Retail Banking

Retail Banking

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Shifting tides: an iterative approach to transforming our bank branches

A digital world

The world is changing and becoming increasingly digitalised. Companies in the banking industry along with many others need to adapt to these new digital ways in order to reduce the risk of being left behind. Loudhouse, the specialist research division of Octopus Group, conducted a survey which showed that “96% of organisations see digital transformation as important or critical”. It also revealed that over 80% of participants expressed concern of financial and competitive consequences should companies fail to transform digitally within a two year period.

The question is; what does this mean for banks and their drive to compete in the digital world?

Banks in the digital world

Like many other sectors, one of the main challenges faced by the banking industry, is coping with changing consumer expectations. Bank branches are still a vital part of the business, however, it’s about how to best combine the digital aspect with the in-store experience in order to keep up with the digital world; for example, having the option to speed up processes by using self-service screens in store.

Consumers are beginning to appreciate the ability to switch seamlessly across digital platforms, along with access to the most up to date technology, such as contactless cards or mobile payments. In order to further satisfy these consumer needs, large investments are required. However, due to banks having substantial compliance regulations, they have previously prioritised investing more in secure systems over enhancing user experience.

In order to adapt to the digital world, banks need to transform, whether that be new processes, new technology or new ways of working. So how do you test new ideas and have confidence in their benefits and results?

Adapting to the changing environment – testing solution

Capgemini has an iterative approach which is used to prove, disprove and refine solutions in a live environment, typically within a rapid 8-10 week period. Multiple solutions can be tested and iterated, provided there are sufficient controls in place to ensure that the results are collected accurately. The process starts with hypothesis driven analysis; solutions are built and tested against baseline data of current processes in a live yet controlled testing environment.

Using retail banking as an example, solutions that may be tested could be re-engineered branch processes to reduce unnecessary administration or revised levels of internal controls and governance. Aligned to this iterative approach is a heavy focus on continuous improvement, with daily checkpoints to discuss issues and the changes that will be incorporated and tested the next day. A key success of this style of project is that members of staff are empowered to take risks and innovate.

Benefits of this method

A live environment is needed to obtain real results; however, you don’t want to run the risk of endangering the running of the whole business. With this method there is the benefit of still attaining real results as it is not a contrived environment, but as only a contained section is tested, the remainder of the business stays unaffected. It allows solutions to be tested and measured in a controlled yet live environment, therefore helping to develop more robust and replicable solutions, in a speedy manner, where operational improvements are tangible.

It encourages a high level of buy-in from front line staff which can empower teams which is crucial to supporting the embedding of the change. This is helped by staff being released from their standard KPIs in order to allow them to innovate and take full advantage of the approach.

It is this innovation, rapid continuous improvement and risk-taking that is needed in order to truly transform and keep up with the changing digital world

About the author

Eve Alexander
Eve Alexander
Eve is an Associate Consultant within the Capgemini Consulting Business Model Transformation practice. She has worked on projects across Government and Finance, and holds a particular interest in CPR. Alongside her consulting experience, Eve has held roles in finance and research.

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