Enterprise agility helps established firms develop disruptive products and services at the same pace as the nimble digital-native FinTech’s. To take on the startup disruptors and remain relevant and viable requires a new mindset built around lean-agile practices and principles.
The rewards of going agile can be transformative but there are many hurdles for traditional organizations to overcome in this journey. In the case of financial services, one of the biggest challenges is the fact that there’s quite a bit of compartmentalization within the business. Different product-lines, credit cards and mortgages for example, and different departments, marketing and legal, for example, don’t collaborate or communicate effectively with each other. Other problems include the complicated internal IT infrastructure and applications landscape that has evolved from when M&A activity has been a path used to grow and scale the business.
To meet these challenges, banks need to define their vision, identify the internal impediments to agility, and create an enterprise transformation roadmap to overcome them. Leaders must remember that the goal of agile transformation is to create customer value quickly. To achieve this they should establish cross-functional teams organized around discrete pieces of the customer experience and work quickly to trial ideas and find innovative solutions.
It’s paramount that banks make sure that they adopt modern IT architecture and application design patterns and their IT infrastructure is up-to-date and where necessary upgraded to support the agile deployment of new products. Product engineers must adopt a culture of automated systems that converting manual technology work into automated work wherever possible.
If you’re looking for ideas to help you embrace agile principles, here are four suggestions:
1. Organize teams by features: Make sure your teams focus on customer journeys, mapping, and improving a consumer’s experience at every step of his or her interaction with the bank. That will ensure you’re able to spot trends quickly and solve new challenges before others in the industry. This approach eliminates activities that don’t add value.
2. Develop team skills to analyze and improve customer value streams: Team members need to understand what tasks add value. They must ask which processes are central to the banks operations and where handoffs are happening. Cross-functional teams should include members from all parts of the business that have an impact on bank processes.
3. Scale those agile skills: Your chances of success will improve if you start small and prove the value of agile before replicating elsewhere. If the entire organization is to become skilled in agile practices it will require extensive training and coaching by agile experts. This creates a framework for rolling out agile.
4. Build once, use many times: Banks are ripe for proliferation of product innovation. In other words, once a hit feature has been found the strategy should be to find ways of reusing it in other parts of the business.
To learn more about going agile and some of the implications and benefits for your business, read my article Fending off the FinTechs: How Agile Financial Services Firms are Transforming Their Businesses in the latest edition of our management journal, Perspectives.