Digital Maturity in Banking: Success Factors

The world is getting more and more digital. The pace of change is fast, and every company needs to adopt quickly. Banking is among the sectors highly impacted. Banks are forced to be more intelligent, much easier, personally relevant, and certainly more digital. Executives are aware that an increased digital maturity will provide competitive advantage and business value. It is not an easy journey though; it takes effort, commitment, and time to realise the value.

Banks across Middle East and Africa are striving to deliver distinctive customer experiences, offer high-quality services, and stay relevant to customers. There is no silver bullet to do that. However, there are certain areas to focus on to deliver great customer experiences.

Research by Digitopia and Union of Arab Banks (UAB) reveals that, typically, banks across the region have managed to build certain digital capabilities, achieve a certain degree of integration, and recognised the importance of data. Further integration of processes, advancing analytics capabilities, and reskilling and upskilling employees are hot topics on the agenda.

There is a significant gap between leaders and laggards. Leaders perform better across all dimensions (Figure 1). Below are key factors for their success:

Figure 1: Comparison between Leaders and Laggards

• CustomerFocus:Thecustomerbaseofparticipatingfinancialinstitutionsdiffer significantly, from around a million to more than 10 million. Regardless of the size of the customer base, all strive to deliver distinctive customer experiences, offer high-quality services, and stay relevant to customers. The key difference lies in how they gather, organise, interpret, and use customer data. The best-in-class have developed analytical capabilities and are working on improving prediction capabilities, crafting seamless journeys, and providing additional value to customers.

• OperationsOptimisation:Thebest-in-classhavemanagedtoeliminatepaperworkfrom many processes to the degree allowed by regulation. A range of key processes are

designed seamlessly and omnichannel. Data flow from the front office to the back office

is fast.

• PeopleCentricity:Manybankshaveexperiencedashiftfrombureaucraticwaysof working to more flexible practices. They are working to incorporate agile practices and work flexibly based on self-management. The best-in-class are ahead in terms of flexibility in ways of working and richness of development programs. They are working in agile ways, and reskilling and upskilling employees to adapt to the changing business needs.
• TechnologyUse:Almostallbankshavereachedacertaindegreeofmaturityintermsof infrastructure and integration. The best-in-class manage to leverage technology as an enabler of business performance. They have done a better job at integrating systems, automating processes and developing technology teams to support business objectives.
• InnovativeApproach:Infinancialservices,newbusinessmodelshavebeenemerging, posing both challenges and opportunities. Unsurprisingly, all banks are aware of the need to craft innovative solutions. Factors that differentiate leaders stand out as vision, culture and governance, i.e. the teams, budget, place and tools involved. They are doing a better job at leveraging ecosystem capabilities, as well.
• StrongGovernance:Allbanksaremanagedtransparently;goalsandkeyperformance indicators are identified and monitored. leaders are aligned strategically with all company activities streamlined towards corporate purpose, strategy, and goals. They have corporate strategies, a committed Leadership, and empowered teams to achieve objectives. Every bank has a lot of work to do regardless of its existing maturity level. They must understand where they are on their digital journey, prioritise action areas, and take action to maintain or accelerate progress.