Banking on Digital

Transformation
Financial Services Modernization from the Inside Out
Summary

The pace of digital transformation has customer, and the customer has already
reached a critical point for banks and gone digital. Banks require a digital
other financial institutions. Traditional transformation strategy that addresses
organizations now face unprecedented three factors:
competition from a variety of new
entrants. These disrupters include Overcoming complacency by
making a cultural shift
FinTechs, digital-only “challenger
banks,” internet giants like Google,
Focusing on user experience and
Amazon, Facebook, and Apple, and the customer journey
even fledgling and future start-ups.
Banks are now playing a game of catch- Improving the digital skills of the
up-and a surprising majority of them are organization from within
still on the bench.
This white paper examines the current
Mindset is a significant factor. The state of digital transformation in
centuries-old assumption that people banking, provides insights and advice
place the most financial trust in a solid for convincing stakeholders of the
edifice with human tellers a vault is need to shift and outlines a strategy for
fading away. At the center of the future quickly developing an institution’s digital
of banking is not the bank but the capabilities.

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Table of Contents

Today’s Digital Banking Landscape 4

How Ready are Financial Institutions? 6

Key to Unlocking Digital Transformation 8

It’s Time for Banks to Become Agile 10

Focusing on the Customer Experience 12

Getting Moving with Mobile Banking 15

Real Integration with Artificial Intelligence 16

Branching Out: Exclusive Bank Advantage 18

Digital Transformation in Action 20

Digital Transformation Begins with People 22

Strategy for Digital Success 25

About Simplilearn 27

Endnotes 28

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Today’s Digital Banking
Landscape

The 20th century model of banking is Fiserv, “More than half (55 percent) of
headed for extinction. Long holding people would be comfortable using a
their place at the top of the food chain, technology company, such as Apple or
brick-and-mortar banks are quickly Google, for various types of financial
losing ground. Customers are flocking transactions.” 1
to alternatives made possible via secure
internet and mobile technologies. Younger generations are especially
comfortable with non-bank alternatives
“For a long time, banks have behaved for moving money. Research from
like virtual monopolies. The whole Raddon shows that 44 percent of Gen
assumption is that customers don’t have Z (the generation born after 2000)
a choice,” says Jaspreet Bindra, Digital anticipate supplementing traditional
Advisor to the Mahindra Group and banking services with solutions from
International Data Corporation (IDC). technology companies. 2 “Millennials
“What has happened in the past few have very specific ways that they like
years is that customers certainly have to bank, and want options in banking
lots of choices now, without the bloated services and communication channels,”
cost structures that used to exist.” notes Jeffry Pilcher, CEO/President of
The Financial Brand. “They’re also much
As more consumers gravitate to more likely to switch banks when their
the convenience and familiarity needs aren’t met.”3 In fact, more than
of ecommerce, tech giants, and half of all Millennials would switch to
mobile apps, they’re gaining trust in another provider for no reason other
unconventional sources for financial than if it offered a better digital banking
matters. According to a survey by app, warns BAI.4

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Leading technology and ecommerce transformed basic banking functions,
companies have become so good at like opening a new account. "The vast
digital engagement, a 2018 report by majority of financial institutions far
Deloitte says, “Many consumers now underestimate the scope of what is
have a stronger emotional connection needed to become a ‘digital bank,'"
with these brands than they have with warns Jim Marous in The Financial
their primary banks.” This emotional
5
Brand. “More concerning in the short-
and even habitual connection gives such term is that most organizations are not
companies an enormous advantage yet delivering the basic components of
when it comes to the cost of customer a digital organization.” 10
acquisition compared to other firms.

Globally, digital disruption is

shaving 30 percent off incumbent
revenue growth.
McKinsey Global Institute6

The need for digital transformation is As banks continue to mull over the steps
no secret to financial executives. The they need to transform; their customers
2016 World Retail Banking Report have already embraced digital modes.
revealed that 96 percent of bankers A Harris Poll conducted on behalf of
agree that the industry’s ecosystem is Fiserv shows that more than half
going digital-but most admit that their (56 percent) of consumers prefer to
core systems simply can't support it. 8
interact with their financial organizations
According to the Adobe Net Finance via digital, compared to 34 percent
report, “Financial services are lagging who prefer branch interactions.11 While
in their pursuit of digital maturity, with bank branches are still the preferred
85 percent saying that they are halfway method for certain financial interactions
there or further behind.” 9
like opening a new checking account,
the average American bank customer
The 2019 Retail Banking Trends and now visits a branch (or even uses a call
Predictions report notes that only one- center) less than once per month-about
third of organizations have digitally half as often as in 2011.12

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How Ready are Financial
Institutions?

