In speaking with treasury management executives of banks, government, and large corporations the common theme for 2016 is prioritizing improvement of their “customer experience”, by which they usually mean “digital customer experience”.
Their customers carry smartphones and tablets, and are accustomed to using these devices to serve their need for information and interaction. They book their flight and hotel using Expedia (which now has an app available for the Apple Watch), and virtually summon an Uber to get to their business lunch which was reserved using the OpenTable app. However, if in the course of that lunch meeting they want to review their treasury management status, it is quite possible that will they be reverting to day old figures in an email, or perhaps even paper reports. Their goal is to transform the customer experience of treasury management and make it the seamless real-time interaction the digital customer expects.
Recently, I met a bank executive with the title “Chief Digital Officer” – which is a great title. Wikipedia defines the role as follows: “A Chief Digital Officer (CDO) is an individual who helps a company, a government organization or a city drive growth by converting traditional “analog” businesses to digital ones, and oversees operations in the rapidly changing digital sectors like mobile applications, social media and related applications, virtual goods, as well as “wild” web-based information management and marketing”. What an exciting role – converting traditional business models to digital business models to drive growth. This concept has far-reaching implications for many established organizations, and also poses some interesting questions regarding how to deal with legacy systems. Should these existing operational systems be scrapped and replaced, or can legacy systems survive and work in conjunction with new digital systems to deliver an improved customer experience?
Organizations such as banks and government tend to be very well established with a long history of operating in the traditional model. This poses a challenge that other digital companies don’t face. Uber didn’t have a fleet or cars, much less horses and buggies to contend with. They didn’t have to worry about conversion costs and migration effort. For traditional organizations these are huge barriers, as it takes significant expense and time to replace traditional systems which work well enough in the traditional model, but don’t support the customer digital experience.
For the brave visionaries with the power to re-engineer an organization, the best answer is surely to replace legacy systems with solutions which are digital from the ground up, and will offer a complete digital customer experience. The investment in cost and effort will pay off in a sustainable competitive advantage. This is what I predict the Chief Digital Officers will do in 2016.
What about the organizations that don’t have the CDO role, and where there may not be the impetus to make this investment and replace legacy systems? There is still a path forward to the digital customer experience – even if is not a perfect experience. A digital customer portal can interface with the legacy platform and give the customer the digital experience they demand. There will be certain limitations imposed by the legacy platform, but presumably these can be mitigated with future upgrades, while at least delivering an improved customer experience immediately. This will be the path followed by these organizations in 2016.
Wally Vogel, CEO – Creditron
