New PwC research reveals that too few financial services businesses are executing the transformation of their Front Office processes with complete success. How can the sector get better at transformation?
Insurance companies are most likely to have struggled: 70% say that their transformation efforts have been only somewhat successful, and 30% say that they were successful. Banking fared better, but still the majority (51%) say that their Front Office Transformations had been only somewhat successful. The huge pressure on the financial services sector from their demanding customers and from new competitors means that Front Office Transformation is a priority. But that does not mean transformation for transformation’s sake: it is essential that companies in the sector do it right. Our research shows that there are three areas of focus that will contribute to a more successful transformation.
What is Front Office Transformation? A major project to transform the business processes and technologies used to identify, engage, sell to, service, and retain customers – across sales, marketing, service, and support.
It starts with culture. Almost every business in the sector (99%) says that transformation was a major cultural challenge for their employees. Fewer than a third (31%) say that they had been ‘very clear’ about the type of culture they wanted to build with their initiative. This has led to a view among employees that transformation is not something to take seriously: nine in ten financial services companies (91%) say that employees saw their transformation as a side project, and not as a major company initiative. This is concerning, and could explain why the majority of the sector say that their Front Office Transformation was only somewhat successful.
Developing a people-centric culture is a key success factor in transforming the front office across the board: 63% of the companies that strongly believe that their transformation put people ahead of technology say that their Front Office Transformation was a success, compared with 52% of all companies. An important element of developing a people-centric culture is clearly communicating the benefits employees will receive if they partake in transforming the front office. This can be achieved through greater engagement at the top.
Greater engagement from senior leadership may help to close the culture gap. Our research shows that heavy senior leadership involvement is a major success factor in transforming the front office processes: 68% of companies whose senior leadership were fairly or heavily involved in the transformation process say that their project was a success, compared with only 45% of companies whose senior team was not actively involved.
Among financial services companies, just 27% say senior leaders were fairly or heavily involved in Front Office Transformation. To really make their transformations worthwhile, financial services businesses will have to ensure that their senior leadership does not just endorse the project, but also participates in it actively – and has a vested interest in its success.
Involve everyone for Front Office Transformation success. In practice, it is not enough for financial services firms to take any of these measures in isolation.
Another way forward for many financial services companies may be to embrace employee engagement more broadly, and explore new ways to encourage every customer-facing staff member to embrace transformation projects. Currently, financial services companies are more likely than most of their counterparts in other sectors to rely on traditional classroom training to get staff on board with transformation.
Our research shows that innovation around enablement may generate transformation gains: across all sectors, 70% of companies experiencing success in their transformation projects had used experience-based learning, for example, while only 47% of only partially successful companies had tried it. Ultimately, it is down to the employees of a company to transform the customer experience. So it is essential that as they pursue tranformation, financial services companies enable, engage, and enthuse their workforces.
The financial services sector is under particular pressure to transform, but too few financial services businesses are successful.
Managing Partner Digital Intelligence and Customer Centric Transformation, PwC Switzerland
Tel: +41 58 792 42 15
Partner FS Technology Consulting, PwC Switzerland
Tel: +41 58 792 47 97