What role does senior personnel play in banking digital transformation?

Digital transformation in the banking industry is happening strongly and has made significant progress recently. An important part contributing to the initial success comes from the vision and active participation of senior leadership personnel (C-Suite). So how important and influential is senior leaders in banking digital transformation?

Impact of digital transformation in the banking industry

When talking about digital transformation, we cannot help but mention the Banking industry - an industry group that has determined to focus capital, technology, and human resources for digital transformation activities very early on.

Vietnamese commercial banks are demonstrating their agility with digital banking trends, shown by the fact that most domestic banks have digitalization strategies and orientations for digital banking development. Based on the diversity of financial situation, operating methods, and key strategies, each bank chooses for itself an appropriate digital transformation model.

Thanks to digital transformation, banks in Vietnam have initially reaped notable successes. There are a number of pioneering banks applying digital transformation that have achieved more than 90% of customer transactions performed on electronic channels, with many banking operations from basic to complex such as opening payment accounts and making payments. Money transfer, deposit/savings have been 100% digitized.

From another perspective, many credit institutions have improved operational efficiency thanks to digital transformation, reducing the Cost to Income Ratio (CIR) to below 30%. This ratio is the goal that many regional and international banks are trying to achieve through digital transformation. Regarding coverage, about 75% of adults today have at least one bank account; More than 3.7 million Mobile-Money accounts were opened, of which more than 70% were opened in rural and remote areas (SBV, 2023).

Difficulties and challenges in digital transformation in the banking industry

However, in general, digital transformation activities in Vietnam Commercial Banks are only in the early stages in many aspects including infrastructure, digital human resources, security requirements and building a culture of innovation. .

Some banks are still facing limitations in information technology infrastructure. Upgrading and investing in technology infrastructure is one of the basic challenges to create a favorable environment to promote digital transformation.

In addition, digital transformation requires the availability of human resources with technological knowledge and skills. Some Banks are facing the challenge of training and developing human resources to ensure employees are capable of using and managing digital technology.

In addition, although digital transformation brings many benefits, it also means increased risks in information security and network security. Banks need to apply strong security measures and effective risk management to ensure the safety of customers and the banking system.

Last but not least, digital transformation not only involves technology but also requires a change in organizational culture; Banks need to build a culture of creativity, flexibility and pioneering thinking to encourage employees to participate and contribute to the digital transformation process.

Therefore, leaders (C-suite) - decision makers who play a major role at banks - need to face and "cope" with the challenges of "transformation".

The role of leadership in digital transformation in the banking industry

Digital transformation, like other strategic problems, success lies in thinking and having long-term vision, direction, and strategy from the executive levels. Therefore, the role of leadership in digital transformation is paramount.

Overall, the role of the C-suite in digital transformation in the banking industry is to create strategic direction, build a supportive environment and ensure technology integration, thereby enhancing customer experience, improving processes and create new value for the bank:

Planning a digital transformation strategy: The C-suite plays an important role in shaping the bank's digital transformation strategy. Not only providing solutions but also posing the right problems, leaders need to identify problems that can be solved with digital transformation. In particular, complex banking activities with many strict requirements from legal to internal administration make "catching diseases" more difficult. The sooner you can see the problem, build a digital transformation roadmap and develop digital transformation solutions, the better your business will have a chance to break through and lead the market, especially in a period of continuous IT change. like nowadays.

Managing change throughout the implementation process: Transforming the Digital Transformation roadmap into solutions and successful implementation at banks requires commitment, perseverance and closeness. PWC points out that transformation projects at banks with good change management programs can increase project progress, optimize costs and ensure the project achieves the set results.

Managing change in organizational culture: Digital culture will gradually be formed on the digital transformation roadmap of businesses, when businesses apply technologies in their operations and operations. Technology impacts and changes the way of connection within and between departments, the beliefs and attitudes of each employee towards the overall organization. However, the success of this depends on the determination of the leadership. In order for all personnel to adapt to technological developments, leadership plays an extended role in encouraging creativity and innovative thinking to traditional work styles and workflows.

Ensuring technical and technological factors: C-suite ensures integration and compatibility between technology systems and applications in the bank. This helps optimize the work process, improve efficiency and thereby create a better customer experience.

Risk management and security: Customer data is considered the largest asset at banks. The C-suite is responsible for ensuring that appropriate security and risk management measures are in place during digital transformation by creating security policies and standards, ensuring information security and comply with relevant regulations.

Conclude

In digital transformation, the "digital" factor is the tip of the iceberg shown above, but the "transformation" factor is the sinking part of the thick iceberg that requires investment in effort, capacity and creativity for banks. goods during implementation. Therefore, C-Suite at banks needs to understand their paramount role throughout the Digital Transformation process from building roadmaps, implementation, building culture, managing change... to ensure ensure the Digital Transformation process goes smoothly, bringing success as planned.

Reference source: Summary

Compiled by the DTSVN author group - Digital transformation solutions for the Finance and Banking industry.

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