To keep up with disruption, financial old habits, and new regulatory

institutions must act strategically, quickly, requirements slow their efforts.” 13
and comprehensively-and do more than
just provide stop-gap digital solutions. While some digital services already
This has not been the case for most. seem ubiquitous for financial institutions,
including online banking and even mobile
“The banks have long neglected apps, to succeed at digital transformation
digitizing their value chain,” says requires a more comprehensive approach
economist Anand Swaminathan. than just adding piecemeal features.
“Overworked and bloated IT systems,

Until now, most banks and credit

unions have simply put a nice
veneer on legacy systems and
products, ignoring many of the
internal changes that are needed
to compete effectively with
smaller FinTech and big tech
organizations.
Jim Marous, Publisher, The Digital Banking Report10

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How far behind is the banking industry
today? Organizations surveyed in

58%
the 2019 Retail Banking Trends and
Predictions report said that only half
have a strategy in place for digital
transformation. Another 28 percent
10

stated that while they have a strategy, 58 percent of the top 50 global
it has not been implemented. Only banks already view digital
7 percent thought they were well- transformation as “extremely
prepared for digital transformation. important” according to the F
 IS
2018 PACE Bank Executive S
 tudy.14
Some smaller banks and credit unions
may be taking a wait-and-see approach
or considering partnering with third-party
technology vendors. However, Keith
Nolan, FIS Vice President of Credit Unions
& Associations, says there's no time like
the present to invest in a digital model
that enables credit unions to keep up
38%
with current and upcoming innovations, Smaller, and other types of
especially in the technologies of mobile financial institutions seem to p
 lace
and customer experience. "The success a lower priority on transitioning.
of the credit union movement is built on Only 38 percent of credit union
putting members first by offering very executives interviewed saw digital
personalized customer service," advises transformation as imperative.
Nolan. "But members are getting younger,
and their needs are changing."14

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Key to Unlocking
Digital Transformation:
Culture Change

In any organization, digital maturity and Strategy at U.S. Bank Wealth

requires more than adopting new Management. “Legacy systems and
technologies. It’s disruptive. It requires processes that were once effective
a well-coordinated shift in the people result in leaders and workers to suffer
and the processes around those new not only from complacency but also
technologies. To unite internal teams active conservatism, both of which
and align communication, collaboration, hinder innovation.”
and processes, this kind of sweeping
cultural change can't come from In an Adobe Net Finance survey of
the bottom. It has to come from financial services companies, 43
the top. This is especially true—and percent of bankers said that executive
problematic—in the financial industry. sponsorship is essential for moving
toward successful digital transformation.
“The biggest barrier to digital As the report indicates, “Organizational
transformation in banking is corporate alignment and company culture are just
culture,” says Jennifer Borchardt, as important to digital transformation as
Director of Omnichannel Experience new technology platforms.”9

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Like a massive ship changing course, foundation,” says Rosilyn Houston,
this organizational realignment requires BBVA Compass Executive Director of
a clear vision from above to coordinate Talent & Culture. “This change must be
power and to steer from below. It a commitment driven top-down, and a
takes more than executive buy-in. It clearly articulated strategic priority.” She
takes management evangelism and explains this organizational commitment
communication to share that mission. includes budget dollars for technology
funding, talent development, developing
“To drive a digital mindset throughout a agile workflows, and a willingness to
traditional bank takes a cultural change take risks allocated against it.16
that could shake the organization’s

DIGITAL
capabilitie s
are critical
to our
BUSINESS.

Nolan

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It’s Time for Banks to
Become Agile

While traditional banking organizations Possibly more importantly, this

have had the advantage until now, the transformation requires a cultural
playing field has already shifted in favor adjustment and mindset shift in
of technology companies. To maintain application development and data
and extend their competitiveness, flows.” 10
financial institutions must adopt and
gain expertise in the same tools, skills, Many experts say that adopting
and methodologies that technology a delivery mindset and process
companies use. is a necessary step for financial
services companies to succeed and
“Digital transformation is not easy. It continuously adapt in tomorrow’s
requires a shift from legacy IT systems highly-competitive digital space. As
and traditional business models towards U.S. Bank’s Jennifer Borchardt says,
integrated, agile, customer-centric "A key agent for digital transformation
processes,” warns Jim Marous in The in banking is for these organizations
Financial Brand. to embrace agile methodology-not
only in software product development,
where the process is well-known but
also throughout the entire organization
Possibly more to deliver business objectives faster
and better." Agile principles enable
importantly, this companies to follow a clear, data-driven
transformation requires approach and constantly test and learn.

