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How ‘Digital’ Is Your Institution? [Digital Maturity Matrix]

Financial Service Providers are not unaware of the word ‘Digital’. Financial Institutions are considering Digital Transformation very seriously with the rising competition from Fintech firms. The Digital Transformation of these Financial Institutions might be at different levels of digital maturity based on existing processes and activities, local market conditions, and their strategic objectives. But it’s difficult to assess the current digital lending capabilities and identify the next steps they should take to become more digital.

We at Zuci believe in addressing the pain points of financial institutions and to understand the digital maturity of the FSP better we distinguished three levels of digital maturity – Early Stage, Halfway Digital, and Advanced Digital – characterized by which processes have been digitized, and to what extent. Each level implies a different strategic objective to be achieved through digital lending.

Early Stage Digital

 ‘Early Stage Digital’ lenders approach customers to manage core components of their account through digital channels, while significant in-person support continues through loan officers or agents. Typically, lenders at this stage leverage new channels to deploy their existing products and services.

Halfway Digital

‘Halfway Digital’ supports the development of new, more personalized digital products, and intelligent scoring further enables access for both new and existing customers, as product design can be specialized to meet their specific needs and circumstances.

Advanced Digital

 These lenders have best-in-class data management that enables highly personalized products and experiences specific to the individual needs of new and existing customers. What sets ‘Advanced Digital’ lenders apart from the competition is a (often digitally native) business model that fully aligns with the company’s strategy, workforce, culture, and technology to meet the digital expectations of customers and employees. ‘Advanced Digital’ lenders effectively function as ‘knowledge hubs’ with their customers, and use the insights they glean from customer data they collect to offer curated services.

Digital Maturity Matrix

The above digital framework will empower Financial Institutions to self-assess and plan further action by outlining the activities and functionality that should be in place at each stage of the lending process, for each level of digital maturity. The blue boxes represent ‘gateways’ – the minimum required to have achieved a certain level and to progress through the Matrix. For example, if you are inclined to the functioning of ‘Early Stage Digital’ then you should aspire to  ‘Halfway Digital’, and vice-versa for ‘Digital Plus’. Adding, many lenders will be ‘Pre-Early Stage’ – in that case, ‘Click here to know how to structure your digital lending journey.

Set with the pre-requisite for digital lending from the digital maturity matrix. Click here, to know where to start the Digital Transformation.

Janaha Vivek

I write about fintech, data, and everything around it | Assistant Marketing Manager @ Zuci Systems.

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