In an age in which technology has changed consumers’ perceptions and consumption habits, the financial services industry has had to innovate rapidly in response to this new mindset. Quintis Venter, senior software engineer at ThoughtWorks, argues that the biggest threat is the sluggish adaptation of internal structures and processes, not the technology itself.
One of the biggest mindshifts to emerge from the consumerisation of services brought on by the Internet age is the rejection of the notion that users are at the mercy of service providers.
This is true of practically every kind of service offered: from fast food and restaurants, storage and backup to communication and messaging. The traditional model for the vast majority of services has been turned on its head, and the financial services industry is not immune to this seismic shift.
This is being driven primarily by an anticipation of accessibility, ease of use and immediacy. In the same way that consumers expect to be able to access services such as messaging, storage and online shopping from the comfort of their lounge, or even in transit, so they expect financial services to offer the same benefits.
The reality is that if a banking transaction, for example, requires any more effort than sending or receiving an e-mail, customers are more than ready to switch to a provider that offers the convenience they desire.
This in itself presents a major challenge as the required response is not simply building an app. Financial institutions are having to transition from being more than simply services companies to being solution providers. This brings into focus their ability to perform systems thinking.
What this means in practical terms is that the entire outlook of financial service providers has to change, starting with the elimination of silos in the organisation. Traditional structures and areas of responsibility have to be sacrificed in order to leverage the advantage that technology offers.
And this is not something that happens easily in organisations that have not needed to change for literally hundreds of years.
Without breaking down the internal barriers, companies will struggle to adopt the solution-focused approach. The hallmark of product companies is their ability to respond rapidly to market and consumption patterns, which is nigh on impossible if processes and decisions are still stuck in silos.
In our experience, the ability to respond effectively will be delayed even further, the longer these issues remain.
Having worked on a number of projects with some of the country’s leading financial institutions, these lessons are not easily learnt but progress is being made. There is certainly no shortage of willingness, there is often simply misalignment in priorities and understanding of how to tackle these issues.
What is clear, however, is that in order to make the step up to a customer-focused organisation able to respond quickly and effectively requires a holistic approach that involves every aspect of the business and a mindset change that removes the divide between business and technology.
We have by no means seen the end of the consumer-driven technology wave, and the sooner that the financial services industry embraces this change the easier it is going to be to become the service providers their customers expect.