a cultural adjustment Agile development refers to

and mindset shift in methodologies in which products

are built incrementally rather than
application development delivered all at once at the end. This
way, if problems occur or changes are
and data flows .”10 needed anywhere along the line, they

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can be addressed sooner and with Agile enables banks to simultaneously
less impact than having to scrap and harness the competencies of their
rebuild a finished project from the very employees while addressing the
beginning. immediate needs of customers. This
enables the organization to propel
Even though agile has been common customer-focused products, interfaces,
in Silicon Valley tech firms since the and apps faster than ever before.
early 2000s, many banks are only
now adopting the methodology. This “Agile teams focus on delivering a
is possible with banking’s evolution minimum viable product (MVP) in
away from aged core systems written in weeks, testing it and getting customer
languages that aren’t agile friendly. "As input, and then quickly refining the
time moves on and legacy systems are MVP,” explains Kenan Rodrigues, J.P.
replaced by new platforms built in more Morgan Chase Bank’s Head of Business
current languages, the opportunity Transformation. “The agile approach
to try agile methods of software focuses squarely on the customer and
development start opening up,” says delivers value early and often.”20
James O'Neill, senior analyst at Celent.18
“With Agile, our entire organization will
One financial institution that has be working on and delivering solutions
committed itself to agile processes to the market in a continuous manner…
is BBVA Compass. Currently, nearly and adapting them as often as needed
60 percent of the bank's software is to meet customer needs,” says BBVA
currently being developed using agile Compass Executive Director of Talent
format. "A major project at the bank & Culture Rosilyn Houston. “Agile
can take an average of two years to development is a shift for the entire
complete when done under a waterfall organization, which will propel the
or fixed work model," says Adriana teams to build solutions for their internal
Quevedo-Price, BBVA Compass’ and external clients not based on what
Executive Director of Agile. “But they think the client needs, but based on
working in an agile or adaptive manner real and ongoing feedback within each
can reduce that timeframe down to six development cycle.” 16
months or less.” 19

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Focusing on the Customer
Experience

Beyond updating legacy systems and Unfortunately, the majority of financial

creating digital channels to supplement organizations are still slow in developing
their branch interactions, financial their UX capabilities. In 2018, only
institutions have both an imperative-and 42 percent of surveyed banks said they
a uniquely advantageous opportunity-to have the capability to control their
harness digital transformation to enable, customers' end-to-end user experience
improve, and guide their customer/ fully, and only ten percent currently
member journeys. offer a full digital wallet. Small and
mid-tier banks are the most at risk from
Technology companies have built disruption, especially from giants in their
themselves around providing a superior own industry.9
user experience (UX), striving to
provide easy, intuitive, and consistent
access and usability in everything they
do. It’s not just about the interface. In For the first time ever,
order to compete with high-tech and
e-commerce giants, financial institutions
the largest six banks
must follow suit and provide the same had taken the lead in
digital ease of use that people enjoy
in their online and mobile interactions. customer satisfaction,
“Consumers bring their expectations largely through better
for easy, fast and intuitive experiences
into everything they do,” says Brenda customer-facing
Waggoner of Fiserv. "Ultimately, technology.”21
traditional banks and credit unions
don't really compete against retail,
technology, payments, and social media
companies. Instead, financial institutions
are up against every digital experience
people encounter.” 1

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As the J.D. Power's 2016 U.S. Retail A 2015 Bain & Company study of
Banking Customer Satisfaction Study customer behavior and loyalty in retail
found, “For the first time ever, the banking shows that by enhancing
largest six banks had taken the lead in their digital offerings focused on
customer satisfaction, largely through improving customer experience, such
better customer-facing technology.” 21
as through mobile banking and wealth
The study reports that digital-only management apps, financial institutions
customers now account for nearly of any size can gain a competitive
30 percent of retail bank clientele. advantage. “Chase has steadily
However, despite this growth, customer progressed in loyalty rankings relative to
satisfaction is more tenuous than ever. regional banks, in part by developing a
Digital-only customers are the least distinctive mobile experience,” says Jim
satisfied among all customer segments, Marous in The Financial Brand. “It’s not
according to J.D. Power. 22
just a matter of size but also focus,” he
continues. “Smaller banks, with a digital
The digital experience matters, focus, like the one-branch, direct bank
especially to younger consumers. USAA, are better positioned for success
According to Fiserv, "Younger and in the digital age.”21
more affluent consumers seem to have
fewer issues going somewhere other When it comes to data, financial
than a financial institution to find the institutions have an advantage over
technology, flexibility, convenience, and FinTechs and other alternative players.
ease-of-use they want and expect." 1
Banks are uniquely positioned to provide

