Digital Transformation Starts with the Ultimate Business Goal(s) in Mind
By David Mitchell, President of NYMBUS
Change can be hard, especially within the banking industry. Legacy technology and long-standing processes and procedures make it difficult to implement new strategies without a complete organizational overhaul. But as technology continues to rapidly advance and disrupt the market, financial institutions must embrace change in order to compete and survive.
The path to becoming digital-first looks different for each organization depending on their unique goals. Some banks and credit unions might prefer to start from the inside out by replacing their legacy systems and investing in internal training. Others might take the opposite approach, enhancing their front-end experience first before tackling back-end workflows. A growing number of institutions are choosing to launch a separate, online-only bank to seize digital opportunities while developing their core action plan.
With so many different options, how do you know where to begin and what makes the most sense for your business model?
Determine Business Goals
Relying on legacy software remains a frustrating reality for too many financial institutions. In addition to not having real-time access to their own data, which is held hostage by the legacy providers, it also hinders productivity and the ability to quickly bring new products and services to market that consumers demand. In addition, middleware and long, expensive projects are a thing of the past. A flexible, modern platform with open application programming interfaces (APIs) is the only solution in today’s fast-moving digital age.
Digital transformation, however, is more than just a technology upgrade. It requires a fundamental shift in culture and business operations in order to support ongoing digital optimizations.
At NYMBUS, we urge banks and credit unions to start with the end business goal(s) in mind. Instead of considering the tactics of how to accomplish digital transformation, it’s important to initially understand the reason for becoming digital-first. When it starts with the “why”, the path to execution becomes much clearer.
Establish S.M.A.R.T. goals (Specific, Measurable, Achievable, Relevant and Time-bound) as a framework for success. Explore these types of questions as you build these out:
- Why is the institution undergoing a digital transformation?
- What is the timeline for the digital transformation?
- In what areas does the institution need to become more efficient?
- How will the institution prepare its employees for the upcoming changes?
- How will the institution measure success?
Develop a Digital Transformation Action Plan
Once you know exactly what you are trying to accomplish and by when, the next step is to determine how to make it happen. With your S.M.A.R.T. goals in mind, develop an action plan that is concrete, measurable and attainable.
You’ll likely find that a rip and replace of your core, or adding on a new front-end that provides your customers or members with a new user experience, is not a true digital transformation, and these cumbersome projects do not solve your ultimate business goals. Banks and credit unions need to grow deposits, attract a younger audience and expand outside their current brick and mortar footprint, all without opening new branches that no one will walk into. What they don’t need is more operational risk or another integration project, and they can’t afford to hire more people to tackle more projects while they are trying to grow.
If you’re looking to truly grow the business while also achieving your goals, you must consider launching an online-only brand or branch to capture new digital consumers and deposits immediately. Implementing a Banking-as-a-Service (BaaS) business model like SmartLaunch enables institutions to focus on their core competencies while shedding non-core operations to NYMBUS’ team of experts. NYMBUS provides the technology, digital marketing, and all of the operational resources required to run the digital bank or branch for you, while providing a unique and affordable SaaS pricing model that offers a quick ROI. And, NYMBUS can launch your new digital brand in as few as 90 days.
Starting with the end goal in mind can help you filter through the vast amount of options to understand if a particular initiative aligns with the larger business plan. Keep in mind that digital transformation is really a business transformation, and requires both technology, people and change management to succeed.