The Banking Industry's Digital Big Bang

January 31st 2014

The topic of Digital Disruption has generated a lot of buzz in the industry because of a couple of key reasons:

  • Digital Disruption is upending the way consumers and customers of financial and insurance products are researching and accessing information on their life investments, meaning that professionals in the industry have to step up their digital presence to attract new clients, and service existing ones.
  • Like professional services, this IP based industry is undergoing a paradigm shift with aggregation sites like iSelect.com.au and friendsurance.com effectively commoditising the offerings of advisors, agents and brokers
  • The barriers to entry are low, and customer expectations post-GFC are incredibly high, which puts pressure on financial advisors and insurance professionals to engage customers across multiple channels of communications, not just in 1:1 sessions that are Face2Face.

According to this research from Deloitte, digital disruption will continue to impact the industry, as you can see in the bar on the extreme right.

Deloitte has come up with an interesting and useful scenario planning device for digital disruption that they refer to as Short Fuse, Big Bang. Imagine for a moment on an X-axis the length of a fuse to a bang - it can either be short, indicating a 0-2 year time span - or long, indicating a 2-5 year perspective. And on the Y-axis, you can imagine the size of the bang, either small towards the bottom of the Y-axis, or big, towards the top of the Y-axis.

As you can see finance sits in the same category as other industries who are being severely digitally disrupted, like Real Estate, ICT, Media, and Retail.

The fuse is short, and the bang is big - in other words, digital disruption is going to shape the finance and insurance industry massively over the coming years.

At the Million Dollar Round Table, I advised global financial advisors and insurance professionals to take a Digilogue approach to the challenge of digital disruption. What does this mean? Check out the following table to get a sense of the premiere channels of communications for the industry. The one on the left is primarly old school, analogue, and indicates how the industry has been connecting with clients for years, and the one on the right indicates digital channels of communications, which the customer is increasingly expecting from their advisors.

The key is to be able to combine digital and analogue ways of communication, and sit at the translational sweetspot - the Digilogue.

Being able to combine two primary modes of communications in your omni-channel mix is going to be essential for the future, and the financial advisory and insurance space have been laggards in this regard. It is now time to step up - the question is whether the industry is ready for it?

Mindsets need to shift, and it is equally important to remember not to throw out the analogue baby with the digital bathwater.

What do you think?

  • Is your industry being digitally disrupted?
  • Is the fuse going to be long or short?
  • What is the size of the bang?
  • How are you engaging clients and prospects across communication channels?

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The Banking Industry's Digital Big Bang
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