53% of wealth management clients

view digital as #1 factor influencing
their client service experience.
JP Morgan Chase Bank15

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the superior personalization necessary Today’s digital consumers are used to a
that can make a good customer frictionless process in their purchasing
experience great. That's thanks to the journey, and they expect the same from
big data they have on hand from their their financial institution. Digitizing
customer interactions and years of financial services processes—including
transactional records mandated for virtually all back-office functions and
regulatory and insurance compliance. customer communications—enables
faster transactions and hyper-
“The challenge is knowing how personalized interactions. In addition
to translate that information into to saving money through streamlined
meaningful insights,” says Falk Rieker, in processing, this frees up staff for more
Digitalist. “Big Data provides significant valuable tasks like cross-selling and
opportunities for banks to outshine relationship building.
their competition.”23 The solution lies
in moving the data onto a secure cloud While the most value comes from
platform, where machine learning digitizing the entire customer journey,
and other tools can be used to gain digital transformation doesn’t have
a complete view of every customer to be comprehensive from the start.
and develop elements for detailed The Boston Consulting Group (BCG)
personalization and discover patterns recommends focusing first on processes
that enable future predictions that that will have the greatest impact
create value, enhance the customer on the banking experience, such as
experience, and improve the services speeding interactions. Discover the
banks offer. biggest pain points by digging into
transaction histories, call center logs,
"While disruption can be disconcerting, and other online data. “One large bank
our advice is to embrace it,” says Pat redesigned its credit lending journey
Reetz, Fiserv's Senior Vice President and cut the timeframe from application
of Product Management for Bank to funding in half, shaving 30 percent in
Solutions. "Yes, offer innovative costs associated with the process,” said
products and services but differentiate reported BCG in The Financial Brand.
with personal attention, data-driven “Financial institutions that digitize the
recommendations, and relationship- most important consumer journeys can
building interactions."1 increase revenues up to 20 percent and
reduce costs by up to 25 percent. 24

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Getting Moving with Mobile
Banking

Mobile is an essential channel for of bank customers regularly use

financial institutions to provide for mobile banking. 25 As the segment
their clientele and take advantage of of consumers, that's digital native or
themselves. Because many consumers becoming tech-enabled continues to
have near-constant access to their grow; mobile banking is becoming
smartphones, they can access current more crucial for customer engagement
information at any time to answer their and satisfaction. "Customers who are
questions or influence their financial frequent users of their bank's mobile
decisions. They can also receive advice, app (at least once a week) are more
real-time prompts (like balance satisfied with their bank and will
reminders) or even financial recommend that bank to others-
coaching that help them make 78 percent say they are very likely to
smarter financial behaviors, or recommend," reports Jeffry Pilcher
immediate alerts in case of based on a FICO study. "Those who
fraud or other circumstances don't use their institution's mobile apps
via text. Mobile pay is also are twice as likely to be dissatisfied and
quickly becoming a not recommend that bank."3
more desired and
commonplace Because of the ubiquity of smartphones
option for retail across all demographics and income
purchases. levels, mobile banking can even help
financial organizations reach and serve
A 2019 Federal a large consumer population (more
Reserve Bank than a quarter of the US, 26.9 percent)
survey shows that has been traditionally exlusive: the
that 43 percent unbanked and the underbanked. 26

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Real Integration with
Artificial Intelligence

AI-driven predictive banking is another financial services," such as using AI for

innovative trend for 2019. Thanks to automated loan decisions, notes Fiserv. 28
the recent ability to consolidate all
internal and external data, machine In 2019, Capital One introduced the
learning algorithms will be able to AI-driven Eno® automated banking
build predictive profiles of customers assistant. 29 This 24/7 application
and members in real time. “By moving automatically sends customers useful
from a rear-view-mirror perspective of insights, alerts regarding their credit
customer communication to services card accounts (such as unusual activity),
deployed by robo-advisors and AI- as well as getting immediate answers via
driven chatbots,” as Jim Marous predicts text (SMS) interaction. It even provides
in The Financial Brand. “Financial unique, single-use account numbers
institutions will provide consumers with allowing online shopping without
value through ‘next-best actions’ as exposing the actual credit card number.
opposed to blind selling of products.”27
AI and machine learning can also
One way that digital transformation can improve customer relationship
improve banking is to help consumers management, enable automated media
take charge of their own journeys by listening (to instant address complaints
navigating more tasks without the posted on Twitter or other channels),
assistance of human interaction, either and improve marketing automation.
through call centers or in the branch.
Artificial intelligence (AI) makes this
possible. “The first wave of bots,
machine learning, robotic process
automation and natural machine
language is being incorporated into

