Companies that want to stay afloat in 2024 and beyond need a future-proof digital transformation strategy. How to modernize legacy software and drive value through technology at scale without complicating every change along the way? This article provides a step-by-step guide demonstrating a proven digitization plan for varoius companies, among others: banks, insurers, and other financial organizations.
A QUICK SUMMARY – FOR THE BUSY ONES
A successful digital transformation strategy aligns digital initiatives with business goals, leverages the right technologies (like AI and machine learning or cloud computing), and addresses regional compliance needs. Key steps include assessing current capabilities, adopting digital solutions, creating a detailed roadmap, and ensuring effective execution with continuous iteration. Prioritizing cybersecurity and sustainability is essential, especially in regions like the DACH, USA, and EU. Without a clear strategy, efforts can become fragmented, leading to wasted resources and missed opportunities.
TABLE OF CONTENTS
This simple instruction is divided into essential stages to walk through when crafting digital transformation strategies tailored specifically for money-handling brands. We’ve put a strong focus on leveraging the power of digital and new technology advancements and crafting valuable offers for end customers. We’ll also explain the benefits of outsourcing digital transformation efforts to vendors in Poland.
Before diving into the exciting strategizing process, it’s essential to understand why digital transformation is imperative - especially for companies from the financial industry and healthcare. Outdated processes, legacy systems, and inefficient workflows pose modernization challenges, decrease internal productivity, and lead to missed opportunities for expansion. Especially today, when market changes are impossible to predict early on and are often driven by the emergence of disruptive technologies. Optimizing business processes is crucial for streamlining workflows, enhancing efficiency, and achieving overall business goals. Swift adaptation is a must to avoid the risk of falling behind.
Each company will have a slightly different reason to kickstart the digital transformation journey. However, most of them will be motivated by the promise of streamlined operations, cost savings, improved decision-making, and a competitive edge. Digitization is also crucial for customer-centric finance brands that want to attract more customers. Modern consumers have high expectations of software solutions, and they pick financial apps that meet their rigorous criteria: accessible UI, feature-rich UX, convenience, and useful additional functionalities. It’s impossible to deliver such digital products without a proper digital strategy.
A digital transformation strategy is a comprehensive plan that guides an organization through the process of integrating digital technologies across all areas of its business. This strategy involves rethinking and redesigning operations, customer experiences, and business models to drive innovation, enhance efficiency, and create new business value in the digital age.
A well-defined digital transformation strategy serves as a crucial guide, aligning digital initiatives with broader business goals while ensuring resources are used efficiently. For instance, such a strategy enables organizations to meet customer expectations, streamline operations, and stay ahead of market disruptions. Without a clear plan, digital transformation efforts can easily become fragmented, leading to wasted investments and missed opportunities.
Digital transformation doesn't have to be complicated. Putting some extra time into the initial preparations can be a game-changer. Let's take a closer look at each stage that digital transformation requires and how it should be executed to achieve goals and exceed expectations:
Although we've mentioned several advantages of digitization, it's important to define priority goals in the first place. Identifying business areas that can benefit the most from changes and defining clear, achievable to-dos will set the direction for the whole process.
Some companies will have to begin with enhancing customer experiences to decrease turnover and increase lifetime value. Others will have to focus on internal efficiency to reduce bottlenecks and improve operational results. Additionally, some organizations may need to prioritize compliance and risk management, especially in highly regulated industries, considering different regional regulatory frameworks such as GDPR in the EU and sector-specific rules in the USA and DACH region. A digital transformation strategy can also help unlock new revenue streams. Finding a way to synchronize these objectives with overall business goals allows organizations to plan the transformation and find resources to go through it successfully.
Various companies are in very different states of technological advancement. Assessing the current situation and filling the gaps would be the first step towards successful digital transformation initiatives. Evaluating existing systems and internal infrastructure, as well as the skills required to introduce changes, will showcase what should be the strategy scope and what is required to execute it. This stage should consider factors such as security and compliance requirements that are extremely important for the financial sector.
Digital technologies play a pivotal role in the success of a organization's digital transformation strategy. By harnessing tools like cloud computing, AI, data analytics, and IoT, businesses can revolutionize their operations, enhance customer experiences, and unlock new revenue streams. For example, cloud platforms enable scalable infrastructure that supports agile development and quick adaptation to market changes, while AI and data analytics provide actionable insights that drive decision-making and innovation. Without integrating the right digital technologies, even the best strategies can fall short, as these tools are essential for optimizing processes and improving efficiency.
