Why Digital Transformation in Financial Services Doesn’t Happen Overnight

Why Digital Transformation in Financial Services Doesn’t Happen Overnight
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Across every industry, opportunities to turn organization-wide digital transformation into measurable ROI or KPI abound. In fact, as more transformation success stories emerge from companies in all sectors, it’s easy to get the impression that digital change happens as quickly and seamlessly as, say, downloading a new app.

The truth is, though, that digital transformation is driven by a range of interlocking components, both “hard” (such as infrastructure and technology) and “soft” (such as company culture and cross-department collaboration). What’s more, to be sustainable, this transformation needs to happen one careful step at a time.

Financial services institutions provide a case in point. Although Adobe’s 2018 Digital Trends in Financial Services Survey found that more than a third of financial services institutions rank experience optimization as a key priority, a full 30 percent of banks say they haven’t even begun the digital transformation process, or are still in the very early stages.

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One core reason for this discrepancy is what I call “transformation paralysis.” The most common cause of this paralysis is simply the lack of a clear starting point for digital transformation: a specific process that’s relatively easy to digitize, and that delivers clear and immediate ROI once that change takes place.

The enrollment process for accounts, credit cards, loans, and other products is an ideal starting point for digital change.

Successful digital transformation in financial services is as much about people as processes.

Many banks say they’re “in the process” of digital transformation, but this process consists of several stages. For example, some banks now initiate the account enrollment process with a web form or a fillable PDF, but then drop back into the paper world, requiring customers to print out a form, physically sign it, and mail it in.

Even seemingly minor frictions like this can have significant negative consequences. Many customers drop out of the enrollment process the moment they’re faced with a paper form requiring ink signatures. Even more tellingly, a recent Accenture survey revealed that 71 percent of banking customers would switch from their current bank to one that offers fully digital enrollment.

So how do some banks successfully digitize enrollment? The 2018 Digital Trends in Financial Services Survey found that the single most crucial factor is company culture: digital processes must be a priority, from the C-suite down.

In other words, digital transformation in enrollment is at least as much about people as it is about processes. And it starts with a decision maker who clearly recognizes the value of seamless digital enrollment.

The decision to digitize enrollment starts with buy-in from key stakeholders.

Among banks that have successfully digitized enrollment, we’ve noticed two key ingredients. First, digital transformation was successfully sold at the executive level before anyone began implementing changes. And second, stakeholders tackled just one process at a time, and leveraged the ROI of that transformation to sell further use cases.

Selling into a paper-centric culture can be challenging. But surveys have found that by emphasizing digital forms’ enhanced security, built-in compliance with data privacy regulations, and the ease with which they can be integrated into existing systems, decision makers can make a convincing argument for transformation.

For example, Adobe Sign integrates with Microsoft Office 365, which makes the onramping process essentially seamless. Every other department can continue to use the tools and systems they’re accustomed to—except that now, one specific enrollment process will be far faster and easier for customers.

Once the C-suite acknowledges the seamlessness and ROI of e-signatures and digital forms, they’ll begin to back the adoption of new tech, as well as the allocation of resources and team members, to turn those technologies into smoother customer experiences. Once this process is initiated, it’s time to agree on key performance indicators (KPIs), and design a set of benchmarks against which to track them.

A few KPIs will tell you the impact of digitization.

Once a bank has rolled out e-signatures and digital forms for a particular enrollment process, the next step is to track a few simple KPIs. Ideally, leadership will agree on these KPIs prior to rollout. Then, as more customers enjoy the benefits of digital change, stakeholders can take positive data back to the C-suite, and use it to secure backing for digitization of another specific process.

A reduction in turnaround time for loan or credit card applications can tell you a great deal about the success of a digital initiative. For example, one financial institution that recently rolled out Adobe Sign in their enrollment processes reduced their mortgage loan approval period from an average of seven days to just a few minutes. What’s more, they achieved this in just six weeks, across more than 70,000 mortgage transactions.

Another useful KPI is a reduction in paper-related costs, such as printing, faxing, postage—and, of course, transportation and storage for paper itself. For a bank that processes tens of thousands of applications every month, digitization of even a single enrollment funnel can translate to hundreds of thousands of dollars of cost savings every year, just from the elimination of paper expenses alone.

As exciting results come rolling in, it’s crucial to keep the pace of change deliberate, and iterate through one process at a time. Banks that try to roll out too much digital change at once often find that these changes fail to stick—and that C-suite support becomes harder to secure as a result. Institutions that roll out digital change too slowly, on the other hand, may find themselves outpaced by digital-first disruptors.

KPIs and beyond

But once your bank gets into the rhythm of digital transformation, opportunities for optimization are nearly endless. For example, once customer data is unsiloed, a bank can cross-reference that data with insights derived from other digital processes, and present each customer with an omnichannel journey in which every recommendation is relevant to their current needs and aspirations.

From e-signatures to integrated cross-platform strategies, digital transformation has the potential to streamline every aspect of a financial organization’s business. And in one survey after another, we’ve found that digital transformation is a massive financial services customer satisfaction driver—not just in terms of reducing the dropout rate, but also in raising customer happiness across the board.

Even so, it’s important to keep in mind that digital transformation in doesn’t happen overnight. Change takes time—and it’s just as dependent on human collaboration as on technology. Focus on digitizing just one process at a time, and you’ll stand a much greater chance of long-term success.

About the Author

Craig Peasley is a Director of Product Marketing at Document Cloud.

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