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All this is possible due to the great Leveraging AI and data-driven insights
democratization of data that AI and apps, banks and credit unions can
technologies break free from former anticipate and engage consumers at
silos. These technologies automatically multiple and relevant points in their
explore, cluster, and harness user lives, such as offering advice on saving
consumer from all sources, both for retirement, borrowing for a major
structured and unstructured, internal home project, improving investments, or
and external, including financial determining the best rates for the most
transactions, representative interactions, appropriate financial instruments. For
website journeys, and other behavior. example, a McKinsey report describes an
Predictive data analytics helps banks augmented-reality (AR) app created by
and credit unions actually know their Commonwealth Bank in Australia (CBA)
customers better-and thoughtfully lets users point their smartphone’s
provide contextual and timely financial camera at a property and instantly see
guidance at crucial moments. This its current price and sales history. 31
unprecedented level of personalization
in wealth management greatly improves The same technologies also enable
consumer interactions, satisfaction, and organizations to help themselves. By
loyalty. quickly analyzing innumerable sources
of financial, customer/member, and
“It may at first glance seem counter- other data, AI can also enable critical
intuitive that customers will feel that back-office processes such as instant
they are treated more like individuals, borrower approval, project evaluation,
as more and more of their data loan processing, and funding, and
becomes aggregated and processed by protect against both credit fraud and
machines,” notes Bernard Marr, futurist, loan default.
and strategic business & technology
advisor. “But the philosophy is that At its core, AI enables (and requires)
smarter machines which can ‘know’ a departure from traditional operating
customers better will make customers models-so banks and credit unions can
feel as if they have returned to an earlier develop real-time, hyper-personalized
age, when they would expect personal financial products and services. As Jim
service from a bank manager who would Marous says, “This movement calls for
know their name, and understand what leveraging new technologies to create
is important to them.”30 more frictionless ways of interacting and
transacting.” 10

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Branching Out:
Exclusive Bank Advantage

Although branch visits have currently Despite the speed and convenience of
dipped to an average of once per online and mobile interactions, many
month, the deathblow of brick-and- consumers still value being able to meet
mortar banking is a myth. In fact, in- with a human to resolve any issues
branch banking can provide a major that may arise. According to research
competitive edge for traditional banks by Deloitte, 64 percent of boomers,
and credit unions over FinTechs. 54 percent of Gen Xers, 48 percent of
According to a study by the consulting millennials, and 56 percent of Gen Z
firm Novantas, half of U.S. customers consumers surveyed said they prefer
feel that online-only banks are “less to visit branches when opening a new
legitimate” than financial institutions checking account. 33
with branches. 32

Boo
me
4% % rs
6 54
%
48 6% G
5 M
en

i
Xe
lle

rs
nn
ials
Gen Z

Research by
Deloitte

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“Most people think Millennials don’t who exclusively used online or mobile
care about branches, that they only banking channels,” reports J.D. Power.
care about digital,” observes Karl “The segment with the highest level of
Dahlgren, Managing Director at BAI. overall satisfaction is branch-dependent
“But branches rank highly with them.”34 digital customers, the group that used
Today’s consumers have the expectation the branch two or more times in the
that as new digital channels become past three months and also used online
introduced, old conventional one ones or mobile banking.”22
will continue to remain available.
Deloitte recommends that financial
Customers gravitate to “attentive institutions invest in developing
and empathetic human interaction their branch talent in using digital
by frontline staff during the account capabilities. “As digital simplifies
opening process,” says Deloitte. 33
One- the banking experience in branches,
third of the customers surveyed would banks should continue to focus branch
prefer using branches more if banks workforce training on ensuring high-
offered certain digital capabilities that quality interactions with customers and
would enhance convenience (like self- creating positive moments that matter.”33
service digital kiosks in branches and The Deloitte report illustrates that BBVA
even 24/7 virtual video meetings with a Compass trains and certifies its frontline
bank representative). staff in the technologies they need to
interact with customers.
Blending digital and human interaction
seems to be the key to satisfaction
and loyalty. “Overall satisfaction is
lowest among retail bank customers

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Digital Transformation in
Action

