It’s like zooming around a racetrack but making pit stops: For banks trying to meet rapidly changing expectations in the digital age, delivering simple, easy customer experiences requires speed and regular adjustments. It also requires learning the meaning and application of two jargon terms, not that banking isn’t rife with those already. (Current expected credit loss standard or application program interface, anyone?)
Yes, “agile project management”—“agile” for short—is here and many financial services companies are adopting it to quickly forge the software they need to fashion digital banking tools. Some financial institutions even extend agile principles to branches and other physical aspects of customer experience.
Failing fast, sailing far
So what is “agile,” besides a term that sounds like it was swiped from a Fitbit user’s guide? Originally intended for developing software, agile uses two-to-four-week cycles called “sprints” to create prototypes faster. It also incorporates customer feedback into each successive version before design teams arrive at the final product. Agile is often used in conjunction with a related project-management method called “scrum”—where self-organizing, cross-functional teams take an iterative approach to developing software. When done right, experts say, agile saves time and money by avoiding costly long-term project failures, and delivers products much earlier than with traditional methods.
So: Agile. Sprints. Scrum. Everything OK so far? Let’s race on.
“The agile approach is to fail fast, fail often, deliver a little bit at a time and constantly seek approval on the process and the product to make sure you’re giving the best value,” says Danielle D. Pollard, a Chicago-based performance coach for agile-development teams, whose clients include The Options Clearing Corporation. “Agile will turn an organization upside down, but for the better.”
But what about the common-sense notion that “banks” and “upside down” don’t normally mix? “There’s a lot of resistance to it for that reason,” Pollard acknowledges. “Agile exposes areas that need improvement by pulling the cover back on your processes and procedures, as well as your teams’ productivity levels.” When you don’t know exactly what you’re building, agile lets you “find out sooner rather than later whether you’re barking up the right tree.”
The roots of agile: Increment and manifestos
Agile traces its roots to 1970, when American computer scientist Winston W. Royce published a paper in which he proposed an iterative, incremental approach to develop large software systems. Decades later in 2001, a group of 17 software engineers produced the “Manifesto for Agile Software Development.” While agile is a project management philosophy rather than a prescriptive formula, the manifesto lays out 12 principles—chief among them satisfying the customer through early, continuous delivery. It welcomes changing requirements, even late in a product’s development, and says teams should reflect at regular intervals on how to become more effective.
In the past, with traditional “waterfall” project management, working from one department to another could take months or years, “and by the end, they’ve run through so many millions of dollars that the projects are over-budget and over-time, and have a 95 percent failure rate,” Pollard says. “Agile is the answer to that. Instead of having group silos—business analysts, design teams, developers, testers—you take people from each of those areas and put them all in one cross-functional team, so you can work faster.”
Agile as a customer service ally
While many banks use agile methods to develop digital tools, Accenture advocates that they apply agile principles to the broader customer experience.
“Banks have learned how to use agile methods in developing digital value propositions, and now there is an opportunity to extend the same concepts in the physical world,” says Marco Magnini, senior manager in Accenture’s financial services practice in New York. “We call it the ‘human-digital experience.’ The concept is especially applicable today, when incumbent banks face new competitors coming from the fintech space and the tech sector. Banks need to be agile in the sense of nimble and fast in adapting their distribution footprint—mainly physical—and in dynamically adjusting to fast-changing market scenarios of supply and demand.”
With their many different branch models, new locations and ever-changing requirements, banks should empower fast changes, prototyping and closed loops for customer feedback, a 2016 Accenture report recommends. Branch associates must become digitally savvy, proactive, customer-oriented, energetic team players—and what’s more, have the right culture to support them, it says.
“Bank branches should be transformed—defined, designed and rolled-out—using agile project-management tools and concepts,” Magnini says. “In this context, the word ‘branch’ needs to be redefined, embracing retail-like strategies and best practices. We see players exploring and adopting multi-format strategies at scale to be relevant when the demand for particular needs spikes.”
Some additional, actionable advice for how banks can become more agile and improve customer experiences:
To inform your branch mix, assess your organization and your target customer to make sure they’re aligned, Accenture recommends. Realistically evaluate your levels of agility and specialization and then adopt the agile business model, market segments and strategies that complement it.
Offer customers “hyper-personalized” products and services, Accenture suggests. Deliver customer experiences that blend banking innovation and human interaction while reducing operational costs and growing market share.
Before switching to agile methods for developing software, “Bring in someone to do an assessment first, to see if you’re ready for that framework,” Pollard says. “About 63 percent of agile transformations that fail are due to company culture being at odds with the values and principles of agile, and to lack of leadership buy-in. Switching to agile is an intensive—and can be a very expensive—journey. You have to have the right leadership, culture and infrastructure in place so that it’s successful.”
Greg Beaubien is a Chicago-based writer and editor. The author of three books including a novel, he has written for the Chicago Tribune, Los Angeles Times, Travel + Leisure, Yahoo Travel and for the petroleum company BP.
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