Luxembourg: Review Of Top 10 Digital Initiatives To Transform Your Business And Lessons Learned From The Market

With 1 billion digital natives joining the labor force in the next seven years, 70 billion connected computing devices by 2020 and the amount of data doubling every 18 months, digital is the new era of business across all industries. It is a stepping stone in the evolution of the modern world, made possible by the exponential growth in the use of new technologies. The digital era requires a new way of thinking about how to compete, which influences the way products, services, campaigns and operating models are designed and delivered.

The banking industry is no exception with 35 percent of banking revenue put at risk due to the digital revolution. This article reviews the top 10 digital initiatives that banks have undertaken in recent years with various levels of success, highlighting their related benefits and the lessons learned, based on case studies observed on the market.

Our studies demonstrate that the banking and securities sector will lead digital market spending with relative market size growing from US$5 billion to US$8.8 billion by 2020 at a worldwide level. Like many other industries, the banking sector is facing a changing environment with digital disruptions taking place in several spheres.

  • With regards to customers, their expectations of digital experiences have been raised by non-banking players. Personalized, integrated services and holistic solutions for diverse financial needs are now expected. Next-generation customers also expect banking services to be available when and where they want them.
  • Regarding the competition landscape, non-traditional players and startups (FinTech) are picking off high-value areas of the value chain where banks have ignored opportunities, or white spaces that are not important enough to current bank operations or not economically relevant with their legacy operating model.
  • Operational wise, banks are forced to address front-to-back simplification and transformation due to aging infrastructure and servers, uncompetitive cost structures, and increasing pricing pressure in the transaction space.

As a consequence, huge investments have already been made by the banks as they seek to either become a digital leader, or try to catch up with their peers and competitors. Such efforts have met with varying levels of success. Going digital would allow banks to deliver an end-to- end and tailored customer experience across all channels, focusing on the habits and expectations of new generations. Furthermore, they would be able to retain and even expand their customer base, preventing customers from switching to non-banking competitors. Finally, banks could also lower their operational costs through the digitization of their repetitive and time-consuming processes, i.e., account opening or loan origination, thanks to the increased support of front-end activity by digital channels.

Becoming a successful digital organization requires more than a one-time investment. It requires ongoing evolution based on accurate and timely feedback from internal and external customers, which will only become possible if the organizational model is agile enough to cope with the pace of change and increased client interaction.

Today, digital is the common denominator for both challenges and opportunities faced by banks, creating a sink-or-swim situation for traditional players. Banks that forgo typical bespoke, iterative approaches and invest in integrated and forward- thinking transformation are achieving success in the digital era. In this context, many digital initiatives have been launched in the world of banking over the past few years.

  1. Digital strategy: adopting a digital strategy in line with your business strategy
  2. Digital customer segmentation: adapting customer segmentation drivers to new digital habits
  3. Customer lifecycle journey: removing friction from the customer journey
  4. Digital operating model: digital strategy driving the adoption of a digital operating model
  5. Agile transformation: starting with digital as a project and ending with digital as a core value
  6. Digitization of processes: transitioning from manual and paper-based processes to digital processes
  7. Mobile and omni-channel: providing a seamless user experience across all digital channels
  8. Cyber security: transforming the cyber security threats into opportunities
  9. FinTech: leveraging FinTech via a win-win strategic alliance
  10. Analytics: shifting from a "data-capturing" to a "data-leveraging" approach

Hereafter, we describe each initiative's connection with current market trends, and provide insight on the benefits and the lessons learned, as well as case studies observed from the market.

1. Adopting a digital strategy in line with your business strategy

Today, mobile devices provide unprecedented access to information, products and services. Businesses need to create a seamless experience and a consistent customer journey, projecting their brand clearly across the many touch points, channels, and devices their customers use. Digital strategy helps banks define a bold vision for their entire digital journey. It is the gateway that leads to all other digital initiatives. They need to reimagine how profits are made, rethink how relationships are created and managed, reshape how they operate, and rewire the competitive fabric of the entire banking industry. Such a digital strategy should be considered alongside a more agile operating model and optimized banking processes to allow banks to become more intuitive enterprises.

