Digital transformations – Why technology alone will not transform your bank

Launching and successfully implementing a banking culture change initiative takes time, patience, and commitment. And it’s a journey worth taking.

Amdocs Financial Services

28 Feb 2022

Digital transformations – Why technology alone will not transform your bank

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Without buy-in and commitment from the top of the organization, any culture change initiative will simply sputter and fail.

Everything positive and sustainable that a banking organization will achieve begins with defining the culture it wants to have and then putting into place the changes and values it needs to get there.

Yet, even with this road map many banks fail at culture transformation because they stumble on some avoidable pitfalls. Among them: a lack of leadership buy-in to the whole initiative; misalignment with the company’s overall strategy; thinking of culture as strictly a human resources issue and not a companywide concern; and probably most common of all, insufficient clarity and communication of the benefits of the culture change and why it should matter to employees.

Paul Tidwell, managing director at Projekt202, a division of digital transformation firm Amdocs, says among the most important features of a successful, sustainable banking culture change initiative is "giving employees an underlying belief system that goes beyond any new technology or digital products." Decades of research from the 100 Best Companies to Work for in America show that higher employee satisfaction correlates favorably with greater overall performance of an organization.

Commitment from the top

Beginning this process starts with communication from the C-suite. Without buy-in and commitment from the top of the organization, any culture change initiative will simply sputter and fail. A CEO committed to the plan can also help guard against one of the more painful parts of any transformation: the impact on the organizational chart. "Many people spend a lot of time and personal and political capital building their domains and you’re now asking them to re-evaluate all of it," Tidwell says. "Executives having one-on-one conversations with people who are going to be impacted by these changes is all part of a solid, well thought-out communication plan."

Once senior leadership is on board, the next step is outlining the expected performance, behaviors, and goals for employees at every level of the company.

"Defining how you’re going to communicate and who your target audience is for different aspects of a culture change plan is pretty easy to overlook and pretty hard to do well," Tidwell says.

That’s because without the proper and precise messaging, many employees interpret transformation of any sort as a signal that they’re doing something wrong, or are somehow deficient in their jobs. The right way to frame this undertaking for employees is to make it about the opportunity they have to grow their career and skills portfolio. "Connecting it to the personal benefits that employees will get is how you get buy-in from the beginning," he says.

Understanding customers

Once employees understand their role in a culture transformation, they need to understand how their job and specific duties help to deliver value to banking customers. And the best way to do that is to understand the customer - their needs, pain points, and competitive issues.

Tidwell recalls working with financial services company Charles Schwab to help the company redesign its active trader platform. Many of the managers at Schwab had deep domain experience with the platform and believed that traders wanted financial information served up quickly and neatly so that buy and sell decisions could be made almost automatically.

Rather than simply accept that hypothesis, Tidwell and his team started interviewing customers in their homes, while they were sitting at their trading stations. What he discovered was that, contrary to what the Schwab managers thought, customers didn’t want trading decisions automated. Instead, they wanted a lot of information at their fingertips so that they could them make the trading decisions they felt were best.

"They wanted to feel like a fighter pilot in a cockpit and have all this information coming to them," he says. The goal wasn’t to make decisions for the traders, but to give them a lot of information in a way that allowed them to synthesize it all and make the trading calls themselves.

"Getting employees out into the field to see customers and hear them first-hand gives them a sense of ownership about all this and continues to get the flywheel of culture going," Tidwell adds.

Agile thinking

Having accurate, actionable customer data is essential, but it’s not enough. What makes culture change sustainable is giving employees access to these customer insights so they can come up with solutions. A culture of "fail fast, learn fast" allows employees to test different ideas, iterate, and start again. It’s the process of making small, incremental changes that leads to better outcomes and also get employees invested in and connected to customers in real, quantifiable ways.

Another essential element in any banking culture change environment is creating room for learning. By retraining employees to be digital-first, the tools that drive change throughout the bank are adopted and the entire workforce understands how to leverage technology in ways that best serve the customer.

This isn’t about throwing every new advanced technology into the mix, warns Tidwell. But rather thoughtfully rolling out new digital technology tools (think machine learning and artificial intelligence) that enable employees to achieve better productivity while becoming customer-centric at the same time.

There’s little argument: changing a bank’s culture is hard. But by taking the time to create a robust communication plan, gathering accurate customer research, and tying the customer experience to the employee experience, banking organizations can truly evolve. Technology alone won’t transform a bank. But by leveraging technology to create new ways of working—with the customer at the center—banks can empower employees to create a sustainable culture shift.


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