In the fast-evolving landscape of banking, digitalization has become a non-negotiable imperative. The potential benefits are vast, ranging from increased balances for current accounts to improved cost-to-income ratios and enhanced customer acquisition and retention rates. However, a significant gap exists between the intention to undergo digital transformation and successful implementation, as highlighted by many reports.
The Struggle of Banks in Digital Transformation
According to the reports, only 30 percent of banks successfully implement their digital strategies. This low success rate persists despite substantial investments in technology and resources. Traditional banking institutions face unique challenges, including technical debt, siloed IT architectures, and an aging workforce. The complexity and cost associated with digital transformations often lead to projects exceeding timelines and budgets, resulting in canceled initiatives or diminished returns.
Common Traps and Challenges
- Underestimating Complexity and Cost
Digital transformations often falter when leaders underestimate the intricate nature of executing such initiatives. Complex interfaces, data management, and interdependencies across various initiatives contribute to the difficulties. Involving all stakeholders in strategy development, understanding the extent of necessary business process changes, and implementing required changes are often overlooked. 70 percent of digital transformations exceed their initial budgets, and 7 percent end up costing more than double the initial projection.
- Underestimating Technical Debt
Technical debt, including unused applications and excessive infrastructure, is a critical factor often neglected in initial transformation budgets. The consequences of overlooking technical debt can impede the pace of digital transformation, even if the work doesn’t generate an immediate financial gain. Addressing technical debt is essential from the outset, requiring banks to assess and prioritize this work as part of their digital transformation strategy.
Omnia BPM: A Low-Code Platform Solution
To navigate the challenges outlined above, banks can turn to Omnia BPM, a powerful low-code platform designed to streamline and accelerate the digital transformation process. Here’s how Omnia BPM can address each challenge:
- Simplifying Complexity
Omnia BPM’s low-code nature allows for the creation of sophisticated applications with minimal manual coding. This enables a more inclusive approach in strategy development, involving both business and IT stakeholders. The platform’s visual development environment facilitates a better understanding of the necessary business process changes, reducing the risk of underestimating complexities.
- Managing Costs Effectively
With Omnia BPM, banks can create scalable solutions that adapt to changing requirements without significant increases in cost. The low-code approach inherently reduces the development time and effort, preventing initiatives from extending beyond the expected project duration. By providing a clear overview of the transformation journey, the platform helps manage costs effectively and ensures that the program remains feasible.
- Addressing Technical Debt
Omnia BPM recognizes the importance of addressing technical debt from the outset. The platform allows banks to gradually modernize their existing systems and infrastructure, ensuring a smooth transition without disrupting ongoing operations. By incorporating technical debt reduction into the digital transformation strategy, banks can lay a solid foundation for future growth and innovation.
In the ever-evolving landscape of banking, the successful execution of digital transformations is crucial for sustained growth and competitiveness. Omnia BPM, as a low-code platform, offers a strategic solution to the common challenges outlined in the article. By simplifying complexity, managing costs effectively, and addressing technical debt, Omnia BPM empowers banks to tilt the odds in favor of successful digital transformations. Embracing the capabilities of low-code platforms is not just a technological upgrade; it’s a strategic imperative for banks aiming to thrive in the digital era.
Tony Vitale