This is also the best moment to measure technical debt and define its influence on the business. The State of Software Modernization 2024 Report proves that accumulated technical debt is the biggest problem for companies that want to modernize their software. To proceed with digital transformation, financial companies have to be aware of the impact their old systems have on their operations and include modernization of existing technology in their general strategies.
A comprehensive assessment should include an analysis of the company’s digital maturity level, identifying areas where digital initiatives can create the most value. Benchmarking against industry peers can provide valuable insights into where the company stands and what advancements are needed to stay competitive, especially in diverse regions like the DACH, USA, and EU. Regional preferences, such as the preference for local cloud providers in the DACH region due to data sovereignty concerns, should also be taken into account.
Developing a clear governance framework to oversee the transformation process is also crucial at this stage. This framework should define roles, responsibilities, and decision-making authority across all involved teams and stakeholders, tailored to the regional and cultural context.
With goals defined and capabilities assessed, it's time to create a roadmap of changes that will be implemented during the digital transformation initiative. Every part of the project should be divided into manageable phases, with clearly stated priorities that correspond with initial objectives. Establishing metrics for measuring the progress and results of each activity is a must-have.
Research from the State of Software Modernization 2024 Report shows that only 29% of organizations include all key stakeholders to cross-functionally kickstart the software modernization and digital transformation process. We recommend betting on this approach to make sure all interested parties are included in the decision-making processes and their needs are addressed.
The roadmap should also include a risk management plan to anticipate and mitigate potential obstacles, which may vary across regions due to differing regulatory and cultural landscapes. This plan needs to identify potential risks early, estimate their impact, and outline contingency strategies to ensure the transformation stays on track. Additionally, defining key performance indicators (KPIs) and timelines for achieving milestones will help in tracking progress and maintaining momentum. Regional variations, such as sustainability metrics in the EU and DACH, should also be considered.
Digital transformation strategy success relies strongly on tech stack, adequate IT talent, and efficient project management. Optimizing software development and delivery is essential to drive innovation into the company, while also ensuring the scalability, flexibility, and longevity of the digital systems used. Adopting practices such as Prince2Agile development (mentioned in this delivery promise video) and DevOps can speed up time-to-market, improve team collaboration, and provide alignment between various departments involved in the process.
During execution, it’s essential to maintain open lines of communication across all teams, especially when dealing with culturally diverse regions like the DACH, USA, and EU. Regular updates, feedback loops, and iterative testing ensure that the project stays aligned with business goals and can quickly adapt to any changes in the market or internal requirements. Leveraging data analytics and AI-driven insights can further enhance decision-making and enable more accurate forecasting and resource allocation. Additionally, sustainability initiatives should be integrated into the business strategy too, particularly in the EU and DACH regions where they are a priority.
Moreover, CTOs should consider the evolving cybersecurity threat landscape, which can vary across regions. Implementing a Zero Trust architecture and continuously assessing security measures are critical to protecting the business throughout the transformation process. Additionally, sustainability considerations should be integrated into the transformation strategy, especially in regions where they are a strategic priority, such as the EU and DACH.
Digital transformation is not a one-time project but an ongoing journey. After the initial implementation, it's crucial to regularly review and refine the strategy to keep pace with evolving business needs, technological advancements, and market dynamics. Continuous iteration and adaptation involve assessing the effectiveness of current processes, identifying areas for improvement, and making necessary adjustments. This approach ensures that the transformation remains relevant and continues to deliver value over time.
CTOs should establish a culture of continuous improvement, where feedback loops and performance metrics guide the evolution of accelerated digital transformation initiatives. Regularly revisiting goals, updating technologies, and scaling successful solutions across the organization are key practices. By embracing flexibility and remaining responsive to change, organizations can maintain a competitive edge and ensure long-term success in their digital transformation journey.
<span class="colorbox1" fs-test-element="box1"><p>Find the right company to help you with modernizing your product - check out this list of 10+ top digital transformation companies recommended by experts.</p></span>
Strategic alignment is crucial
A well-defined digital transformation strategy aligns digital initiatives with broader business objectives, ensuring efficient use of resources and preventing fragmented efforts that lead to wasted investments and missed opportunities.
Prioritization of goals
Identifying and prioritizing transformation goals - whether enhancing customer experience, improving operational efficiency, or meeting compliance needs—is essential. These goals should be aligned with both organizational objectives and regional regulatory frameworks like GDPR.
