Who Owns Digital? Ugh, That’s the Problem for Bankers

The lack of ownership in driving digital transformation is a huge roadblock for financial institutions.

In my digital transformation work with Cornerstone Advisors clients, I often ask executives a simple question: “Who owns digital?” The most common responses are: 1) blank stare, 2) scrunched face of contemplation, and 3) “a lot of different people.” The lack of clear ownership in driving digital transformation represents a huge roadblock for financial institutions fighting to stay relevant.

Why Ownership Matters

Bank executives are coming to understand that in today’s world, the customer experience (CX) is the product, although not all have made a serious commitment to address newfound competition. Among 300 U.S. financial institution executives surveyed for What’s Going On In Banking 2022, 19% of community banks and 10% of credit unions had not launched a digital transformation strategy prior to this year, and another 15% had no plans to do so. The bottom line is this: most banks lack the true management leadership and operating disciplines necessary to execute successfully on digital.

One of the fatal mistakes many institutions make is viewing digital as falling entirely within the domain of I.T. When a bank operates this way, the focus tends to be around operational uptime, security, and incident management while insufficient attention is given to the end-user customer experience. Experience design is a specific skillset that is needed to steer the execution of a bank’s digital strategy. Without this leader in the driver’s seat, banks become either too dependent on slower-moving, outsourced vendors or too fragmented as digital is deployed in silos across different business units.

A successful digital product manager knows how to bring order to the chaos of digital transformation. While these individuals often report to a chief experience officer or digital channel executive, the product manager is the linchpin who operationalizes the bank’s digital strategy.

What Does a Digital Product Manager Do?

A successful digital product manager leads with these key proficiencies:

• Translate the bank’s strategy into a tangible digital road map that identifies the prioritization, sequencing, and dependencies of key initiatives. The team at Cornerstone Advisors is often shocked at how banks spending millions of dollars on technology and digital initiatives do not review a formal digital road map at the executive level. Instead, a bit of constant chaos seems to be the norm. A product manager can help spell out the realities, trade-offs, and mandates with a road map to ensure the entire executive team is aligned on the vision and how it will be executed.
• Design and confirm the target CX that will be deployed and organize which platforms, vendors, customizations, and integrations will be required to achieve targets. While a digital product manager may have operations or I.T. in their background, they must possess the eye of a designer and be able to walk in customers’ shoes with the attention to detail that makes the difference in a winning digital experience.
• Manage execution and especially vendor performance as new releases and features come online. The product manager should ensure regular performance and release reviews are occurring with all vendors and that formal service level agreements are in place to help govern these relationships.
• Act as the evangelist for new digital capabilities. Most vendors do a poor job of communicating new features, capabilities, and best practices of their platforms. The product manager should uncover these capabilities, make recommendations to management, and help raise awareness for the potential business benefits of bringing these features online. Also, most banks fail to budget for enhanced functionality and then hesitate to implement something new that comes with a price tag. Leaders understand that some allocation for unidentified enhancements or “R&D” must be included in the operating budget every year.
• Lead change management efforts including customer communication, internal communication and education, and testing/pilot runs. A communication strategy that explains why changes are being made and how they affect employees helps ensure buy-in from staff. Conducting regular testing and pilot runs can avert undesirable consequences such as wasteful spending, productivity inefficiencies, and damage to the institution’s reputation.
• Conduct formal “competitive shops” of other financial institutions’ digital offerings and features, including national banks, challenger banks, fintechs, and peers. A strong digital product manager can help synthesize and communicate important competitive trends to executive management.
• Most importantly, identify and track/report the business outcomes that must be achieved with the execution of the digital road map. These outcomes can include enhanced customer satisfaction, greater adoption, increased sales/cross-sell, and improved efficiencies through self-service automation.

While digital product managers need to focus on the strategy and prioritize business outcomes, they also must have the grit to dive into the details of operations. There is simply no “plug and play” implementation for digital – it’s complex and hard work. In fact, having deep knowledge of the configuration and interfaces of digital platforms is one of the most critical success factors for this leader. Many embarrassing customer incidents or precarious security holes can be traced back to incorrect configuration or fragile interfaces. The digital product manager must live by the mantra, “God is in the details.”

Where Do I Find These “Unicorns”?

In seeking out professionals to lead digital product management, there is not one exact formula. Instead, it’s a mixture of skills, qualities, and strengths:

• The most vital characteristic seems to be someone who can naturally traverse the strategic and operational levels of the bank. Strong digital product managers figure out how the complex smattering of core and digital systems work together and how to make progress despite this “messy” reality.
• This is also a leadership role that requires visible passion – banks are looking for a person that is excited about digital possibilities and tenacious about improving the customer experience.
• Great digital product managers possess a curious and skeptical mind to dig into the truth behind vendor promises and scout out the fintech innovations that are gaining steam under the radar today. 
• Finally, it’s vital that digital product managers are flexible and know how to pivot. It is impossible to work in this role and not face mistakes and major issues. Leaders who can spot a concerning situation, react quickly, and turn the event into an institutional learning experience tend to make the bank’s digital strategy more resilient over time.

Own It, Bankers!

While it certainly can fire up the leadership and employees to say, “We all own digital,” such platitudes risk having the bank find itself with no one owning digital. While there are certainly distinct roles around digital that managers in the I.T, marketing, and risk lines of business play, execution will be slow and less crisp without leaders who possess a true product management discipline in the middle. Depending on the banks’ size, the need can arise for multiple digital product managers and “product owners” to address the sheer volume of work, and this formality will help the team scale effectively and keep the customer experience and back office “glued” together as the digital transformation is executed.

Leading banks are providing Agile training and product management career paths for team members, as well as recruiting some CX expertise from outside of banking. Other industries such as software, consumer products, and automotive have led with a product management discipline for decades. It’s time for bankers to realize that this same discipline is what will give flight to every banks’ dream of a fast and effective digital transformation. Own it, GonzoBankers!

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