When a global, top-20 bank approached senior executives to create a sense of

Simplilearn to help it with its digital urgency and a shared purpose.
transformation, they focused on several
key components: migrating to the cloud, Then, subject matter experts (SMEs)
better utilization of customer data, and members of each functional team
digital marketing, and agile product went deep, utilizing Simplilearn’s blended
development. Simplilearn created learning approach including eLearning,
a tailored, Digital Transformation live virtual classrooms, industry-
Academy that immediately engaged relevant projects and labs, teacher’s
employees at every level of the assistants, and mentorship sessions.
organization. All participants took a Each level of the company participated
core set of introductory courses. This in tailored learning material to best fulfill
created a common language, and their role in the organization’s digital
baseline understanding from the C-suite transformation.
to individual contributors and allowed

Our Approach
Digital
Platforms

Digital Trust

Agile Teams

Intelligent
Automation

CxO’s Executives Senior Managers Practitioners

Industry aligned live classes with industry experts Self paced eLearning

Live virtual mentorship with industry leader Real world projects

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Over 1,000 employees have completed successes - in cloud migration and agile
the program thus far, with more entering adoption. The organization is continuing
the academy each quarter. By investing to invest in their digital transformation
in a multi-year training program with by soon encouraging employees to take
Simplilearn, the bank gained early up Artificial Intelligence and Machine
momentum and generated quick Learning courses.

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Digital Transformation Begins
with People

Upgrades in the technologies and embrace effectively the change,” says

processes of banking are useless if the The Banking Exchange. “[This includes]
people behind them aren’t upgraded retraining or on-boarding employees in
and upskilled at the same time. “For new technologies and equipping them
incumbent financial institutions, the with the skills they will need as this
biggest hurdles relate to organization digital world evolves.”36
and skills as much as investing
in technology at scale,” advises According to a 2017 estimate by
McKinsey. 35 McKinsey, approximately 30 percent of
the work currently done at banks will
Digitizing core business processes be handled by intelligent automation
requires new organizational structures by 2020. 37 This will have a great impact
as well as internal talent. “The most on the financial industry workforce,
successful organizations will bring in requiring roles and skills to be more fluid
fresh thinking and technology partners and employees and managers to be
that help the organization take on and more agile.

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 Half of our 97,000 employees can
be automated and displaced by AI.
John Cryan, CEO, Deutsche Bank 38

Banks and credit unions recognize cost and market pressures. As Earnst
that they desperately need IT talent. & Young report, "There is going to be
A recent Capgemini study found that digitization of the workforce in a way
banking is the industry with the widest we have never seen before. In 10 years,
gap in digital talent: 62 percent—that’s a probably less, we will have substantially
greater gap than in retail, insurance, or fewer employees, and the ones we do
utilities. 39 A Peak 10 survey reported that have will be significantly different from
more than three-quarters (76 percent) what we have now."41
of financial institutions have created
new IT roles, but they are having a hard With the unpredictability of emerging
time finding the IT talent they need, with technologies, as well as the introduction
half saying that hiring new staff is either of simpler tools for automation,
"difficult" or "very difficult." In addition the most promising focus of skills
to the high salaries new IT candidates training seems to be in agile, data, and
expect, the image of banking as being cloud technologies.42 Most banking
less innovative than other industries professionals will need only a cursory
makes it less attractive.40 This disparity level understanding of the core
is putting more of the focus on skills math and science of AI and machine
acquisition for existing team members. learning, but a deep understanding
of the concepts and toolsets of cloud
Retraining of current employees is now environments.
an essential aspect of this digital shift,
making incumbent human capital an Capital One, one of the nation's 10
even more crucial investment. One largest banks, committed to reshaping
EY survey participant said, "We will themselves to operate internally more
retrain 60–70% of our workforce." Some like a tech company than a bank. This
banking HR leaders are skeptical of included taking a "cloud first" approach,
their firms' ability to swiftly conduct making it the core foundation of their
upskilling efforts while under significant modernization, building apps and

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migrating all legacy systems and data We’ve trained hundreds of people on
into a single cloud environment using how to use data, how to leverage data.”44
Amazon's AWS. "The recognition
that we needed to be a different kind Another organization that has
of company happened,” says Rob successfully digitized from the inside
Alexander, CIO of Capital One. “It is out is Citizens Bank. They made it a
an enormous change...There's a lot of priority to invest in new technologies
learning that happens along the way.”43 while still investing in their employees.
John Woods, Citizens Bank EVP and
Piyush Gupta, CEO of DBS Bank of CFO, says that having the right training
Singapore ($394.7 billion), says that programs in place is key. For example,
digital transformation boils down to two since 2016, they’ve trained more than
big things: training and experimenting. 1,000 employees in agile methodologies.
“You’ve got to create an environment “Success requires reshaping workforce
where you teach people, and you give skills and careers and making important
people the ability to get their hands investments in areas such as design
dirty-learning by doing.” When asked thinking and leadership development,”
where DBS Bank of Singapore found the explains Woods. “[Citizens Bank] has
expertise to do this, Gupta said, “Almost developed a multi-year plan to reshape
all internally. We’ve developed an in- and retool our workforce...redirecting
house capability [with] data scientists. many members of the current workforce
Across the board, we have trained our into roles that help set us up for the
people to think “data first” and think future.”45
about how to be a data-driven company.