Assessment of current capabilities
Thoroughly evaluating existing IT infrastructure, digital maturity, and skills gaps is the foundation of a successful transformation. Understanding where the company stands in comparison to industry peers helps in identifying areas of improvement and opportunities for growth.
Integration of digital technologies
Leveraging digital technologies such as cloud computing, AI, data analytics, and IoT is key to optimizing operations, driving innovation, and achieving strategic goals. Selecting the right technologies is crucial for ensuring the success of the transformation.
Comprehensive roadmap and risk management
Developing a detailed implementation roadmap with clear phases, priorities, and risk management strategies helps in navigating potential obstacles and maintaining momentum throughout the transformation process.
Effective execution and communication
Successful execution relies on an optimal tech stack, skilled IT talent, and open communication across teams, particularly in diverse regions. Regular updates, feedback loops, and adaptability are vital to keeping the transformation on track.
Continuous iteration and adaptation
Digital transformation is an ongoing journey. Regularly reviewing and refining the strategy ensures it remains relevant and continues to deliver value. Flexibility and responsiveness to change are key to long-term success.
Cybersecurity and sustainability considerations
As businesses transform, addressing the evolving cybersecurity landscape and integrating sustainability initiatives are increasingly important, particularly in regions where these factors are strategic priorities.
Poland is a tech powerhouse that has been considered one of the best global tech locations for years, which directly corresponds with the fact that decision-makers trust Polish IT vendors with software development. In 2023, Emerging Europe compared Poland to Silicon Valley, and the country invested a lot of money and effort into retaining the role of Europe's technological hub. Government and foreign entities support Polish tech initiatives and educational programs focused on science, technology, engineering, and mathematics (STEM) are extremely popular, as well as well-funded.
Polish software houses deliver high-quality, cutting-edge solutions, proving they are worth hiring. Together with a central location in this part of the world, as well as competitive hourly rates and strong English skills, Poland remains an attractive location for financial brands that want to outsource their digital transformation projects and strategies. By partnering with experienced outsourcing providers from this country, companies can access top talent, optimize their budgets, and meet project timelines while maintaining control over quality.
Looking for a company to modernize your product? Try checking out the rankings, e.g. the list of 10+ top digital transformation companies recommended by experts.
There are several innovations offered by the digital realm that banks use to boost their customer experiences, improve security, enhance internal productivity, and achieve revenue growth goals. For example, biometrics proved to be useful in financial software by providing safety for customers' assets and significantly increasing convenience. Facial recognition and fingerprint scanners are standard in banking apps, helping consumers to log in to their accounts and confirm transactions.
Another trend that is adopted by many banks is Robotic Process Automation (RPA). Thanks to “hiring” robots as employees, financial organizations can free their workforces from mundane tasks. From chatbots and voice bots used in customer support to research agents that help with finding relevant data, RPA is appreciated across the industry, including big players like Axis Bank, Deutsche Bank, and BNP Paribas.
Banking-as-a-Service (BaaS) and the utilization of value-added services are other trends that power up digital transformation strategies for many money-related brands. Creating financial infrastructures for other providers or building hub apps with multiple features are both approaches that require thought-through business plans and elevated development processes.
<span class="colorbox1" fs-test-element="box1"><p>Check out more examples of successful digital transformation with prominent examples like Lego, IKEA, Nike, Disney, Microsoft, and Audi.</p></span>
Digital transformation doesn't have to be complicated or time-consuming. Establishing goals that correspond with current business challenges, planning changes to eliminate these difficulties, and finding the right technologies with a competent team that can use them to produce extraordinary results are the steps to take that will lead to spectacular results and help reach the new heights of leadership in the financial sector.
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Authors
Software development enthusiast with 7 years of professional experience in the tech industry. Experienced in outsourcing market analysis, with a special focus on nearshoring. In the meantime, our expert in explaining tech, business, and digital topics in an accessible way. Writer and translator after hours.
With over 12 years of professional experience in the tech industry. Technology passionate, geek, and the co-founder of Brainhub. Combines his tech expertise with business knowledge.
Software development enthusiast with 7 years of professional experience in the tech industry. Experienced in outsourcing market analysis, with a special focus on nearshoring. In the meantime, our expert in explaining tech, business, and digital topics in an accessible way. Writer and translator after hours.
With over 12 years of professional experience in the tech industry. Technology passionate, geek, and the co-founder of Brainhub. Combines his tech expertise with business knowledge.
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