As the world becomes increasingly ‘digital-centric’ it becomes clearer just how crucial digital transformation is for all enterprises, especially those based on legacy business models, like banks or insurance companies. Bottom line? Banks must go digital to survive or they won’t make their bottom line.

What is digital transformation specifically?

Digital transformation can be summarized as the integration of digital technology into the workings of a business. The result? Important changes to how financial sector companies operate and how they provide real value to their customers.

The four pillars of successful digital transformation

What drives successful digital transformation? A winning approach tends to be evolutionary and adaptive, and is made up of four key pillars, all of which are interconnected. These are:

  • A unified digital experience
  • Connecting of the digital supply chain
  • Delivering at digital speed and scale
  • Empowering digital innovation

Effects of Covid-19 on digital transformation

Covid-19 brought new urgency for companies to meet their digital transformation goals. In short: they have to hustle! Companies dubbed as digital natives (those who are comfortable with technology and consider it to be an integral part of their lives) can evolve at speeds traditional organizations can’t keep up with.

A slower start for banks in transforming digitally

Traditional financial institutions aren’t always able to just flick a switch and go 100% digital overnight. Banks were built for a pre-digital world and have a long way to go when it comes to digitally transforming – and it starts at the top with C-suite Executives. Digitally savvy top teams lead more effectively. It’s that simple.

Banks need more digital-savvy leaders to transform successfully

For the finance and banking industry to keep up with the pace of digital transformation, leadership must be digitally perceptive, and future ready. Unfortunately, research points out that as few as 23% of CEOs, and 12% of CFOs are regarded as truly digital-savvy. Banking executives need to embrace change to meet the demands of creating a fully digital banking experience for their client base.

Digital performance Vs financial results

When top management in banks are digitally disconnected there’s a chasm between them and their tech-savvy customer base. This causes a lag in the digital banking transformation process, which in turn hinders banks and financial institutions from reaching their desired net margins.

Banks: digital transformation the only answer

Firms led by those who have higher levels of digital awareness financially outshine those who don’t. Fact. An increase in digital savvy leadership means more money. Do the math.

Tell us what you think: are financial institutions suffering off the back of leaders who are not digitally savvy? How will this affect the future of banks? Tell us in the comments below:

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