The Covid-19 pandemic has altered global business dynamics, perhaps forever. Like all businesses, banks and financial institutions are accelerating their digital strategy and pushing for wider adoption of digital channels for increased utility across services. Many proactive banks are looking to launch digital payment initiatives such as contactless payments and instant card issuance. Regulatory bodies are steadfastly supporting this shift to digital banking to stem the pandemic and make financial transactions safer. Payment services and merchant ecosystems, too, are witnessing a wider adoption worldwide.
Against this backdrop of an accelerated shift towards remote, digital banking, it is vital that financial institutions outline their key business goals and invest in digital initiatives accordingly. However, if you thought that aggressive digital ambitions and a risk appetite lined your path to success, think again. According to Gartner®, “Rookies have high aspirations for their digital initiatives and who take more risks than trailblazers and their investments are tilted toward transformation ”. We believe they are a far cry from savvy trailblazer banks who split their budgets between business transformation and process optimization.
Before we delve into why sometimes aiming lower makes sense as far as digital investments are concerned, let’s take a moment to understand the types of banks based on their digital maturity. As per our understanding, Gartner compared the digital maturity of banks—from the launch of their digital initiatives to when they were able to realize benefits—with the idea of identifying how many were successful in making digital a fundamental part of their business strategy. The investigation identified four distinct clusters, ranging from banks that were “digital aliens” to those who were “savvy trailblazers.”
- At the lower end of the digital spectrum are the Digital Aliens or banks that have the desire to go digital but have not made much progress on the path
- Then there are the Ambitious Rookies that started late on the digital journey, are more inclined to take risks, focus more on transformation, but have challenges in operationalizing digital initiatives and aligning them with business goals.
- Next, come the Fast Followers who are ahead on their digital journey and ready to harvest ROI. While they may have underinvested in tech, they have a robust approach and progress at a competitive speed.
- Topping the digital maturity chart are Savvy Trailblazers. These banks were the pioneers in digital adoption, are ahead of the curve, and already reaping returns. They are focused on optimization, are keen to invest in new-age tech, and consider talent critical to success.
Key Differences between Rookies and Trailblazers
While a well-defined, multi-year roadmap and an integrated strategy are central to becoming future-ready, there are lessons banking CIOs can take when developing their digital strategy by comparing digital rookies with perceptive trailblazers.
As banks continuously reevaluate, reprioritize, and reorient their digital investments, banks will find Gartner recommendations for digital legends and laggards helpful. Discover how some organizations develop successful strategies leading to positive results; download Gartner Lessons in Digital Banking Prioritization From Savvy Trailblazers report now.
Gartner, Lessons in Digital Banking Prioritization From Savvy Trailblazers, 30 April 2020, By Jason Malo
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and is used herein with permission. All rights reserved.