A Practical Perspective on Bridging the Digital Agility Chasm

Learn practical strategies for traditional banks to enhance digital agility, compete in digital banking, and leverage AI for lasting success.
Philip PazDecember 13, 202317 min

The idea of ‚Äúenhancing digital agility‚ÄĚ is a broad ranging topic that could span from adopting new technologies and business process optimization to a complete transformation of an institution‚Äôs business model. From my practical perspective and that of my digital transformation consultancy, Zennify, our financial services clients continue to seek out agility initiatives based on furthering cloud adoption and defining long term data strategies. Cloud platforms remain the most significant enabler for digital agility and banking institutions are looking to fast track adoption under intense competition.¬†

Digital Agility Helps Banks Compete for New Consumer Loyalty

Feedback from our banking sector clients highlights continued uncertainty around future growth. They are faced with agile competition that is going to market with an increasing set of digital banking capabilities. This creates a chasm effect that is challenging to cross for traditional banking clients’ solutions. While these traditional banks have been focused on loyalty, brick and mortar relationships, many haven‚Äôt evolved their products in a way that matches the technology driven pace of self-servicing and frictionless fintech products; something that the next generation of consumers is demanding.¬†

Traditional product offerings around checking accounts and loans with compartmentalized consumer experiences seem undifferentiated in the market today. Consumers remain frustrated with banking business fragmentation that imposes challenges for consumer processes and digital engagements. New consumers are offered an increasing amount of self-serving and technology enabled options that provide superior customer engagements. AI will continue to stretch this gap with hyper personalized digital experiences. It is not unrealistic to foresee Banking Digital Assistants powered by AI to provide uniquely tailored and individualized banking advice. Banks need to identify and engage with these next generation cloud capabilities to compete.

Defining a Cloud Adoption Strategy is Key to Digital Agility for Banks

Digital Agility for Banks correlates directly with cloud adoption strategies. The importance of a cloud strategy for banks lies in its ability to provide scalability, efficiency, real-time insights, and enhanced customer experiences. Cloud platform advances have significantly enabled both fintech and digital banking modernization efforts. Cloud technology capabilities like Identity Management,  Serverless Computing, No-Code Application options, Data Management and Integration services enable banks to string together products and services quickly to provide enhanced and fully digitized customer experiences with far greater agility than their AS-IS approach. Cloud technology allows banks to scale their operations efficiently and swiftly, which is crucial for growth and adapting to changing customer needs. Those evolving customer expectations represent one of the largest factors in driving agility.

One critical challenge for our banking clients in increasing digital agility is migrating  from legacy solutions to the cloud. From our experience a right sized plan requires a practical perspective on the challenges and opportunities. A challenge might include transferring existing data to the cloud, which may be stored in a variety of formats. A practical plan may include a process to address groupings of data to ensure it complies with regulatory requirements. From there, you can work one group at a time to reduce complexities and ensure data readiness for your agility initiatives. Mitigating these challenges should include investing in a sound change management plan focused on preparing, equipping, and supporting individuals to successfully adopt changes for both business process and technology.

Managing these changes and ensuring that all stakeholders are on board is a key challenge. Organizations might lack the necessary skills and knowledge to manage and operate cloud technologies effectively. These challenges can be mitigated through careful planning, use of proper tools and collaboration with skilled cloud consultants. Our clients that have migrated banking cores to the cloud and leveraged iPaaS cloud integration platforms have benefited greatly from training and education and achieved measurable success in the journey, including increases in both customer and employee satisfaction. 

Banks Are Crossing the Fintech Chasm with Cloud and AI

Many clients that are migrating to the cloud are also exploring ways to engage AI in internal initiatives to continue to close the gap between the differentiated product offerings in the market. Recently we have seen a significant uptick in consulting with advisory services related to the advancement of AI architectures provided by cloud platforms. We are regularly advising on use cases and initiatives to provide secure and private ‚ÄúChat GPT-like‚ÄĚ capabilities with internal data sources without the need for hosting hard to find GPUs.¬†

Unifying AI and digital capabilities for both front and back office operations has the dual benefit of potential cost savings and streamlining the customer experience.

Deriving Value from Your Transformation Initiatives

Working with these clients we focus on forecasting and providing transformational advisory to turn the corner on digital enablement. Once clients settle into their cloud platform of choice, they begin deriving value from three key areas:

  • The pay-as-you-go technology cost provides greater visibility and granularity to cost control measures.¬†
  • Banks that have migrated to the cloud continue to see cloud providers invest in products and services to enable cloud experiences and value add.¬†
  • Banks are able to bring to market solutions at an expedited rate.¬†

We find that digital agility and cloud strategy go hand-in-hand. We find that to navigate this journey it is good to have a sound partner that brings experience to the table; including amongst other disciplines cloud architecture and data strategy experience for your specific sector of business.  For those that are ready to embark on this journey, a few recommendations include:

  • Address common concerns about AI, such as data security and accuracy, to build trust in your AI initiatives.¬†
  • Protect your data and work only with services that demonstrate trust.¬†
  • Leverage tools and services from cloud platforms as they can be helpful in managing your digital agility and AI projects.¬†
  • Identify the areas within your organization where you see the most impact. This could be anything from automating routine tasks, to enhancing decision-making, to improving customer experience.

With a sound plan and the options provided by a growing cloud market, banks are able to close the gap in this highly competitive market of digital banking by forging ahead with the next generation of digital agility cloud product and service offerings.

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https://fintecbuzz.com/wp-content/uploads/2023/12/Philip-Paz.jpg
Philip Paz , Vice-President of Technology, Zennify

As VP of Technology at Zennify, Philip brings 20+ years of technology leadership to Zennify. He keeps the tech and business initiatives aligned by applying his deep knowledge of business strategy, enterprise architecture, data, cloud, and analytics.

Philip Paz

As VP of Technology at Zennify, Philip brings 20+ years of technology leadership to Zennify. He keeps the tech and business initiatives aligned by applying his deep knowledge of business strategy, enterprise architecture, data, cloud, and analytics.

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