Home Technology Digital Challenges in Banking Put Onus on a Change of Mindset

Digital Challenges in Banking Put Onus on a Change of Mindset

by internationalbanker

Joakim LundquistBy Joakim Lundquist, Head of Italy, Switzerland and Austria, Comprend



The banking sector is looking down the barrel of its next challenge, and trust is again the order of the day. The challenge is digital banking, and it arises on many fronts: pressure by industry outsiders regarding core businesses of payment transactions, private banking and lending. Digital disruption means traditional banking institutions risk being outflanked by innovative, efficient new players who are digitally native and understand the need for human-centred design when it comes to providing services across borders.

This evolution in the business has important ramifications for corporate communications, for two reasons. Firstly, from an external point of view, digital reduces the traditional divide between the corporate and commercial spheres, meaning a broader range of stakeholders and customers look to understand the organisation behind the brand. Secondly, from an internal point of view, an effective response to digital challenges has to be managed systemically across the organisation, from top management all the way through to customer service.

Seen in this context, corporate communications can be an excellent signal of how digitally savvy an organisation is. And as more users interact with banks’ digital ecosystems, the common denominating factor is credibility. Shareholders will want to be reassured that leadership can manage the transition into digital, and customers will expect banks to provide an effective digital offering. This trust needs to be won through effective communication in terms of both what is said and how.

Digital readiness measured

At Comprend, we have been measuring the performance of corporate websites for 18 years through our annual Webranking survey, a comprehensive study that evaluates corporate websites based on feedback provided annually by 500 financial journalists, analysts and investors in Europe and globally. The answers are used to refine a 140-part protocol that ranks everything from the availability of financial and non-financial information, such as debt, investment strategy, risk management and corporate social responsibility (CSR), to the quality of information about executives and board members. The research also analyses the functionality of websites, and as such the survey can be seen as a “barometer of digital readiness” in corporate communications.

What do our findings tell us about the state of European banks in this regard? As perhaps expected, it’s not encouraging. While we have seen a greater effort in terms of content, it’s taking time for corporate communications to become more social and mobile.

In fact, as digital penetrates further into daily routines and working life, the pressure is on to give all users fast, intuitive access to relevant content. The way that we define being digitally ready is taking the view that human interactions are at the heart of the service you can provide through technology. What our survey tells us is that most companies are moving towards responsive design, which allows a single website to adapt to the screen resolution of different devices.

Therefore, being able to adapt to mobile is a key priority, and with Google recently changing its algorithm to prioritize mobile web pages for search requests on mobile devices, it is crucial that banks move to a more adaptable screen resolution for different devices, to allow their users the digital experience they are after. Our survey shows that banks are behind the curve here: of the top 56 European banks we assessed, only 14 percent have shifted to a responsive website at a corporate level, less than the 24-percent figure for the continent’s top 500 corporations. The few banks that have already made this step (Royal Bank of Scotland, Credit Suisse and UBS, to name a few) represent a small spectrum of a very large industry. This inherent conservatism could be very damaging for banks’ corporate communications.

Social media: an outlet worth investing in

Another key area of improvement is social media. In our research, 83 percent of journalists say they use social media to find information about companies. Yet only 50 percent of European banks indicate their corporate social-media accounts, and only one in four integrate their social-media accounts into their corporate websites. This suggests that most banks do not give due priority to social and digital.

Some banks are taking clear notice of this and have made significant improvements with regards to their social-media activity. For example, Credit Suisse has taken a more proactive approach to social media this year, providing access to a number of social-media outlets on their corporate website and regularly updating their feeds.

That being said, just having a social-media account doesn’t necessarily mean banks are communicating effectively. In fact, a key challenge with regards to creating high-quality content continues to be that of resources: a third of web managers surveyed stated they have only one person working full-time on the corporate website. This is not good enough. In order to create high-quality content, it is necessary to invest in a solid internal structure. The involvement of the bank’s management is crucial in building an organization that can deliver on this. Investment in key resources and talent is therefore key.

In the Webranking communications stress test, content is king

Webranking works like a transparency “stress test”: the stresses in this case originate on the one hand from the demands of the most critical, time-pressed audiences, and on the other hand from the need to gain competitive advantage with respect to their peers. The banks that pass this test demonstrate a minimum ability to govern their reputations in digital channels: they create opportunities to build “premium” status with key stakeholders, which can facilitate access to capital markets and translate into higher trust among customers, the ability to attract the best talent or to set the agenda on the issues of importance to the sector.

As such, the creation and distribution of high-quality content is crucial. Our survey of corporate web managers reveals that the content of the CSR and career sections is considered the most urgent to be improved. These kinds of content are also those most easily shareable via social media since their target audiences go beyond potential consumers.

Fortunately, it looks as if banks are responding to this particular need, with 71 percent of the banks analysed presenting a CSR report, up from 68 percent last year. Considering how corporate responsibility tends to presuppose a long-term view of the business, it is encouraging to see that more than two-thirds of banks are capitalizing on this. Swedish bank Swedbank is a particular standout in this case, outlining its strategy clearly.

Banks risk being outshined by competitors

Getting digital right means remaining competitive. Webranking sheds light on the ability of banks to gain a competitive edge by leveraging digital communications to explain what sets them apart. We will look to next year’s results with great interest, to see if they reveal that they have done just that.

Joakim Lundquist is Head of Italy, Switzerland and Austria for Webranking at Comprend, a digital consulting company based in Stockholm, Sweden. He has held this position since 2003. He is also the Founder and Head of Lundquist, a strategic digital consulting company specialized in financial reporting, investor relations, CSR, investor relations and social media, based in Milan, Italy.

Photo Attribution: © Depositphotos.LDPrdod

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