Pierre Boulay, head of CEE at Backbase, discusses how banks in Central and Eastern Europe can pivot to better align with customer demands and stay ahead of the curve
Go deeper with GlobalData
This begs two critical questions: What is the source of this challenge? And how can banks pivot to better align with customer demands and stay ahead of the curve?
Second, taking leaps of faith to adopt new technologies is inherently risky – it is difficult to predict exactly how changes will be received by the bank’s employees and customers alike. Innovation costs time and money, and it is natural for senior bank executives to worry about whether their investment will ultimately pay off.
However, adaptability and calculated risk are the keys to survival in this fast-paced digital era. To overcome risk aversion, bank leaders should look to the example of neobanks and fintechs that are putting all their chips on innovation. These businesses are succeeding at delivering satisfying customer experiences at a relatively low cost, and with strong leadership and a firm belief in the benefits of digital transformation, incumbent banks can as well.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataFrom a leadership standpoint, bank executives can further help overcome fear of the unknown by incentivising innovation among their employees. By rewarding those employees who embrace digital transformation – and actively looking for employees who will help advance innovation goals – bank leaders can help build smart risk-taking and forward-thinking approaches into the fabric of their organisations, in turn making change feel less fraught.
Regional aggravators
This contrasts with an agile methodology, which comprises a more iterative, speedy approach that incorporates a cyclical and collaborative process. Many of these banks will claim they do the latter; the reality is very different.
Agile is not just about doing two-week sprints. Rather, it requires the entire organisation to embrace nimbleness and flexibility – from procurement, legal and compliance all the way up to the management team. This type of top-to-bottom cultural change may feel risky, but in reality, adopting an agile approach is often less risky and more cost-effective, as it facilitates faster development cycles and more successful deployments.
An additional complicating regional factor is the regulatory environment in CEE. Unlike Western Europe, regulators in CEE have been slower to embrace pro-innovation regulations such as open banking or digital signature for onboarding. This lack of external pressure to evolve can contribute to an overall sense of industry inertia across the region.
However, because switching to a modern, agile infrastructure would likely result in a temporary rollback of features, banks are apprehensive of true modernisation, even if it comes at the expense of a long-term, enhanced user experience.
In practice, the first step towards a more iterative approach to innovation would likely be an internal program that will enable a bank to become more agile at scale.
Starting with small, internal teams will allow a bank to acclimatise to manoeuvring nimbly, test hypotheses and prototypes with small groups, and – critically – remove siloes to ensure that each cog is proceeding in a compatible manner to avoid accruing technical debt.
Meanwhile, in-app analytics that integrate directly into mobile applications provide insight into users’ subconscious via their actions – for example, what features they are using the most, where bottlenecks exist, and how many clicks it takes to get to an end destination.
This 360-degree view of user experience allows banks to create effective roadmaps that truly incorporate what their users want and need – saving time and money, and making their users feel valued. Innovation and new features are only as valuable as your end-user finds them. Iteration is essential to digital transformation.
Currently, there is still a lack of decisiveness hidden within budget decisions. For example, in some extreme cases even large banks in southern Europe have only invested 1% of their budget to digital. Skimping on solutions in the short term and not treating digital projects at a strategic level will result in banks losing time, money and, ultimately, customer satisfaction in the long term.
Banks need to break down internal siloes, facilitate effective communication and collaboration, create a single rhythm between all teams and elements of their ecosystems, and – most importantly –continuously invest in these ongoing programmes.
Digital is not a one-time project or expense; it must become the core of every bank’s business. Building a solid foundation on digital innovation is the most powerful way CEE banks can ensure they thrive for decades to come.
