Agile Banking Transformation: A New Era in Banking

Agile Banking Transformation: A New Era in Banking

by November 17, 2022

The world of financial services is in a state of constant change, with many traditional banks across the Asia Pacific, and indeed the world, now actively pursuing digital transformation strategies.

For many of these organisations, it has been the impact of disruptive technologies and digital-only challengers that have compelled traditional financial institutions to actively begin to reinvent themselves from being bureaucratic, machine-like organisations into agile organisms which have people – employees and customers – at the centre.

From machine-like bureaucracies to agile organisms

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

However, the current focus on digital transformation has been a catalyst for many organisations to rethink the way they operate and look at different ways of doing things.

As many of these banks are learning along the journey, being open to organisational change is a critical factor in successful digital transformation.

In many instances, it has been seeing competitors embrace new digital technologies that has been the driving force behind traditional financial institutions transforming the way they operate, in an attempt to stay ahead of the curve.

Agility is key, as many banks are discovering during their quests towards digital transformation.

However, agility does not come naturally for many traditional financial institutions – it is something that needs to be consciously incorporated into all facets and levels of the organisation.

Having inherent agility enables organisations to keep up with customer demands and respond to crises; but transitioning to an agile organisation doesn’t happen overnight.

Key characteristics of agile organisations

So, what characterises an agile organisation? And can agility help financial institutions stay ahead of the curve?

In many instances, agile organisations have taken their cues from technology companies, making frequent small decisions as part of rapid cycles of continuous innovation – testing and adjusting as needed along the way.

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

For banks, an agile approach can enable them to solve pain points in the customer journey in a micro fashion, and build on these incrementally, with customer-centricity at the heart of the culture of agile teams and organisations.

And while technology is obviously a key focus of every DX strategy, it’s important to remember that it is 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 advances.

DBS: A leading example of an agile bank

Over the last decade Singapore’s DBS has undergone a complete business overhaul, transforming from a highly bureaucratic infrastructure to an organisation made up of cross-functional teams that are dedicated to improving the customer experience, including reducing customer time wasted on specific processes like reporting a stolen card.

In the two years since launching the new structure, DBS has been able to eliminate 250 million wasted customer hours, and has managed to solve specific customer pain points across a wide range of processes by mapping end-to-end customer journeys.

DBS’ transformation to an agile, customer-centric organisation has seen its revenue surge phenomenally.

To learn more about DBS’ transformation to an agile bank, as well as examples of how other high profile global financial institutions such as ING and Commonwealth Bank of Australia operate as agile organisms, download the Mambu-sponsored Economist Impact report here