Digitization is an absolute game changer and will change the financial services industry significantly down the line. In order to utilize and benefit from these new opportunities to maximize customer centricity and achieve the highest levels of process efficiency, the established companies in the financial services industry must initiate changes which will deeply affect the very DNA of their traditional business models. The FinTechs will play no small role in supplying the relevant impulses for developing their business models, and it is becoming increasingly important for the finance industry to come to terms proactively with the FinTechs’ USP.
As a result, on the strategic level it is essential for financial institutions to define the overarching objectives, focal points and the clear strategic thrust of their own digital agenda.
An increasingly vital prerequisite for successful customer acquisition and loyalty will be for companies to think, manage and act across multiple channels. To achieve this, they will need to break away from accessing customers via isolated, stand-alone channels and organizing their businesses based on organizational units with a strict hierarchy which often embodies a silo mentality.
In this context, the optimal structure and utilization of the different “touchpoints” with customers is developing into a critical success factor. In consequence, the cooperation model between the sales channels and operations must also be revamped.
Current digitization initiatives among banks and insurance companies often only deal with partial aspects of the digital world, for example by creating individual products or isolated services and apps. Without a fundamental shift in the process landscapes and architectures towards an integrated, end-to-end digital platform, however, these measures will be unable to unleash their full potential. A digitization strategy which is based directly on the business strategy will help master the integration of the strategic measures and enable institutions to manage them in such a way as to create the maximum benefit for the ongoing development of the business model.
When creating digital sales channels and processing platforms, companies must completely redesign their performance management systems and the underlying cost accounting and financial reporting, too. At the same time, more dynamic business models also need a more agile performance management model. New digital methods based on Big Data approaches and Predictive Analytics can provide valuable contributions to creating adequate performance management within companies.