Paul Wolda is principal consultant for SunTec and acts as interim manager within the financial services industry.
He has over 15 years’ experience in strategy consultancy, account management and product management, and a successful track record of improvements contributing to bottom line performance.
Customers and new entrants within the financial service industry force the establishment to change at a faster pace than ever before. Consumers of banking services demand more, be it new mobile services, better ease of use or new functionalities. With staff redundancies being made within banks at global level, financial services
professionals have to do more with less. Given the increased competition from nimble, technology-native FinTech upstarts and decreasing profit margins, banks are trying and need to stay ahead of one another. Customers have the power now, but for the established banks, it is a real challenge to stay ahead of new competitors.
This means the way of working has to change. Agility seems to be the remedy, this way of working enables modern companies to meet the required pace of change. Businesses don’t have to analyse everything upfront, but organisations just have to start using clear guidelines and learn and analyse on your way.
The fastest way to the objective is by starting – a step which some organisations are afraid to take, but be crystal clear on what you try to accomplish! After that, it delivers an opportunity for workforce to suggest new ideas and for management to make sure they flourish. The best ideas come from people involved in the day-to-day operations. If they experienced a top-down management style for years, coping with this new way of working will be a challenge.
The workforce will need a shift in their paradigm of control. They need to take real control of their own domain, be proactive and on top of their business. No one else will if they don’t, and there is no safety net. If organisations can restructure their processes to the new way of working, there is no doubt this will lead to better improvements, faster delivery, but also induce higher employee satisfaction. It is fun to be more in control and influence the interaction with clients more directly.
This absolutely needs a different approach for traditional senior management within the banking industry and requires a change in their definition for control. The waterfall approach for project management gives them the idea that they are in control. Prince is all about minimising risk by planning upfront. By leaving the initiative to the work floor and installing a more output-based governance process, new ideas will pop up.
This agile way of working initially will be uncomfortable for the workforce and will feel out-of-control because they don’t know exactly what will be delivered by when. At the beginning they will still be asking for detailed project plans upfront to compensate for this feeling. Management need to keep their eyes open for such behavior, address the issue and trust the team to deliver the results. Of course, that doesn’t mean that the team has complete freedom to do whatever they like. Also, within an agile way of working there are a number of instruments to steer and monitor progress, do consider the roll out of burn down charts, velocity and story points.
This is exactly where organisations should start in order to make the shift to the agile way of working which is required by the market. With the growing pains addressed, trust the junior staff within the organisation that they know best, but also trust in the business has selected the right people for the job and that they have the ability to change. Start with case studies of successful projects which will show the potential of this new way of working to the organisation.
It is for management to understand that it is not their job to know best and to have everything under control, but that they are the facilitators, to help and support the ideas from the rest of the organisation. This will result in a company facing competition and new client needs with confidence.
Of course, the key to success is not just implementing the agile way of working.
It’s a prerequisite and a skill that should be in the veins of every modern company. But companies need to have more in order to be successful. They have to be smarter at the infrastructure level. Banks invest massively in new IT platforms in order to meet the new standards set by the market and their competition. They are looking to move away from the old complex batch-oriented systems towards real-time loosely coupled platforms. In this way they become more flexible, which results in a faster time-to-market at lower costs.
However, smart organisations will use it not only in a defensive way but will use this new set-up to create new revenue opportunities. Financial Services organisations have centuries worth of data and they will try to monetise the data they have. New opportunities will not be only sourced through targeting their own clients for more cross-selling, but by creating new revenue streams by delivering data as service towards other parties such as telecoms and media providers, taking into account the regulatory environment.
Product innovation in the Financial Services industry, at its core, is the creation of an improved version of previous
Banks have an extensive lake of information, which cannot be matched by other industries. For example, think about checking the eligibility for lenders. The bank, without revealing any data to the lender, can analyse the data it has on the customer and let them know whether he is eligible or not. In an ideal world, the bank monetises the treasure trove of data and insights they possess and provides a trusted platform for their customers at the same time.
The way to do this is to set-up an API layer. An API offers you the possibility to shift from one-on-one connections towards one-to-many. With an API, banks can connect with other companies in various sectors in a simple way. The way of communication is standardised, so costs for acquiring additional clients will be limited, but the number of end users is unlimited.
So be smart, not only use the creativity of the entire workforce in an agile way, but also use the creativity of other companies to gain additional revenues. Innovation is limitless and it is time for banks to act.