Digital transformation is tough. Rapid developments in Artificial Intelligence, Intelligent Automation Chatbots, Machine Learning, and Cryptocurrency are accelerating innovation and successful digital transformation requires substantial resources, and focus. Agile Digital scrum teams should be supported with systematic planning and a programmatic organization. These measures require investment and there are calculated trade-offs required. Yet if organizations neglect to take these steps, their digital investments will fail to yield a payoff, and competitors and incumbents continue to siphon away customers, and start to extend their competitive advantages at accelerating rates.

Incentives to drive Digital Transformation;

• Personalized interactions from AI. Thanks to technology leaders like Amazon and Netflix, customers are increasingly expecting personalization. Staff could approach people to demonstrate the new applications at opportune moments, as when customers are being onboarded by a salesperson. Digital ambassadors can also be identified to be available on-demand for the initial launch of new services. Online technical workshops and hackathons can also work.

• Commitment to Digital First offering. With convenience and access being key attractions of digital channels, companies should constantly seek to improve the digital experiences by making them simpler and more convenient. For example, companies can add features such as video chat or voice chatbots.

• Rewards and incentives. Offer carrots first to reward the migration to digital. This can be through financial or nonfinancial means. Common tactics include one-time payouts or fee reductions, gifts, or exclusive event invitations. Companies can also offer incentives to digital customers for referring friends or relatives who are offline.

• Pricing penalties. After carrots come sticks that make the digital offering financially more attractive. Fees can be added to select offline services that are digitally available.

• Service-differentiation hurdles. To make the offline offering less appealing, companies can introduce hurdles such as longer wait/serve times for specific types of transactions in contact centers and branches, alerting customers to digital alternatives. These should apply only where convenient digital alternatives exist and the economics are justified.

Step 1—Communicate and Coordinate

To build awareness about the digital transformation, employees first need to hear about it. Organizations tend to underrate communication during periods of change and do too little of it. Bank leaders should provide a clear case for change, a reason why digital transformation matters. They can cite hard evidence such as declining revenues, or anticipated trends such as changing customer behaviors or disruptive competition.

Employees also want to know the target state of the transformation—“what we want to achieve.” This goal should be distinctive and easily understandable, but also emotional so that people want to embrace the journey. Senior management and the extended leadership team, moreover, should fully support and embody the end state. Using quantitative measures to express the target state, such as revenues or market share, will allow the organization to clarify and track progress. In addition, a distinctive slogan or logo can crystallize the target state.

Together with the case for change and the target state, other effective communication should be rigorously planned and executed. Tactics range from town hall events to videos, blogs, and virtual collaboration tools such as Slack or Yammer. A communication plan will harmonize these various tactics and include dedicated metrics and details regarding content, timing, channels, presenters, and audience.

Step 2—Engage

Communicating a message does not automatically mean the message has been understood or agreed on. So banks have to engage with employees. While communication usually flows in one direction to reach larger groups, engagement provides the opportunity for each employee to participate in the digital endeavor through discussion and questioning. Communication generates attention and curiosity, but only engagement promotes understanding and acceptance. 

Banks can travel in two directions to shape engagement. Top-down engagement starts with the executive board and then moves down the hierarchy along a defined sponsorship spine. Occasions for engagement include co-creation workshops and leadership walk-arounds. Bottom-up engagement uses a select group of employees who have a special affiliation with digital and a mandate to spread digital adoption. They can engage through a digital champions network, pulse checks, informal lunch discussions, an employee app, and hackathons.

Step 3 — Skill Up

If communication and engagement have been effective, most employees will have accepted the change. But acceptance does not equal implementation; that is where dedicated measures come in. Enhancing employees’ skills, tools, and methods can do the job. For a digital transformation, this often includes new, more flexible ways of working, as well as hard skills such as data tagging and data analysis. The behavioral change also thrives in a favorable setting. Banks often have organizational blockers such as detached working spaces that make it difficult to collaborate, or restrictive mobile phone policies that undermine the proclaimed mobile-first approach. Banks will want to identify and remove such blockers.

Step 4 — Feedback loops and metrics

Continuous feedback loops help to identify and address risks at an early stage. Regular “pulse checks” can gather employee feedback. Based on the feedback, senior leaders and change agents can understand the problems, involve employees in discussing potential solutions, and arrive more quickly at resolutions. The feedback allows communication and transformation plans to be adapted accordingly. High-velocity metrics also can help catalyze change. One Southeast Asian bank found that feeding the branch staff data on their success in driving digital adoption served as strong motivation by itself, and was reinforced by senior leaders’ recognition or rewards to the highest-performing branch.