By participating in ideation and prioritization workshops, organizations create a backlog of digital initiatives that can be tailored to align with their corporate strategic objectives. An enterprise-wide digital strategy helps companies to become more effective in acquiring new customers and drives greater loyalty to retain their existing customer base. Furthermore, by combining a business-centric lens with a customer-centric viewpoint, a modern digital strategy can increase product penetration and customer satisfaction, while maintaining or improving business performance.

Digital strategy is the foundation that underpins the future state of the organization when it reaches digital maturity. Over time, clear differences have been identified between banks at the early stage of their digital maturity and those that are already mature. There are visible and less visible aspects of this maturity, cutting-edge technology being one of the most visible elements.

When trying to adopt new technology, the main reason for failure usually lies in the fact that organizations have not changed the culture and mindset of their employees. Leading digital banks not only have a clear and coherent digital strategy but they are also excelling at communicating it, often dictated by a single person or a limited number of people who demonstrate digital fluency to their colleagues.

Banks have also different objectives in terms of strategy depending on their level of maturity. Less mature organizations are using digital to improve efficiency and customer experience, while developed banks focus on transforming their business to stay at the cutting edge of the competition landscape, reflecting a vision beyond technologies.

In terms of culture, digitally developed banks have a more risk-taking approach than their less mature peers. They are also in better shape to implement digital initiatives by leveraging the benefits from cross-departmental collaboration. Being comfortable with risk and a collaborative mindset are key factors behind innovation.

For an Australian bank, digital banking was at the center of the transformation agenda. It focused on a long-term digital strategy comprising channels, data, agility and FinTech. They created UBank, which is their digital-only offering aimed at customers who wish to deal exclusively online or via their mobile. In 2014, the bank invested in the development of API, a programming interface layer that exposes some of the bank's functionalities and how certain services operate. The bank also launched an innovation hub created in the vein of start-up methodologies. In 2016, the bank announced a $50 million innovation fund to invest in start-ups.

Banks must understand that the opportunities offered by digital transformation are not embodied by the technology as such, but rather arise from the way banks are integrating new technologies to transform their business, their customer journey and how they map digital capabilities to their organization's roadmap.

2. Adapting customer segmentation drivers to new digital habits

New generations (Y and Z) customers who grew up with the Internet expect an immersive, personalized and frictionless digital experience with banking products and services. According to the millennial disruption index, 53 percent of millenniums think that their bank does not offer anything different from others and 33 percent believe they will not need a bank at all in five years' time. Moreover, 73 percent would be more excited about a new financial service offered by Google, Amazon or Apple, rather than by their bank.

With increasing competitors' brands and online-only offerings, including those offered by players from other industries, customers are looking to new alternatives and are expecting exceptional value-added services that go beyond core service offerings, breaking with previous industry standards. Failure to meet expectations is costly for banks, as some customers leave their traditional bank and look for more innovative players as a result of having lost trust in the big players.

Banks should already be segmenting customers to ensure targeted services and content depending on the client's digital habits, thus providing a customizable online service, which will propel improvements in the customer experience. Improved segmentation of their clients leads banks to create experiences that truly differentiate them in the marketplace, resulting in improved cross-selling. They will be able to better adapt products and services to key customer segments and strengthen their customer retention with improved customer knowledge. Aside from this, operational efficiencies will also be optimized through alignment to the defined segments.

Since digital banking services are not exclusively used by Gen Y and Z customers, the usual segmentation based on behavior should prevail. A leading universal bank in Russia implemented a new customer segmentation strategy based on customer income. The focus was on high and middle income segments (affluent and mass-affluent) with tailor-made products and services with a dedicated financial advisor and personal relationship manager respectively. The bank learned that they should pay attention to customer retention instead of customer attraction and that their segmentation strategy should involve an omni-channel seamless experience with a focus on utilization. Finally, they identified remote access channels as essential tools if banks wish to become leaders within the most profitable customer segments.

To read this Report in full, please click here.

This article contains general information only, and none of the Deloitte entities belonging to the Deloitte Network is, by means of this article rendering accounting, business, financial, investment or other professional advice or services. This article is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect the reader's finances or business. Before making any decision or taking any action that may affect the reader's finances or business, the reader should consult a qualified professional adviser.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions