The Coronavirus pandemic is fast-tracking the need for digital transformation: A somewhat daunting task, but an imperative measure in today’s business climate.
At Kuelap, we have broken down what the digital transformation means for financial cooperatives, and created a 4 stage process to achieve digital transformation.
Digital transformation is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements.
The digital transformation is a strategically vital initiative for cooperatives. It allows cooperatives to adequately meet the pressures confronting them, overcome those barriers, and thrive in the modern age. The strategic benefits of digital transformation are unlocked as each new system or process is implemented by the cooperative.
The first stage of the digital transformation is to create a digital foundation for the cooperative. This means switching from the obsolete systems and processes which hold the cooperative back to modern ones which push it forward.
Core banking – Sustainability
The first step in the entire digital transformation process is for the cooperative to adopt a modern core banking platform. This step enables the long-term success and sustainability of the cooperative as it truly enables the following steps of the digital transformation.
Modern operations – Efficiency
After adopting a modern core system, the cooperative must modernize and digitize its operations. With modern operations come modern levels of efficiency. The time saved by these processes allow the cooperative’s staff to focus on what is truly important – serving members. An additional benefit of modern systems is a higher level of accuracy during data capture related tasks. This reduces errors and leaves the cooperative running smoothly.
Once a digital foundation has been established, the cooperative can begin to capitalize on this success. The second stage of the digital transformation involves leveraging the cooperative’s data in order to empower both the coop’s regulators and its management. The implementation of powerful reporting engines and the know-how to utilize them empowers the cooperative and its stakeholders.
Reporting – Compliance
The first step in this stage is the adoption of a system which allows for data capture and presentation. With this system in place, cooperatives can automate their managerial and regulatory reporting obligations. This increases compliance while reducing impact on the cooperative.
Additionally, it paves the way for future advancements in regulatory capabilities. Modern data management systems allow regulators and apex organizations to pull real-time reports via a regulatory portal – granting powerful knowledge to these oversight bodies.
Business intelligence – Insight
Once new data management systems are implemented, cooperative managers can begin to use those systems in ways which go beyond simple compliance. During this step of the digital transformation, managers learn how to use powerful reports and dashboards to monitor and measure their operations, and make the cooperative more profitable and sustainable.
The “Mobile cooperative” stage sees the the cooperative alter its modes of interaction with its members with an emphasis on mobile engagement. With a shift towards mobile, cooperatives will be able to reach new and existing members where they are – on their phones. This stage allows the cooperative to become something truly revolutionary.
Mobile services – Outreach
To go mobile, the cooperative must first implement mobile services. These services – such as self-service apps, mobile loan applications, member-to-member transfers, etc. – allow members to conduct business with the cooperative through their mobile devices. By minimizing the need for members to physically be in the branch to conduct routine transactions, these services significantly expand the reach of the cooperative
Mobile-first operations – Engagement
With mobile services implemented, the cooperative can begin to dramatically reshape itself. It can shift its relationships with members to a “mobile-first” basis.
A “mobile-first” cooperative emphasizes mobile as its primary method of interacting with its members. Simple transactions can be handled by members at their convenience on their mobile devices. Members only need to interact in-person with the cooperative for more complex financial decisions.
This style of operations will significantly deepen member engagement, resulting in a higher quality of membership.
Finally, with all other stages of the digital transformation complete, the cooperative will be able to successfully integrate new fintech services and provide them to its members.
Fintech – Growth
As new services are introduced into the market, the institution can pick and choose which it wants to offer its members. This means that the institution is constantly at the forefront of financial technology and innovation. This position will allow the cooperative to see its active membership grow as new members are drawn to the new services.