If modern financial institutions seek to remain relevant and competitive in the 21st century, it’s increasingly imperative big banks and investment entities begin implementing Silicon Valley standards at scale and hyper-speed…or perish.
Most banks today are locked into a physical branch distribution model that makes them as prone to disruption from technology companies as the retail industry was. Even century-old behemoths like Sears, Levitz, and Woolworth’s succumbed quickly to cutting-edge online competitors. The same fate awaits financial institutions that fail to transform their business models in short order digitally.
It’s important to realize that digital transformation isn’t just about providing customers with online banking. There are countless large retailers and other businesses that already fell prey to high tech intruders. They had also made their own valiant (but late) efforts to digitize with an online presence.
Real change comes from within. The success of technology firms today (and the best hope for banks tomorrow) depends on refocusing development — not to solidify the organization, but to adapt to the customer. This process requires transforming the entire business process to make change an integral part of the process. The solution is an agile methodology.
Agile: It’s Not Just for Tech Anymore
- To stay competitive, financial institutions must adopt the same project management principles, and data flows that software development companies use
- Agile development refers to the iterative process of building and testing products rather than waiting until the completed project is delivered
- Can increase product development speed and decision efficiency by five times
- Banks can benefit from using agile practices on a business-wide basis
Agile Banking in the Real World
- Agile is still relatively new to the world of banking.
- Due to the commonality of in-house developed systems, mergers and acquisitions and an aging core platform, banks’ access to their data comes with complexities not faced by many of their new tech competitors.
A Customer-driven Model
- Focus on satisfying customer needs rather than building products and back-end technologies.
- JPMorgan Chase & Co. used agile methodologies in their mission to digitally transform, with the core objective of “To enable the delivery of highly personalized, real-time experiences that customers increasingly expect.”
Making the Jump to Agile
- In banking, the iterative approach that is the hallmark of agile enables faster development of and improvement to digital banking platforms in response to customer demand.
- Agile development is just one avenue of digital transformation. To understand a complete picture of why and how traditional financial institutions of all sizes are making this shift
