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A problem a decade in the making: are you “Digital First” or “Digital Only”?

Andrew Stevens
Posted by Andrew Stevens Product Marketing Manager Wednesday, July 25, 2018 - 22:51

With nearly 2 decades of experience at one of the worlds largest banks, Andrew is ideally placed to ensure that Quadient’s product suite continues to evolve to meet the needs of today’s financial institutions. His resume covers all aspects of banking operations and technology with respect to customer communications management and customer experience, and he has built a reputation as someone that can successfully execute complex international transformational projects in these fields. He earned his law degree in his home town of Sheffield, UK.

Customer Experience Update
A problem a decade in the making: are you “Digital First” or “Digital Only”?

I was clearing out the family storage room recently and found my old work notebooks from my past life in financial services. Flicking through them, I discovered that I’m just about to pass the tenth anniversary of the first time I heard of a now famous (or infamous, depending on your point of view) concept for technology in the banking world. 

The phrase, uttered by our CEO at the time, was a simple one; “develop for the internet first, and quickly port to the other channels after.” In the hushed silence that followed the delivery of the line, I looked around the room of a hundred or so senior executives and two very distinct expressions depending on the role of the person; either exultation, or horror.

The post meeting coffees solidified this split. In one group, the executives within the lines of business were excited by this new “Digital First” strategy and seemed delighted that they’d get the internet revolution that they’d been asking for. The other side couldn’t have been more different, their IT equivalents left scratching their heads asking “how could the CEO ever over-simplify things to the point that he believed that our different channels had any synergies?”, especially given that his team hadn’t even invited a single engineer, analyst, or architect from the staff-facing channels to this important meeting.

It became a pivotal time in the industry, with rival banks across the world having similar conversations and the outcome almost invariably being the same; the lines of business immediately became empowered to demand cross-channel functionality on ever-shortening timescales, simply by insisting that “Phase 1” was the internet channel only, and then it shouldn’t take much effort or money to port everything to everywhere else shortly afterwards. Their unsmiling IT counterparts were left fighting an increasingly desperate battle to deliver results in the face of a constantly changing number of channels.

As I think about the conversations that were made many years ago, I’m reminded of the foresight of my colleagues that day. Before the second coffees had been poured they correctly predicted that it would become impossible to hear the words “Digital First” without silently covering them with “Digital Only”, as the realities of budgeting for the delivery of solutions multiple times across completely different infrastructures caused entire channels to be cut from plans in every project – an effect only exacerbated by the rise of mobile banking and the need to split the digital budget to accommodate this a couple of years later. 

Have a look at Quadient's financial services overview 

The non-digital channels – whether they be the traditional paper communications or the staff facing advisory channels – suffered every time, and with each cut the walls between the channel siloes were quietly built higher and higher as the differences between digital and non-digital got larger. Five years in, and offered the chance to solve this problem with a sudden global glut of investment, CIOs instead chose to formalise the split through the creation of full digital siloes within their organisations, often working from different locations, with different dress codes, and using different methodologies from their non-digital counterparts in a deliberate effort to create further separation.

But despite all of this, I’m still drawn back to the prescience of that CEOs vision. He was right – the starting gun had already been fired in the race for internet supremacy in the banking world, and he knew that there needed to be a concerted push to ensure that we were up there towards the front of the pack as the race was in motion. The vision was right, but the market wasn’t ready - there were no underlying solutions that could be used to deliver parity across the massively different infrastructures of each of the channels, so costs multiplied, and overruns became the norm.

Today, IT within banking remains characterised by the same high-walled channel-focused siloes, where executing strategies across channels is an almost guaranteed non-starter due to the financial risk of creating a “black swan”. These projects are now broken down into smaller simpler chunks instead, but the unofficial “digital first = digital only” strategy has now become so ingrained as the accepted truth that attempts by the better IT architects to design solutions across siloes are met with scepticism and scorn. The channel walls are higher than they have ever been.

Yet while IT in banking may not have changed, the market has. The concept of true omni-channel communication has arrived with solutions available that can deliver functionality from a single source across channels as diverse as paper, SMS, email, front and back office staff channel screens, and those ubiquitous internet and mobile banking applications. At last there are options available for institutions of all sizes to radically transform their operating models and improve functionality without having to pick and choose which silo should receive their precious budget.

Another starting gun has been fired, this time for the race to tear down those walls between the siloes in banking and begin an era of truly omni-channel delivery, where costs are lower and benefits are greater. Are you ready to challenge for a prize that has been a decade in the making, or are you still running the “digital only” race?

For more information on how Quadient can help the financial services sector, please visit our dedicated page with downloadable content and videos here: Quadient's Financial Services Overview