24 | www.simplilearn.com
Strategy for Digital Success

Financial institutions, especially mid- remaining valued touchpoints. To

size and small banks under $50 billion, keep this competitive edge from being
cannot afford to take a wait-and-see overridden by FinTechs and other
approach. Banks and credit unions alternatives, a traditional banking
are holding onto a tenuous consumer organization must digitally transform
advantage, with physical branches, and innovate immediately.
live advisors, and industry reputation

Four out of five financial

institutions believe that digital will
fundamentally change banking
and completely transform the
industry's competitive
landscape.”
The Boston Consulting Group

25 | www.simplilearn.com
"Banks and credit unions are under The good news is that banks don’t
pressure to function more like FinTechs have to accomplish everything at once.
or face an erosion of market share," “In our experience, the most effective
said John Macaluso, SVP of Business route is to develop a clear view of which
Development, Bank Solutions at Fiserv. capabilities can deliver the most value
"As digital capabilities take center quickly and power a broader digital
stage, financial institutions are turning transformation,” says a McKinsey report
their focus from simply facilitating on digital banking. “The important
transactions to playing a greater thing is to get going, to act with a sense
advisory role in peoples' lives." 28
of urgency—like an attacker seeking
growth, not merely a defender hoping
to hold onto a legacy position."31

The proven strategy for digital transformation in banking

requires that organizations:

Embrace a top-down cultural shift

Become agile throughout IT and other business units

Focus enhancing and personalizing consumer journeys

Invest in workforce upskilling, especially in cloud and big data

26 | www.simplilearn.com
About Simplilearn

Simplilearn enables professionals and 1,000 companies across 150 countries

enterprises to succeed in the fast- get trained, acquire certifications and
changing digital economy. The company reach their business and career goals.
provides outcome-based online The company’s high-engagement
training across digital technologies curriculum blends self-paced online
and applications such as Big Data, learning, instructor-led live virtual
Machine Learning, AI, Cloud Computing, classrooms, hands-on projects, student
Cyber Security, Digital Marketing, and collaboration, and 24/7 global teaching
other emerging technologies. Based assistance. Simplilearn is a GSA IT-70
in San Francisco, CA, Raleigh, NC and contract holder and was recognized by
Bangalore, India; Simplilearn has helped Training Industry as a Top 20 Online
more than one million professionals and Learning Library Company of 2018.

For more information, visit

www.simplilearn.com

27 | www.simplilearn.com
Endnotes

1. Waggoner, Brenda. “Banking on 7. “Consumer/retail banking: digital

Experience: Financial institutions transformation, optimization and
focus on digital engagement as new digitization”. I-scoop.com, accessed
providers gain ground”. Fiserv.com, May 28, 2019.
Oct 18, 2018.
8. World Retail Banking Report 20.
2. “Research on Gen Z Reveals Capgemini, 2016.
Financial Savvy, Banking Opinions”.
9. Net Finance: The Journey to Digital
Raddon (Fiserv), Nov 6, 2017.
Maturity. Adobe, 2014.
3. Pilcher, Jeffry. “9 Insights For
10. Marous, Jim. “Major Storm Clouds
Lasting Banking Relationships with
On The Digital Banking Horizon”.
Millennials”. The Financial Brand,
The Financial Brand, Jan 14, 2019.
Aug 12, 2014.
11. 2018 Expectations & Experiences:
4. Cocheo, Steve. “Banking on
Channels and New Entrants. Fiserv,
Millennials: Balancing Branch
2019.
Preferences And Digital
Expectations”. The Financial Brand, 12. McCarthy, Niall. “Banking Customers
Oct 2, 2018. Are Increasingly Going Digital”.
Forbes, Nov 3, 2015.
5. Srinivas, Val and Angus Ross.
“Accelerating digital transformation 13. Swaminathan, Anand and Juergen
in banking: Findings from the global Meffet. Digital @ Scale: The
consumer survey on digital banking”. Playbook You Need to Transform
Deloitte, Oct 9, 2018. Your Company. Wiley, Jun 2017.

6. Bughin, Jacques and Nicolas van 14. Nolan, Keith. “Digital transformation
Zeebroeck. “The best response slowly taking hold in many U.S.
to digital disruption”. MIT Sloan credit unions”. Bankless Times, Sep
Management Review, May 9, 2017. 26, 2018.

