Successful digital transformation is necessary to help banks compete with challengers by providing seamless, immersive customer and employee experiences on a single unified platform. To compete, established banks must change everything from legacy systems to institutional culture from the ground up. Yet re-architecting a financial institution’s digital infrastructure around the customer is a complex and labour-intensive process that can be expensive without a comprehensive plan.
As the biggest bank in Africa, Standard Bank’s overall goal was to become a platform business by 2025. This involved creating a fully digitised banking solution; migrating in-branch services to digital; enabling a fully fledged ecommerce capability for digital sales; and ensuring end-to-end fulfilment capabilities. As Group CEO Sim Tshabalala said: “We don’t want to be the shop; we want to be the mall.” However, at that stage the bank had five separate digital touchpoints, leading to low digital penetration and declining market share, due to competition from existing players and new entrants. At the same time, there was a lack of engagement due to overwhelmed relationship managers.
Backbase was chosen as the platform of choice to power their vision and reduce operating costs, including by driving synergies across the different entities and countries. “They’ve done this a lot more often than we have. They’ve got the insight. They come with a bag full of tools, tested, tried. And I think we are also ready then, to leap into new technologies quicker than we would have if we did it on our own”, said Moshima Shongwe, Head: Digital and eCommerce Business Clients, at Standard Bank.
Banks need to understand the scope and size of the digital transformation before embarking on the project, so it is important to spend as much time as possible to identify all the possible pitfalls. Things change and evolve over time, so banks must adapt as they go but “establishing a detailed plan early in the process can save an immense amount of time, money and stress”, noted Heidi Custers, Digital Transformation Director MEA at Backbase. “Anyone who tells you digital transformation is easy is either lying or trying to sell you something”, she added.
Belinda Rathogwa, Head: Digital and eCommerce Consumer & High Net Worth Clients at Standard Bank, commented: “Before you start any initiative, be clear on what it is that you seek to achieve and how you will know when you’ve succeeded. That makes it a lot easier to have that boardroom conversation.”
Importance of preparation
Standard Bank’s metrics for tracking success included three key things: the bank’s net promoter score; 24/7 platform availability and readiness; and security. Transparency is also particularly important because there will be inevitable missteps. It took the bank about six months of dedicated planning time before it actually started work on development. “I wish we had spent more time getting started and preparing and sharpening the axe before we started chopping down the tree… I think we underestimated the amount of complexity that we were walking into”, said Shongwe.
With Backbase, Standard Bank built a single, reliable, easy to use app that improved the client experience with more frequent releases to promote adoption. Throughout the process, it aimed to share as much as possible between teams to reduce costs and increase the speed of delivery. Backbase is also helping Standard Bank Group roll out its digital services across its operations in other African countries.
Both Rathogwa and Shongwe emphasise that it is important to seek guidance and support from industry leading partners with research and development experience throughout the process. “Being able to leverage the strengths that our partners bring, we feel, is a real advantage in being able to serve our clients”, said Rathogwa.
Rathogwa recommends starting now but being patient by focusing on progress over perfection because it is a long process and “changing a way of being takes time”. Getting buy-in from the boardroom can be challenging, but is an essential part of the process. “When you put forward little successes, it gives the team a boost to keep going. But it also gives us, as leadership, signs that we are moving in the right direction”, she said.