Transitioning to the digital economy
Now is the time that corporates can make a positive contribution to society beyond economic gains because of the fourth industrial revolution and the Covid-19 pandemic.
As they shoulder more responsibility for human progress, companies have a crucial obligation to map the way forward amid this shift to the digital economy.
Digitisation has sparked a marked adjustment in power away from corporates – financial services organisations included – towards clients, other stakeholders and society at large. Changes in societal habits have made products more commoditised, with great personalised client experiences and affinity towards a common purpose taking over as new competitive advantages.
This puts clients firmly in the driver’s seat. It also means that while many tasks will be rendered obsolete in the fourth industrial revolution, particularly as repetitive tasks are automated, human capital will not lose its value – jobs will be restructured, and new opportunities will emerge. After all, it’s people who generate ideas!
Digitisation is no match for uniquely human skills such as empathy, emotional intelligence, contextual insight, creativity and thoughtfulness.
These ‘soft’ skills, which are in abundance across Africa, will become increasingly important in a client-centric world in which financial services groups evolve into diversified services organisations that provide far more than just financial services.
Human interaction will remain a key function of successful financial services groups, with branches becoming increasingly less transaction-focused and far more about positive client experiences and advice.
Demand for harder skills in the computing, behavioural economics and mathematical fields is also surging. Data analysts, for instance, have a major role to play in understanding each client so that their needs can be identified and met. Information security analysts and database and network professionals are also in the crosshairs of the financial services industry. So too are people in the neuroscience world, who are needed to help organisations understand their clients’ needs, behaviours and aspirations.
Since these skillsets are far removed from those that the industry has traditionally relied on, companies in the sector will fail their employees if they do not help them to remain relevant into the future, and organisations need to ensure that their leadership teams are equipped to lead and manage continuous change.
Targeted training programmes, alongside ongoing efforts to clearly narrate the way forward, should be the order of the day. New skills must be taught, including the art of learning itself. Learning, unlearning, and re-learning will be key to future success. Leaders don’t only lead change – they too have to evolve with the changes.
Employees who join this journey will be prepared for a vastly changed – but far more empowering – future of work.
At the same time – and as products and services become more personalised while organisations become a part of ecosystems – our stakeholders will need to become increasingly cognisant of changes in society and in individual preferences towards the workplace. Trends such as remote working, career sabbaticals, employees holding two jobs so that different wants and needs can be met, and people having multi-faceted careers, should not be overlooked.
For organisations that get it right, the digital economy will facilitate deeper long-term relationships with clients, particularly as these companies build ecosystems of partners that can fulfil different client needs instantly.
Rather than turning to a bank for foreign exchange only, a traveller may use the bank’s ecosystem to manage a trip from end to end, for instance. An agricultural client may rely on a financial services organisation and its partners for everything from satellite imagery to fertilisers and finding a buyer – with the integrity of both parties and the product vetted by the banking partner.
This approach to platform thinking will bolster the client proposition and safeguard the long-term sustainability of financial services organisations as walls between industries start to crumble. This process is well underway in Africa. In this regard, we are seeing financial services organisations embracing platform business models – where they uses technology to connect people, organisations and resources, in ecosystems, to exchange goods and services. The continent’s highly innovative mobile-money market, for example, reflects the convergence of telecommunications, financial services and other sectors such as energy.
Unencumbered by a lack of legacy systems and processes, and with its resourceful and youthful population, Africa is certainly no laggard in the digital platform economy.
The platform operating model will also benefit financial services organisations by allowing them to generate new revenue streams through their ecosystems. Partner organisations will grow together, and banks may well choose to participate in ecosystems that they either own or do not control.
This is an opportune time for financial services organisations to reflect deeply on their client propositions and to contemplate the impact of fintech and bigtech on their industry. Financial services organisations need to move much further into the daily lives of their customers by providing solutions and services that meet their various needs.
Rod Poole, Group Head of Change and Business Transformation at Standard Bank
For more visit the African Platform Business Economy page