, an agile approach can enable them to address pain points in the customer journey in a microscopic way and build on them incrementally, placing customer-centricity at the heart of the culture of agile teams and organizations.

And while technology is obviously a key part of any DX strategy, it’s important to remember that it’s not the be-all and end-all of digital transformation; being agile and enabling changes in corporate culture and management can be just as important as digital infrastructure and technological advancements.

DBS: a flagship example of an agile bank

DBS

Over the past decade, Singapore’s DBS has undergone a complete overhaul of its business, moving from a highly bureaucratic infrastructure to an organization comprised of cross-functional teams dedicated to improving the customer experience, including reducing the time customers waste on specific processes such as reporting card theft.

In the two years since launching the new structure, DBS has been able to eliminate 250 million lost customer hours and successfully resolve specific customer issues across a wide range of processes by mapping end-to-end customer journey.

DBS’s transformation into an agile, customer-centric organization has seen its revenue grow phenomenally.

To learn more about DBS’s transformation into an agile bank, as well as examples of how other leading global financial institutions such as ING and Commonwealth Bank of Australia operate as agile organizations, download the Economist Impact report sponsored by Mambu here.

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