Capgemini Consulting Digital Transformation in the Banking Industry Retail banking is currently experiencing significant transformations. The relationship between banks and customers is undergoing a change, shifting from the traditional model focused on physical branches to a new, customer-centric and multi-channel approach.

1. Digital Transformation Benchmark - 2012
Insights for the Retail Banking Industry

2. Page 1
Digital Transformation in the Banking Industry
Retail banking is currently experiencing significant transformations. The relationship between banks and
customers is undergoing a change, shifting from the traditional model focused on physical branches to a new,
customer-centric and multi-channel approach. At the same time, banks are questioning their business models
in reaction to systemic threats such as debt, economic crisis and new forms of competition, to name a few.1
Digital technologies play a key role in these fundamental shifts that are progressively reshaping the banking
industry; they enable new customer experiences, create opportunities to improve operational processes or
change business models. Our survey data helps better understand where retail banking stands today in this
transformation and what challenges await the industry on the road ahead.
Figure 1: firms’ positioning in the Digital Maturity Matrix
Interpreting the
Digital Maturity Matrix
• The vertical axis measures “Digital
Intensity,” i.e. firms’ digital
practices
• The horizontal axis measures
“Transformation Management
Intensity,” i.e. the management
practices implemented by the firms
around digital transformation
For more information, read the MIT Center for
Digital Business and Capgemini Consulting
Research Report “Digital Transformation: a
Roadmap for Billion-Dollar Organizations” (2011)
Learning 1: The importance of
Digital Transformation for the
industry is largely acknowledged
An overwhelming majority of
companies state that their
competitive position will suffer if
they do not engage in Digital
Transformation. Most firms have
a positive perception of this
phenomenon: 94% perceive Digital
Transformation as an opportunity,
where only 29% see it as a threat
to their company’s status in the
industry. Over two-thirds of the
companies also anticipate internal
disruptions.
Learning 2: Banks are strong in
customer service and analytics,
which fits the data-driven
mindset of the banking industry
Our data show that banks are
more mature than companies in
other industries in their use of
analytics on the customer front:
targeting marketing more
effectively, optimizing pricing,
qualifying sales prospects (see
Asia & Oceania North America Northern Europe
Southern Europe Average

3. Page 2
Figure 2). Banks also often
leverage mobile for customer
service more than the average.
However, data and technology
platforms are not always
integrated or unified at the
enterprise level, which could be an
obstacle in reaching the next level
of customer service and data
analysis.
Figure 2: customer analytics
Legend:
• Red bars represent the percentage of companies disagreeing with each statement (answers 1, 2 and 3 on a scale from 1 = strongly
disagree to 7 = strongly agree) in the industry; green bars represent the percentage of companies agreeing with each statement
(answers 5, 6, or 7).
• Grey marks represent disagreement (answers 1, 2 or 3) or agreement (answers 5, 6 or 7) across all companies in our study.
Learning 3: Bankers do not
consider mobile to be the primary
contact point with customers
despite the transformative
potential2
of this technology in
the industry
Banks are generally more
advanced than companies in other
industries in providing customer
service through mobile channels.
They are also slightly above-
average in leveraging mobile to
promote products and services.
However, most banks have not yet
realized the transformative
potential2
of mobile in “selling
products and services.”
Learning 4: banks demonstrate a
mostly passive use of social
media
Social media can be an important
tool for banks, especially given the
image concerns associated with
the current financial crises. Social
tools allow firms to engage with
customers more directly, providing
banks greater opportunities to
manage their public image, market
products, or provide service. A
majority of banks surveyed use
social media to monitor
reputation. However, only a
minority uses it proactively to
build communities, to promote or
sell products and services, or to
provide customer service.
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57%
44%
44%
40%
79%
55%
70%
50%
We use analytics to target
marketing more effectively
We use analytics to personalize
marketing communication
We use analytics to qualify potential
sales prospects
We use analytics to optimize pricing
31%
37%
40%
41%
12%
27%
21%
34%

