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14. December 2017

Finance 4.0 – the future of smart economics

Digitising banks: the unexpected revolution

Regulation and cost-efficiency, pricing policies and digitisation are high-priority affairs for many economic sectors. Only those effectively incorporating them into their everyday business operations will have success in the future. In this context a comprehensive digitisation is of the utmost importance.

Reset for core processes

Economy 4.0, banking 4.0, business 4.0 – all these trendy terms are referring to the same thing: the economy is fundamentally changing. Digitisation is already in full swing in our private lives due to new inventions in communications, entertainment media and social media. Now it’s entering the world of industry and trade, manufacturing and distribution, logistics and communication. Without the appropriate digital tools it will be “rien ne va plus”, for three reasons:

  • Customers expect products and services which can only be implemented in digital systems – such as payment systems, online banking, route planning via smartphone etc.
  • Centralised players are setting the standards. Anybody wanting to offer certain services can do so only if they are working digitally. Examples are pan-European tender platforms, exchange of data etc.
  • State regulations require digital data for proceedings concerning permits, licensing, certification and documentation.

Many in-house workflows will have to be amended in order to meet these requirements – and that’s why the IT departments are playing a crucial role. Their days of mere troubleshooting are over, in the future they will be asked to steer companies through the choppy waters of digitisation.

Learn to love your computer

The world of banking has taken its first step with online banking and digital communication channels for customers. But it really is only a first step. Digitisation requires a new corporate culture for the necessary reboot to work. Digitisation is nothing short of a game changer – a “keep calm and carry on”-attitude is certainly out of the question, since this would not even meet the requirements by the banking regulation authorities. So, a culture of innovation, encompassing all information and decision-making channels, is needed. Digitisation will not leave a single employee of financial institutions unaffected. It will, however, put to the test every existing qualification and create a great need for new skills. Digitisation will fundamentally change a bankers’ job description.

If perceived as a chance, and not as an annoying adjustment, digitisation can expand the horizon. Independently developing new products is not the answer, this can be done more efficiently within partnerships. More important are stabilizing and expanding the existing customer base – in a time where customer loyalty is on the decline. Spreading one’s financial business over different banks and service providers is becoming the norm rather than the exception.

Involved or affected

The digitisation of banks is a revolution, the implications of which are gradually becoming clear to those involved. And it surely is the central challenge for the future. The question is not whether certain requirements by banking authorities are met efficiently or if customers are pleased with the new online banking input screen. The question is rather if one’s role is defined – as someone who is actively involved in or someone who is passively affected by digitisation. It’s a fundamental difference in perspective and willingness to act.

Within the LCL system of motivation that leaves only one alternative: the first L. Only reacting positively to digitisation (“love it”) will ensure success in the future. C (or “change it”) is no viable path since digitisation is irreversible. And the second L (“leave it”) will lead to the termination of business operations. Nobody wants that – and it is also not the intention of this unexpected revolution.


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