28 | www.simplilearn.com
15. J.P. Morgan Chase (JPM) Investor 24. “The Four Pillars of Digital
Presentation - Slideshow. JPMorgan Transformation in Banking”. The
Chase & Co., Feb 28, 2018. Financial Brand, Mar 27, 2018.

16. Anderson, Christina. Path to digital 25. Consumers and Mobile Financial
transformation series: Pillar 4 - Build Services 2016. Board of Governors
a digital driven organization. BBVA. of the Federal Reserve System, Mar
com, Aug 24, 2018. 2016.

17. Rogers, Bruce. “Why 84% 26. Barry, Erin. “25% of US households
Of Companies Fail At Digital are either unbanked or
Transformation”. Forbes, Jan 7, 2016. underbanked”. CNBC.com, Mar 9,
2019.
18. Crosman, Penny. “Agile Development
Is Reshaping Tech at Banks Like 27. Marous, Jim. “Five Innovation Trends
Chase and BBVA”. American Banker, That Will Define Banking in 2019”.
Apr 5, 2016. The Financial Brand, Dec 3, 2018.

19. Grimble, Tristan. “Agile working 28. Waggoner, Brenda. “2019 Trends:
creates opportunities for BBVA Navigating the Retail Banking
Compass in U.S. market”. BBVA.com, Transformation”. Fiserv.com, Jan 15,
Jun 22, 2017. 2019.

20. Rodrigues, Kenan. Building an Agile 29. “Eno automatically sends useful
Business. J.P. Morgan Chase, Aug 3, insights and alerts about your credit
2018. card accounts”. Capitalone.com/
applications/eno, accessed May 1,
21. Marous, Jim. “The Digital Divide:
2019.
Can Small Banks Keep Pace?” The
Financial Brand, Feb 10, 2016. 30. Marr, Bernard. “The Amazing Ways
TD Bank, Canada’s Second-Largest
22. “Retail Bank Customer Satisfaction
Bank, Uses Big Data, AI & Machine
Strained by Growth of Digital-Only
Learning”. LinkedIn.com, Jan 9, 2019.
Segment, J.D. Power Finds”. J.D.
Power, April 26, 2018. 31. Khanna, Somesh and Heitor Martins.
“Six digital growth strategies for
23. Rieker, Falk. “Embracing Digital
banks”. McKinsey, Apr 2018.
Transformation: The Future Of
Banking”. Digitalist, Feb 21, 2018.

29 | www.simplilearn.com
32. Henry, David. “Americans prefer 39. The Digital Talent Gap: Are
bank branches over mobile apps for Companies Doing Enough?
opening new accounts”. Reuters, Capgemini, 2017.
Feb 21, 2018.
40. Kyriazi, Christina. The Peak 10
33. Srinivas, Val and Richa Wadhwani. Financial Services and IT Study.
“Recognizing the value of bank Peak10.com, 2017.
branches in a digital world: Findings
41. The future of talent in banking:
from the global digital banking
workforce evolution in the digital
survey”. Deloitte, Oct 9, 2018.
era. Earnst & Young Global Limited,
34. Cocheo, Steve. “Banking on Apr 2018.
Millennials: Balancing Branch
42. Lardinois, Frederic. “The future
Preferences And Digital
of talent in banking: workforce
Expectations”. The Financial Brand,
evolution in the digital era”.
Oct 2, 2018.
Techcrunch.com, Apr 2019.
35. Galvin, Jeff, Feng Han, Sarah Hynes,
43. Gaudin, Sharon. “Capital One
et. al. “Synergy and disruption: Ten
rides the cloud to tech company
trends shaping FinTech”. McKinsey,
transformation.” Computerworld,
Dec 2018.
Dec 2016.
36. 8 Ways the Digital Transformation
44. Grant, Jeremy. “Transforming a
is Changing Banking. Bottomline
Traditional Bank into an Agile Market
Technologies, Inc. white paper,
Leader”. Strategy-business.com,
BankingExchange.com, 2019.
accessed May 2019.
37. Ponczek, Sarah. “Machines Poised
45. Thomson, Jeff. “How Citizens Bank
to Take Over 30% of Work at Banks,
Stays One Step Ahead Of Digital
McKinsey Says”. Bloomberg, Jul 20,
Transformation”. Forbes, Feb 28,
2017.
2019.
38. Hess, Abigail. “Deutsche Bank CEO
suggests robots could replace half
the company’s 97,000 employees”.
CNBC.com, Nov 8, 2017.

30 | www.simplilearn.com
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