4. Page 3
Learning 5: banks do not fully
harness the potential of digital
technologies to transform their
operational processes
Most banks leverage digital
technologies to improve their
operational processes. A majority
of companies reported digitizing
processes (automation, real-time
monitoring and decision-making –
see Figure 3). Also, 79% reported
offering customer self-service, an
efficient model for customers as
well as for banks’ operations.
However, as in most industries,
only 30% indicate that operational
processes can adapt quickly to
external changes. This may reflect
the common lack of agility across
banks’ legacy systems.
Figure 3: process digitization
Legend:
• Red bars represent the percentage of companies disagreeing with each statement (answers 1, 2 and 3 on a scale from 1 = strongly
disagree to 7 = strongly agree) in the industry; green bars represent the percentage of companies agreeing with each statement
(answers 5, 6, or 7).
• Grey marks represent disagreement (answers 1, 2 or 3) or agreement (answers 5, 6 or 7) across all companies in our study.
Banks have undoubtedly started using digital technologies in many areas and
leverage them extensively to increase the value of existing services, reach out to
new customers or launch new businesses. Other areas such as customization,
as well as advanced use of mobile channels or social media with customers, are
less developed.
For most companies, much remains to be done to transition from a traditional
model to a multi-channel model. 64% of the banks we surveyed indicate that
they are already “actively transitioning from physical products and services to
digital.” Moving forward, most banks may have to reinforce transformation
practices, including:
- Developing a digital vision – 41% of the companies surveyed declare
having a radical vision of how they can use digital transformation to
change their business. This figure is higher than in most other
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Copyright©2012CapgeminiConsultingandMIT-CDB.AllRightsReserved
59%
59%
49%
41%
35%
76%
63%
56%
44%
30%
Our core processes are automated
We use analytics to make better
operational decisions
We monitor our operations in real
time
We design our products and
services digitally
Our operational processes can
adapt quickly to external changes
19%
20%
29%
38%
39%
6%
13%
22%
31%
24%

5. Page 4
industries, but may still be considered low relative to the profound
transformations expected in banking (see Learnings 1 and 3). Banks
may still have an opportunity to regularly revisit their vision as these
transformations manifest themselves.
- Reinforcing digital governance – Banks lag behind other industries in
cross-silo coordination of digital initiatives. Management of digital
transformation is fragmented within most banks: initiatives are
coordinated across silos, such as functions or regions, in only 30% of the
cases. Business cases are often required, but results are rarely
assessed.
- Promoting change – The importance of digital is well communicated in
banks. In about two-thirds of the banks we surveyed, the top
management of the company is “actively promoting a vision of the
future that involves digital technologies.” However, there remains a
wide gap between communicating a vision and engaging employees in a
cultural transformation. Only a minority of the respondents report that
the company is promoting the necessary cultural changes.
- Developing digital skills – Banks have higher digital skills than other
companies on average. However, only a slight majority of companies
report having the necessary digital skills in areas such as digital
leadership, mobile or social media. Although figures are higher for
analytics, stronger skills may be necessary across the board to advance
digital maturity.
Sources:
1- See Capgemini and EFMA World Banking Report, 2011
2- See Capgemini and EFMA World Banking Report, 2012

6. Acknowledgments
We would like to extend our sincere thanks to the executives who took the time to respond to our survey. We
would also like to acknowledge the significant contributions of our colleagues from the Digital Banking Center
of Excellence for their support in interpreting these results.
Contacts
For more information, please contact:
Global
Xavier
BENOIST-LUCY
xavier.benoist-lucy@capgemini.com
Jean
COUMAROS
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Robert
VAN DER EIJK
robert.van.der.eijk@capgemini.com
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ASSOULINE
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SAMUELSSON
anneli.samuelsson@capgemini.com
Stanislas
De ROYS
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Romain
DELAVENNE
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Marien
VAN RIESSEN
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WAALEN
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Fernando
BELLON DE AGUILAR
fernando.bellon@capgemini.com
Krister
RYDMARK
krister.rydmark@capgemini.com
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McMAHON
seamus.mcmahon@capgemini.com
United Kingdom Germany, Switzerland, Austria MENA Italy
Phil
FALATO
phil.falato@capgemini.com
Klaus-Georg
MEYER
klaus-georg.meyer@capgemini.com
Jawad
SHAIKH
jawad.shaikh@capgemini.com
Roberto
MANINI
roberto.manini@capgemini.com
About the Research on Digital Transformation
This analysis is based on data collected during the second year of our joint research program with the MIT
Center for Digital Business.
For more information about the research, please contact:
• Didier BONNET
Managing Director and Global Head of Practices at Capgemini Consulting
didier.bonnet@capgemini.com
• Patrick FERRARIS
Global Leader of the Technology Transformation Practice within Capgemini Consulting
patrick.ferraris@capgemini.com

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