22 June 2015
Banking Digitalization – Five Stages of Grief
Head of DataArt Switzerland contributes a timely (and brilliant) blog post to Computer Business Review on the five stages of grief by banks over the matter of digitization - denial, anger, bargaining, depression, acceptance (DABDA).
“Alexander Makeyenkov, Managing Partner at DataArt, talks through the denial around digitalization in the banking industry - comparing it to the five stages of grief in the Kübler-Ross model. According to a report by McKinsey & Company: "Across Europe, retail banks have digitized only 20 to 40 percent of their processes; 90 percent of European banks invest less than 0.5 percent of their total spending on digital. As a result, most have relatively shallow digital offerings focused on enabling basic customer transactions. "Neither customers nor digital upstarts are likely to wait for retail banks to catch up."
Furthermore - McKinsey estimates that banks can remove 20-25 percent of their cost base by leveraging a digital short and becoming more competitive. But still, the banks crawl slowly towards the inevitable change. This must mean that there are deeper, almost pathological cultural reasons for reticence.
Having worked with the banking industry for over 15 years, it is my experience that there is a peculiar reticence in facing up to the changes taking place. And I have heard many strange comments that reveal a certain grieving for the lost age of non-digital banking.”