Driving digital transformation in banking

25 April 2019
The digital offering of many banks today is unlikely to meet the expectations of future clients

While long reliant on digital platforms, corporate banking faces urgent pressure to engage in complete digital transformation.

There are three primary forces propelling digitalisation in the corporate banking sector:

■ Digital-savvy customers who want in-the-moment information, services and transactions

■ Emerging technologies such as artificial intelligence (AI) and blockchain that can enable this speed of access 

■ Data and analytics to improve decision-making and provide insight into the near future 

In early April, a hackathon hosted by Dubai-based bank Mashreq and financial technology (fintech) company Finastra brought together fintech design leads and corporate banking clients to engage in a “design thinking” workshop to answer a simple, but crucial question: “How can we improve the corporate banking experience?” 

The event identified pain points such as slow transaction speeds, as well as opportunities generated by AI, machine learning and blockchain technologies. The ideas produced included the introduction of digital assistants to recommend custom products to improve financial performance, blockchain-based authentication solutions to decrease time spent on transactions, and machine learning applications to guide chief financial officers in looking at the most relevant data to make decisions.

To meet the expectations of our future customers, we must not only embrace this rapid digitalisation, but also provide our leadership with the right learning opportunities to drive this crucial change. 

Corporate learning has historically taken the form of leadership development programmes as well as courses or workshops intended to close identified capability gaps between groups of employees and job expectations. 

Typically, these learning experiences focused on developing people for a known and clearly defined future that was not radically different from the past. 

Today, we face a rapidly changing future. Organisations such as Mashreq must either shape this future or be shaped by the future. The desire to lead, not just embrace, the future of corporate banking must propel our learning and leadership development programmes.

According to a learning innovation specialist with whom we work, the following capabilities can help corporate banking leaders drive digital transformation at scale.

■ Understanding technology

While the leadership team may not need to manipulate data or learn to programme, they must understand the opportunities and limitations inherent in new technologies. The best way to do this is by engaging directly with emerging technologies.

■ Design thinking

This is a user-centred way to understand and solve problems in innovative ways. Through design thinking, employees from leaders to front-line staff can participate in radically improving stakeholder and customer experience. Design thinking also relies on rapid prototyping and testing critical components to decrease the length of time required for our dev-ops cycle.

■ Agile leadership

Banks are high-reliability organisations. Corporate banking leaders have to balance fostering innovation on one hand, while ensuring organisational stability on the other. This may involve creating discrete yet cross-functional teams to focus on developing new banking eco-systems, allowing organisations to exploit existing areas of strength while creating new programmes, products or organisational capabilities.

■ Mindfulness

The 2015 study, Inside banks’ information and control systems: Post-decision surprise and corporate disruption, suggests that the 2009 banking crisis resulted, at least in part, from a lack of critical attention to the right sources of data. Mindlessness, often caused by distractibility, leads to surprises. Surprises are rarely positive in our sector. Presence of mind enables us to consider a broader range of options, furthering innovation and decreasing risk. 

■ People development

According to the 70:20:10 Institute, about 20 per cent of learning should take place through coaching and mentorship. This becomes even more critical during periods of rapid change. In The Human Side of Change, author Dan Evans explains that resistance to change comes when employees are no longer sure that they have the skills required to succeed in their roles or wonder whether their roles will continue to exist. Through coaching, employees can learn to redefine their roles, apply their skills in new contexts and engage fully in digitalisation. 

Just as crucial are the mindsets we need to adopt. These include developing a bias towards action. We need to move more quickly from ideation to prototyping and testing. A product that we conceive today may be irrelevant in six months’ time. 

It is abundantly clear to me that corporate banking is facing complete digital transformation and for anyone involved with delivering corporate banking services today, innovation and design thinking are not optional luxuries. They are essential.

Karim Labadi is the head of global transaction banking at the corporate and investment banking group at Mashreq Bank

More from this month’s Agenda

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications