“Digital transformation means organisation in networks”
Digitalisation and digital transformation are two very different things. The first is relatively straightforward and can usually be implemented without opposition; the second is a hugely difficult undertaking – especially for large corporations.
ti&m: What does digital transformation mean from your perspective?
Andréa Belliger: Digital transformation is a process of social change that goes way beyond technology. At the heart of digital transformation is the increasing organisation of our world in networks. This gives rise to the new values and norms that form the backbone of digital transformation: the call for more open, selfcritical communication with a readiness to engage in dialogue; for transparency and participation, but also the call for authenticity, empathy, heterogeneity, and flexibility. These values are more than mere catchwords – they are a reality of the networked world.
And what is the role of new technologies in this?
In my view, technologies are driving this development. The overriding concern of many organisations today is how to use technologies effectively. However, transforming companies digitally requires the same amount of energy to be invested in designing systematically well-thought-out digital processes. Generally speaking, opening a bank account is still not a fully digitalised process, and within the healthcare sector, networked care providers are still very much in their infancy, too. But systematically digital processes also means digital service, communications, and dialogue channels, rigorous customer orientation, and proficiency in new working methodologies, such as Scrum or Design Thinking. None of that counts as digital transformation, however, if the corporate culture does not transform at the same time; if there is no common vision of the final destination of this digital journey and if a common strategy or new forms of organisation or governance are not implemented.
Who is doing this well in your opinion?
I think that the approach of Zur Rose, the Swiss mail-order pharmacy, is exciting. They combine online and offline cultures in a really smart and visionary way, with flagship stores and shop-inshop concepts. I am also excited by Medbase, the healthcare arm of Swiss retailer Migros. Medbase has the size, the aspiration, and the vision needed to rethink the healthcare sector. Stämpfli, a long-established company in Bern, is in my view a great example of the way a family business can be passionately transformed time and again without losing its soul.
These are all smaller businesses. What is digital transformation like for big hitters like Migros?
Migros is an interesting example. The business has always been a network and has an ultramodern decentralised cooperative organisation. In general, however, major corporations are still struggling with the process of transformation.
At present, the cantonal banks are posting a quick succession of record results. The model seems to work. Can institutions such as these be transformed without experiencing any real pressure?
In my opinion, the future of the cantonal banks does not lie in technological innovation; they don’t need to become digital leaders. Instead, the way forward lies in digitalising and automating their background processes and in systematically personalising their customer interfaces. This kind of rigorous customer orientation encompasses services that are straightforward, secure, transparent, fast, and highly personalised. Open, honest communication with a willingness to engage in dialogue, transparency, and participation are what matter. Software and counselling in one, as it were.
Which financial institutions are good examples of how the future could look?
ING in the Netherlands is a good example, or N26 in Germany. ING sees itself as the digital leader in the sector and acts accordingly. The bank invests in employee development, in establishing new working practices, in new organisational models, new working concepts, and a new mindset. You could easily mistake the bank for a software company, such as Google.
Where does the decision to launch such a fundamental transformation need to come from?
It requires a common vision and innovators – doers – who want to change the bank. But vision alone is not enough. You also need the people – managers, staff, owners, and customers – who understand the vision and are involved in developing it. And it takes courage: No one knows how an established company, particularly a financial institution operating in a highly regulated business, will cope with experiments during ongoing operations.
What practical advice would you give a bank manager?
Most bank managers fear that banking could look completely different, but don’t know how. I think the majority of bank managers would prefer not to fundamentally change either themselves or their business model. Business is good, and incentive programs do not reward the willingness to innovate and experiment.
What about a bank manager who does want to initiate change?
I would advise him or her to spend some time outside banking. Many bankers have been socialised in the banking system and have spent very little time in other sectors. I would also recommend increasing the diversity and heterogeneity of all teams, including the executive board; bringing more women and more visionaries into the business.
Is there still time for Swiss banks to transform themselves?
As far as the major banks are concerned, I’m not sure. Will there still be a place for large financial service providers or platforms in the future? Or are we moving more towards “contextual banking”, in which providers other than banks provide products and financial services to consumers? I see things somewhat differently when it comes to regional banks, such as the cantonal banks. The core values of digital transformation – communication, transparency, and participation – have traditionally been part and parcel of the DNA of these smaller banks, and these values tend to favour the local models of the cantonal banks. The real work needs to be done in the background processes. What’s more, cantonal banks need to become more open, not only in terms of their technical interfaces, but also more open to developing innovation across their own banking groups.
Will the individual therefore play an increasingly important role in banking?
Yes. Just like every other aspect of life, I am convinced that individuals and emotions are at the heart of the banking industry, too. The banking world must become more communicative, transparent, participatory, and – my own personal wish – more female.