5 things to get right for digital transformation in the “new better”

Building a resilient workforce, People & Organisations, Financial Institutions

The Financial Services industry has traditionally leaned toward optimisation, though it must be emphasised that optimisation should mean ‘make better’, not just ‘cut costs’.

However, the latest disruption due the COVID-19 pandemic has highlighted the need for workforces to be agile and resilient, and shifted the focus on people and recognising them to be a risk and at risk. It has also underscored that in the years past, digital transformation was often centred more on digital and less on the people aspects of the transformation.

To balance the two aspects, here are 5 considerations to get right on digital transformation in the “new better”:

Digitalisation is a big investment (just to save money): For all the scare stories on roles being disrupted by technology, in our analysis of the largest banks’ it highlights that in previous digitalisation efforts, for every $1 of long-term annuity savings gained through automation, we estimate it will cost between $3 to $5 in upfront cost. Whether that be through building, renting, growing or any form of severance / talent management.
Transformation risk is more people than technology: Within the context of the above numbers, there are numerous case studies of projects failing — not because the technology failed but because it was neither adopted nor leveraged appropriately. Leaders need to think of developing a fertile mindset and incubate change in areas where it is most likely to succeed.
Remote working unlocks potential: Remote working is not new. However, deciding who and where people can work requires a deep understanding of how they do their jobs by measuring the flexibility within roles, the skills, capabilities risk and performance outcomes. The result is a view now only of who needs to be in the office, but how frequently. That becomes a powerful data point to inform cost savings, risk and agility decisions.
Understanding skills and mobility saves money: Digital transformation is a significant investment. Cost can be mitigated by considering the potential within the existing workforce. Driving mobility will save money and more importantly build employee brand and engagement; which also saves money.
Being mindful of opportunity cost: Our workforces are ecosystems where the smallest actions can have significant repercussions. Use data to understand and predict these as best as possible. For example, when you insist on everyone being in the office, do you put yourself at a competitive disadvantage in attracting talent? Will you lose staff? Will you need to pay more to attract talent? By being constrained to the existing footprint, are you missing out on opportunities to grow the talent base or access diversity?

The above suggestions are deeply rooted in using data to understand transformation efforts and drive decisions. For an industry that forensically understands its clients, their risks, and uses data to drive billions in investments, it is time now to focus that approach on its greatest asset – its people.