Banking 4.0: The Digital Industrial Revolution
The fourth industrial revolution is about a technological revolution that is fundamentally changing the way we live, work and relate to one another. In many industries and especially in the banking sector, companies need to embrace all things digital. Industry leaders are taking the next natural step in the progression to become digital entities, seeking additional opportunities for greater efficiencies and increased returns on investments.
This transition has been accelerated over the last eight months due to stay-at-home orders to lessen the impact of the COVID-19 pandemic and the need for companies of all sizes to support remote workforces. Simultaneously, there has been a tremendous consumer shift to digital services to meet their daily and weekly needs. Consumers have become more comfortable relying on technology for everyday needs, including grocery shopping, banking, entertainment, video calls with healthcare providers and much more.
This accelerated adoption of digital services has propelled many businesses, including large and small financial institutions, to implement technological advances sooner than their original three- to five-year plans. At the same time, it is crucial that companies re-evaluate how they operate to stay competitive and relevant as consumers’ habits change and they seek the greatest value at their convenience.
Looking internally at corporate structures and how best to support the rapid changes can have some surprising realizations. The biggest surprise may be that technology oversight is no longer solely the responsibility of the CIO or CTO.
The importance of managing and implementing information and digital technology is not going to disappear. However, the role of embracing new technology and identifying opportunities to introduce greater efficiencies will be part of everyone’s role. This will be the most noticeable trend as businesses move to embrace new technology.
It will no longer be the IT department’s responsibility to identify technology solutions to enhance current operations. Each employee will have to embrace, that as part of their role, they will be expected to identify aspects of their job that can be automated, streamlined or enhanced by digitizing traditional business practices.
Checking off boxes to ensure historical processes are completed will no longer be an indication of job performance. Having the confidence to try new approaches to provide better customer experiences or create productivity efficiencies will become key indicators. Employees will need added support so they have the confidence to try new approaches without the fear of negative consequences if a new process does not go as planned.
Many of the catalysts of the fourth industrial revolution, the Internet of Things (IoT), virtual reality and automation are already part of our lives. IT is no longer in a silo and has become part of our DNA especially for digital natives who grew up with technology, or digital mavericks who embrace tech and the change that it brings. When an app or digital device requires an update, they naturally accept there will be changes. In the same fashion, businesses need to recognize that change is constantly occurring throughout the organization, industry and in consumer preferences.
Our ability to adapt to change due to the COVID pandemic and transitioning to remote work environments reinforces the significance of our digital culture. As the fourth industrial revolution continues to evolve, industry leaders in the banking sector must recognize that our business is based on technology; otherwise, they will find themselves lost very quickly.