The impact of the pandemic has been pushing financial services organizations to rapidly deploy digital solutions to mitigate (what seems like) a short-term challenge in the digital landscape. Recent data shows that we have jumped five years forward in consumer and business digital adoption in a matter of around eight weeks. The percentage of US consumers who use digital solutions and digital channels for Insurance has increased to 35% in April 2020. This use of digital channels is expected to increase furthermore as we enter the second half of 2020, which means that going digital is no short-term solution for insurers. In fact, according to a June 2020 survey, 54% of US insurance consumers said that using digital solutions such as an insurer’s app should be as easy as using Facebook and Instagram. The post-pandemic consumer will expect insurers to meet such evolved digital expectations.
Two Converging Paths
When it comes to digital transformation, there are two concurrent, converging paths – Technology & People. While Insurers accelerate the transformation of their digital landscape to outlast the current disruption, they often miss a talent strategy that develops the digital and cognitive capabilities needed to re-calibrate the adaptability and resilience of their workforce. Developing this muscle will also strengthen companies for future disruptions with digital disruptions. A re-calibrated workforce that is subjected to consistent re-skilling will be the key to successfully delivering digital transformation and value that reflects in balance sheets and the market share.
Digital Dexterity - A High Priority in the CIO’s Agenda
In 2020, the World Economic Forum foresees a significant increase in AI-enabled jobs worldwide in the next two years. A significantly large proportion of financial services employees subconsciously resist digital transformation because it could threaten their jobs. Data shows that a quarter of US employees fear the possibility of their jobs becoming obsolete as AI-based technology replaces tasks that are currently done by them. Investing in the re-skilling of the workforce before disruption strikes again will not only eradicate that fear but will also enable a digital disruption and a culture of unlearning and re-learning that is critical to the adoption of the many ‘New Normals’ that lie ahead.
COVID-19 has caused a surge remote working, making physically fragmented-digitally connected teams the new normal in Financial Services, today. As a strategy, CIOs must invest in workforce re-calibration as part of their high priorities to make themselves ‘digitally dexterous’ as an organization.
Gartner coined the term ‘Digital Dexterity’ in late 2018, but it is more relevant today due to the disruption that the financial services Industry is seeing due to COVID-19. It is defined as an organization’s ability and ambition to use existing and emerging technologies for better business outcomes. Becoming digitally dexterous requires organizations have the workforce adopt upcoming consumer technologies by maximizing continuous learning and re-skilling with hands-on digital experiences.
Some financial services institutions have recognized the latent need for such practices. An American multinational bank recently invested $350m at a global scale to address skills gaps at scale and build a future-ready workforce. One of the largest property-casualty insurers in the United States is taking measures to empower the workforce with the right skills to adapt quickly to an evolving marketplace, and rightly so. This phenomenon is expected to inevitably spread as more insurers and banks struggle to sustain the loyalty of their own customers, who are now evolving into digital-savvy consumers with bigger digital expectations that need to be catered.
Digital-savvy consumers will soon expect digital experiences/services that are fast, seamless, and personalized. This surge in digital expectations would lead to an increase in brand switching depending on the digital experiences they provide. Therefore, it becomes critical for financial services organizations to make their workforce digitally dexterous to help sustain the loyalty of the digital-savvy consumer, and to harness the true potential and value of digital disruption and digital transformation.