The five Bs for sustainable digital success at building societiesKeith White
It has been suggested that over the last 12 months, businesses have accelerated digital transformation by the equivalent of seven years.
Building societies have been at the forefront of making services available to customers as the first lockdown took hold. They supported mortgage customers needing payment holidays and enabled access to savings where branches were closed. And, like all employers, they responded to lockdown and rapidly shifted to home working and other forms of remote working.
Whilst many of the changes that have been made are necessary quick fixes, the shift to digital is here to stay. In UK financial services, over two thirds of consumers expect to continue using digital channels for more of their needs than before the pandemic.
Enablement of digital customer journeys and touchpoints will need to stabilise and become part of business as usual and the sector itself acknowledges the need to increase their digital capabilities in order to be sustainable.
For building societies, this raises two critical questions:
How do we make sure your digital experience represents your brand to the same quality as your other customer channels? And how do you make sure your investments deliver sustainable results?
At Credera, we believe that building societies should focus on five key areas in order to maximise their strengths and put them on the right tracks for successful long-term digital transformation. We have outlined our thinking below into a high-level summary.
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Build on strong foundations
It all starts with knowing where you are and where you want to go. Getting the right foundations in place will make the difference to the pace at which you can deliver. Impartially assessing internal skills, ways of working, and maturity across architecture, cloud, and data will provide the cornerstone for future success.
It might feel like this will make you slower to start but doing this in parallel to setting the direction of travel and beginning preparations will make a significant difference to what can be delivered and how well staff and members join the Society on the journey.
Build in the cloud
Being in the cloud is no longer an aspiration or an alternative to on premises provision - it is rapidly becoming a must. Cloud has been at the centre of enabling organisational agility during the pandemic. It adds to resilience and is able to help organisations control costs. COVID-19 has helped illustrate just how adaptable working in the cloud can be.
The savings and mortgage markets are primed for innovation to take advantage of far-reaching policy and societal changes triggered by the pandemic. Speeding up iterative deliveries to customers will be vital in benefiting from this opportunity. The ability to only pay for what you use in the cloud means it is a great resource for innovation and testing ideas. If it doesn’t work, you can stop. If it does, you can scale up quickly. However, it’s not as simple as just ‘getting on to the cloud' - you must optimise and ensure your organisation is set up in a way that actually releases the benefits, which is where we see some organisations struggle.
Building Societies have been bringing people together for over a hundred years: achieving more collectively is at the heart of mutuality. As more and more of the future members start to view ethical business, climate change, and diversity as important characteristics for brands they use, mutual values put building societies in a strong place. The challenge is to communicate these values to members and future members digitally and strengthen relationships.
Having a ‘human’ or ‘connected’ service experience that builds this relationship is something building societies have done well for years through branch and voice channels. The key to extending this into the digital channel is marketing technology.
Also known as MarTech, in simple terms it is the systems and tools that help manage and automate engagement with customers.
This might sound like a large undertaking, but all organisations will have tools and capabilities that can provide a place to start. Starting somewhere, building on what you have, and focusing on cross-functional interactions will be what makes the most difference.
There is a growing movement around open banking which is already changing the way people access and utilise financial services. New market entrants and disrupters are using open banking to drive greater value and create personalised and responsive experiences.
We believe building societies can match these experiences with products that have a higher level of trust. At the same time, back-office processes can be modernised, improving speed, efficiency, and cost. These developments will be crucial when facing the challenge of changing customer expectations influenced by providers whose business model is built on the provision of digital services.
But underpin it all with data
Building societies recognise that good data and analytics are an essential part of the future, but what does a data-driven organisation look like and what does it need to have in place?
To achieve the data driven objective, it is not prerequisite to have a corporate data warehouse, a data lake, physically consolidated data sources, or that single version of the truth that remains so elusive to many organisations.
The platform for good data is a good data strategy. Clarity on which data is good for the organisation and what it is needed for will help building societies avoid expensive failures. To become truly data driven, there needs to be a cultural transformation that is as much about the alignment of people, business processes, and technology solutions as it is about data itself. Big data does not necessarily equate to good data and without good data, good decisions are unlikely.
Making data accessible to those who can achieve value from it and giving them the tools and means to do so means democratising data rather than centralising and controlling. Data is an asset that needs the right investment at the right time to ensure its value is realised.
Now is the time to realise the opportunities
The recent survey results from Whitecap and the BSA have shown that building societies recognise the need for digital engagement and the opportunities it will bring. The challenge is to do this while maintaining the brand values that members and future members expect whilst delivering the sector’s high quality of customer experience.
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