80% of financial institutions will become irrelevant by 2030 due to their inability to compete with digitally-savvy rivals, according to research by Gartner.
While the need to evolve digitally is by no means a new or evolutionary concept, FIs will have to ensure that the role played by CIOs in ensuring the smooth, secure and seamless flow of information across a digital business agreement is transformed.
A recent whitepaper published by DocuSign, ‘The CIO’s guide to digital transformation in banking’ explores this transformation and how a digital system of agreement (SofA) forms the bedrock of an innovative and robust business model.
Modernising the system of agreement - that is, the process of preparing, digitally signing, acting-on and managing the agreements that are critical to a FI’s business—is a key focus for the global e-signature and agreement cloud leader, DocuSign. Finextra spoke with Ron Hirson, chief product officer, about his views on how CIOs can drive real digital transformation.
Standing out in a digital crowd
Digital transformation has revolutionised the traditional banking model. Customers now expect the best in digital on-demand experiences and banks need to differentiate themselves in a crowded market as a result. In addition, what may have been acceptable to those customers in the past—piles of paperwork, inefficient in-person processes, and inflexible applications—no longer is.
How does a bank differentiate itself? The answer, according to Hirson, is in the customer experience itself. “To deliver a seamless and efficient customer experience on the front end requires a huge amount of work to be completed by the systems on the back end,” he says.
“The CIOs that have helped their banks to stand out have taken a few key steps. They have broadly digitised their back-office processes to ensure there is no delays or errors in the transfer of data between agreements and systems.
They have also partnered with SaaS providers to create a secure option for customers to transact in the cloud. And they’ve recognised the ways that customers access data and services in their daily lives—mainly via mobile devices—and they’ve optimised their banking services for that form factor.”
The “broad digitisation” that Hirson refers to is the essence of the agreement concept. Forward-thinking CIOs are now looking at the front and back office, replacing outdated and clunky manual process with ones that are digital, and are modernising the way that agreements are prepared, signed, enacted and managed.
Make the data work for you
Once the building blocks of a modern system of agreement are in place—and they are starting to enable banks to deliver differentiated services to customers—it is then time for a CIO to take the next logical step: leveraging the power and value of the company vast data stores.
“If all your customer and prospect data is on pieces of paper in filing cabinets, you’re not making best use of it. If it is digitised, but stored in places you cannot easily access, index or search, then you are only at a slight advantage. This process needs to be optimised and CIOs need to be the ones doing it.”
After all, banks generally invest millions of dollars in their systems of record (SofR)—such as CRM, HCM, & ERP—and their systems of engagement (SofE)—marketing automation and internal collaboration applications, for example. Leveraging the data that resides in those systems simplifies and accelerates the entire process of doing business as a result.
To build or buy
While every bank’s digital transformation needs are unique, building solutions internally is far more expensive and challenging than partnering with an outsourced provider. Forrester Research suggests that this is the case 65% of the time.
However, when budgeting for this kind of process, Hirson recommends that banks pay greater consideration to the time, effort and hard-currency cost savings that are delivered once the system is implemented.
“We’re talking about eliminating all manual processes across the agreement lifecycle—from requesting information, preparing, negotiating and routing documents, printing and signing, searching, storing and managing.”
As companies, particularly large banks, eliminate the friction inherent in processes that involve people, documents, and data, they can see improved sales productivity, increased conversion rates, and higher customer retention.