In February, Commerzbank announced plans to invest €1.7bn in the bank’s IT services and infrastructure over the next three years. On the face of it, this seems a sensible if not laudable approach—after all, most banks are at some stage of digitisation. But as Teo , Blidarus, Founder and CEO at FintechOS tells Douglas Blakey, approaching digitisation as a standalone process with a start, middle and end is fundamentally flawed. And, says Blidarus, it is the reason why $900bn of the $1.3trn banks spent on digital transformation in 2018 went to waste.
The key reasons that digital transformation projects fail:
- Lack of alignment between top-level management and teams deploying new capabilities;
- An inability to change organisational capabilities and hire talent to sustain continuous development beyond innovation labs. This results in low-impact “innovation dollies” that doesn’t embed innovation;
- Myopic focus on “products” rather than customer journeys resulting in fragmented and siloed approach, and
- Lack of understanding from the banks on customer needs and what’s best value in meeting them
Blidarus adds: “The crucial word here is “continuous”. Digitisation isn’t a tick box exercise. It isn’t something that stands alone. It is a state. You are either digital or you are not. And the reason DT programmes fail is they are too complex, too expensive and take too long. What’s a better approach?”
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In this interview, Blidarus goes on to discuss why not achieving digital transformation is a good thing for banks And he stresses the importance of seeing digitalisation as a state rather than an end-goal. In addition, he explains why the pandemic destroys complacency and offers an opportunity to change approach as well as discussing how to drive continuous change through augmenting legacy technology.
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