Fine-tuning Digital for Relationship Banks

The digital customer experience from an organization that leads with technology – think online Fintechs that rely on algorithms to price deals – is one thing. Fine-tuning the digital engine for a business bank that leads with a personal relationship focus requires a different mindset.

Of course, there are commonalities: the table stakes of basic operability, the capacity to fix what’s broken, and the opportunity to delight customers. But for relationship-focused banks, results are designed to accrue to the relationship. In this setting, digital excellence should free up the banker-customer relationship for the consultative connection that builds client retention, expansion, and value.

As banks that emphasize ongoing relationships with customers focus on leveling up their digital capabilities, here are key considerations and some potential constraints to keep in mind.

#1 Digital isn’t about technology, it’s about business outcomes.

It’s natural to think about digital as just a technology problem or solution. But effective digital transformation more often stems from understanding the business operating model and how a bank wishes to engage with their customers, rather than flowing from what technology can do. To begin a digital journey with technology is certainly an easily available path. Any major software provider stands at the ready to recommend their platform as the best starting point. But starting there lays down a marker that digital is all about the technology. This can lead to early wins, but will become a constraint in the long term.

Instead, start with the customer experience, processes, and service offerings, and then, after agreement on these outcomes, align the right technology investment to achieve those outcomes. To do otherwise puts technology at the center, and that is exactly where relationship banks want their customers to be.

#2. Know how your customers want to operate.

In a client-centered world, business customers won’t go to the bank’s systems to transact, they’ll do that within their own systems, through digital connectivity with their bank.

Fueled by automation, Artificial Intelligence, and data driven API’s, this connectivity and transparency will become the catalyst for the digital pivot at relationship-focused banks. Banking will “just work,” feeling more seamless and without the operational friction that often exits in today’s model.

Customers want digital capabilities from their bank with the power to recede into the background and leave the stage open for what matters most – the advisory aspect of their banking relationship. When bankers are able to stop putting out operational fires, what’s left is room to help clients solve problems and focus on opportunities. An effective digital experience enables bankers to be more productive for their customers.

#3 Shepherding resources; forestalling ‘siloed’ solutions.

Investing in digital across a banking organization sets off an ongoing juggle of time, resources, and priorities. For the CIO, moving the whole organization forward is obviously essential, but at times it’s hard to keep this at the forefront. For instance, it’s not unheard of for an individual business unit to lobby for a unique solution to support its critical set of customers. Building that solution for one part of the bank can ease life for a bit, but it also can divert resources and create a limiting layer of uniqueness that becomes a hurdle down the road.

Guiding digital transformation requires an ability to persuade as part of the answer, a technology foundation that can flex to accommodate particular business unit needs, and leadership based on transparency and open communication that fosters alignment the bank’s broader, collective goals.

#4. Embracing agility.

Digital transformation is anything but a “one and done.” It’s an ongoing focus that is committed to innovation and driving the imperative for change. For relationship-focused banks, taking on a digital transformation can have a broader impact, changing overall expectations for how projects are planned, executed, and locked into the business operating model.

Staying digitally relevant is about being agile. It’s about reconciling with the idea that there might not be a beginning, middle, and end to a project. Results are continuous with the objective to constantly bring value to banker-client relationships.

Increasingly, this embrace of agility will bring banks in line with the workstyles and expectations of today’s customers – the CFOs and treasurers who shape their strategies to changing data with ease, have a baseline comfort with digital everything, and yet value the hands-on attention of a thoughtful banker.

For relationship-focused banks, digital capabilities clear the way for an elevated advisory relationship that builds retention, with client growth and satisfaction as the ongoing goal. When digital leadership can bring this to the table, the one-to-one focus of relationship banking can be even more geared to helping clients succeed.

Jeff Semonovich is Chief Information Officer for Western Alliance Bank, a national business bank named the #1 best performing of the 50 largest public U.S. banks for 2019 and 2020, per S&P Global Market Intelligence.