Knowing how to identity new opportunities created by the improvement of technology is key. Today, it makes a difference in the financial sector and in the way institutions efficiently meet their customers’ expectations.
BRUSSELS, 28 November 2017 – Icelsa I. Diaz Dauhajre is currently Director of Alternative Channels within the People's Savings and Loans Association of Dominican Republic (Asociación Popular de Ahorros y Préstamos de República Dominicana – APAP). Last October, she took part to the “Managing integration challenges in the digital transformation journey" panel during the 2017 Fintech Americas conference in Miami. For Fintech Americas, she detailed her views on the way this sector is evolving considering the current challenges it is facing, and those to come.
How do you spot opportunities for innovation?
It first starts with identifying clients fighting to solve issues or reach their goal. Then, we work on alternatives and compensatory benefits to help them. That's what makes the innovator's heart beat stronger, because this is where we spot an opportunity to innovate.
When we think of how our company would be on the first day it opens its doors, with all that digitisation can bring, it awakens our mind, and we brainstorm on way to generate more business.
Real opportunities to innovate don't always come to my mind as a formal mechanism or in sporadic spaces where one should create and improve. I can find them during an informal conversation, in a corridor, with clients or co-workers, through my own experiences, in the way it is done in other sectors, in fintechs for example. Above all, it happens when we look beyond the client and simple binary segmentation concepts – man and woman, young and old, student and entrepreneur – and dedicate ourselves to understand what and whom influences our client's decision.
To know our client is getting easier thanks to new digital technologies such as artificial intelligence, big data, social networking. Yet, financial entities shall try to make these great projects happen without losing the simplicity and spontaneity of the “reason why". Our clients ask financial services and do not choose among so many options on the market. When we apply this way of thinking in our daily decisions, innovation happens.
How do you encourage innovation in your organization?
Innovation and transformation are the new keywords of our organisation. And this innovation only happens through people.
According to neuroscience, only 2% of the population is creatively talented. The rest of us, the 98% left, we have to daily train our creativity, 15 to 30 minutes a day, to practise, question and shape new forms of services.
It's just like going to the gym, it is in every decision we bring up or suggest. We need to foster our empathy and minimize our tendency to a rational logic, or place the cons first before the idea is even born. It sounds easy to do, but it actually is quite complex to maintain such a daily way of working within a team.
Another efficient way to foster innovation in our company has been to work on project by team made composed of collaborators with different profiles, working on distinct tasks. With such an organisation, ideas are exchanged in a better way to serve the client.
The culture of innovation has been institutionalised through our yearly trade fair, focusing on digitisation and innovation where all our collaborators are invited to developing innovative solution based on our customers' needs. We initiated APAP Talks, made of knowledge exchange between our experts and collaborators. We also formed a Committee of Transformation, whose mission is to steep digitisation and innovation into organisational strategy.
In my opinion, in addition to functional or matrix structures dedicated to innovation, creativity is integrated into culture through "example" and in how organizations respond to day-to-day decisions. To develop the ability to take over the inherent risks of innovation, always focus on the minimum viable product and keep the focus on the essence of the client's need: these are some ways to accelerate institutional innovation.
What are the main challenges in this digital transformation path?
The main challenges when it comes to digital transformation – which also represent huge opportunities – are:
Regulatory constraints: We see every day how regulatory entities are willing to establish new criteria that allow financial services' complete digitization; the regularisation of norms regarding digital currencies; and the opening to collaborative work with fintechs. Yet, in order to make possible a complete digitalization, the need to strengthen the entire financial ecosystem remains.
Humanisation of finance: New trends and technological advances in robotics and artificial intelligence will displace many jobs and analyses in the sector, but emotional connections behind financial decisions will never be replaced. That is right here that a great challenge appears for the sector. The information and data must be vibrant, in real time, recoverable, traceable, complete and secure. In addition, there must be formal mechanisms to integrate the client's emotions, interests and needs. They must actively participate to the (co-) creation of value. This is what can make a different and what every company seeks for.
Prioritize and act: The challenge is always here for prioritising the required investments and keeping pace with the technological revolution. It is a challenge for all of us trying to identify which are the solutions that generate engagement, greater profits and increase organisational efficiency. In what these investments are decided, companies cannot fall into the inertia of not acting.
Measure return on digital investment: talking with great innovators, industry and financial executives, I see the great challenge of being able to establish mechanisms that can be scaled over time to ensure the return of innovation. The great concern is whether to invest or not according to an expected rate of return or include in the financial models the opportunity cost that arises when another entity or non-financial company generates these solutions of engagement/engagement solutions making us lose clients.
In what areas / departments do you see most opportunity?
Digital transformation and innovation offers cross-cutting opportunities, in all areas and departments of a company. It must definitely begin with establishing the digital base with a flexible technological infrastructure and solid digital skills within the organization.
Yet, in addition to this digital base, the traditional mechanisms of operation of the areas responsible for the development of new business and business intelligence should be revolutionised by integrating a strong expertise in research and understanding of the digital performance of consumers. Once these opportunities identified, the areas of project execution must be reformulated to work in a flexible manner and with the shortest possible time to market of the minimum viable product.
What are the areas that you consider are ready for disruption?
It is said that banking is no longer a place but an action that must be undertaken wherever you are. Therefore, the main area that is ready for disruption is the distribution chain of financial services.
The technologies allow us to radically change the service experience and that is why the great opportunity is to transform this experience using technology as an enabler, whenever the client approaches us, whether in the digital or face-to-face environment.
What role do you see APAP playing in financial inclusion in the Dominican Republic and how technology can support those efforts?
In Dominican Republic, the financial inclusion index is low, as in most Latin America countries. In a contrary but complementary analogy, we can stereotype the population as an active user of ICT. We can see this in the penetration rates of internet lines and social media users (half of the population) added to the high penetration of mobile phones (80%) and the growth of e-commerce.
APAP leads the inclusion and financial accessibility of people with disabilities in Dominican Republic and has relied on technology to achieve such thing. It is the first financial institution in the Dominican system that has dismantled barriers for people with disabilities to access financial services and products. As part of our corporate social responsibility, we allow them to independently or autonomously manage their finance.
Since 2016, APAP has created two pioneer services for people with hearing disabilities: videoconference in sign language for consultations and an online chat service.
We also adapt all the digital attention channels so that they are accessible to screen readers (web page, mobile application, Internet banking site) used by people with visual disabilities. We also promote the use of the app “Identificador audible de billetes de República Dominicana" (Audible ID of banksnotes of Dominican Republic).
The next step is to adapt all service channels based on universal design principles while leveraging technological solutions and fostering financial education.