While most banking leaders worldwide acknowledge the need to transform their business model to compete with new industry players, many have yet to plan and execute a digital transformation strategy, according to the latest market study by International Data Corporation (IDC).
Key findings from the IDC study include:
- All banks worldwide acknowledge the importance and complexity of transforming their businesses to compete in the new digital economy.
- However, nearly 40 percent are still at the ad-hoc or opportunistic stages of maturity, meaning that they have not yet executed on a sustainable digital transformation strategy.
- Fewer than 10 percent can claim that they are in a position to be leaders in innovation and adjust to, or create, significant disruptions in the market.
- Transforming from the multitude of legacy technology and processes in the banking environment is not an easy task. The sluggish nature of organizational change makes the challenge even more onerous.
- Those banks that are succeeding are the ones that recognize the need to embrace transformation at the highest levels of the organization and follow that up with a frank and accurate assessment of their business goals versus their technological and operational capabilities.
IDC recommends bank organizations must:
- Assess their current level of strategic competency and maturity along the digital transformation journey.
- Benchmark their own digital transformation maturity against the maturity level of their peers and business needs.
- Uncover strategic maturity gaps and identify areas in need of improvement to achieve business transformation objectives.
"Banks no longer have a choice but to transform if they want to become more responsive to today's and tomorrow's markets," said Jerry Silva, director at IDC. "Those banks that have committed to digital transformation at the board and C-suite level are already creating disruptions that are taking the industry to business models beyond banking."
Savvy CIOs and CTOs are aware and informed about the Fintech start-up phenomenon, and are already learning the key attributes that make these new offerings so attractive to both retail and commercial banking customers that welcome and appreciate innovation.