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Tackling digital transformation within a financial institution can be complex. Complex doesn’t mean “impossible,” “shouldn’t do it,” or “not valuable,” though – quite the contrary. Bank digital transformation strategy and implementation done right improves operational efficiency, as well as customer experience, from attracting new customers all the way to simplifying banking.

The trend for bank digital transformation strategy and implementation is a little troubling, though. Many are far behind on technology, losing out on the advances of best-in-cloud platforms, foregoing the use of AI, and leaning away from a single source of truth (SSOT), which can improve accessibility and analyzable data.

While many financial institutions say they’re undergoing a digital transformation or planning for one in 2022, few seem to take advantage of what most in the technology world would consider the “technology of today.” At most, 26% have chatbots, only 39% utilize robotic process automation, and an abysmal 22% are utilizing machine learning (ML).

What we can deduce from this is that most financial institutions are playing catch-up, not planning for the future, but if we’re going to transform, let’s transform.

Let’s reap the benefits of using up-to-date technology, efficient operations, and satisfied customers. Taking advantage of Contract Lifecycle Management (CLM) platforms is one of the most beneficial for financial institutions, so let’s take a look at how to go about starting a CLM implementation.

First, it’s good to get a pulse on the type of project being undertaken. There are a number of factors that go into a simple versus a complex CLM transformation for financial institutions. Things can become more complex when:

  • Technology is dated, especially within back-office operations.
  • Multiple applications are needed to complete one task.
  • There’s a lack of integration and heavy reliance on file-based work.
  • There’s no single source of truth (SSOT), leading to issues with data integrity.
  • There are lots of niche home-grown or vendor solutions, especially when supported by one person and/or require lots of overhead for IT to support.

Bank Digital Transformation Strategy, Step 1: Identify a Value Stream

Identifying a value stream is an integral part of any implementation and can solve problems before they even consider existing. It’s a map of the process flow from start to finish and the goal is to optimize implementation efforts and keep everyone singing from the same hymnal. It sets expectations up front and prevents miscommunications between Lines of Business (LOBs).

Without a well-thought-out value stream map, organizations can run into the classic problem of the right hand not knowing what the left hand is doing. With a value map, we stay in sync and on track, reducing extraneous costs, time, and confusion.

To get started, identify the area of focus and outcome for that area. Some common solutions offered by DocuSign Agreement Cloud include:

  • Back-office operations that require some level of signature from your end customer can use DocuSign eSignature to simplify and provide a better customer experience. If there are any complementary processes that occur after signature to onboard those customers in the systems, these requests can be automatically routed and accessed in a centralized repository by DocuSign CLM.
  • Commercial banking legal engagements can be streamlined using DocuSign CLM’s robust APIs with your Commercial Lending platform (i.e., nCino, Q2, etc.) to remove the grinding halt caused by redlining via email. In addition, you can leverage the tools to streamline processes, including around Appraisal Letters and Flood Determination.
  • Treasury management can leverage DocuSign CLM to support ACH, Fraud, FX, Cash Management, Wires, Business Online Banking, and more by routing the appropriate onboarding materials to the right departments to process.
  • Leverage DocuSign CLM to streamline vendor management/procurement. You will onboard much quicker and be able to locate and automate agreements with ease when it comes to renewal time.

Get the value stream map drafted, improved, and finalized with the right stakeholders and business outcome in mind, and the implementation project is off to the best start it can possibly have.

A hand holding a phone with a map application open in front a concrete path through the woods.

Step 2: Proof of Concept

Now that the value stream has been identified, it’s time to do a Proof-of-Concept (POC). This step is critical in bank digital transformation strategy and implementation since this team developing the POC will be the foundation for others to follow. They will be paving the way in defining new processes, quantifying cost savings (i.e., less manual, more automated), as well as being champions or subject matter experts to the next LOB.

Identify one LOB that is eager, engaged, and ready to be the POC team. This group will embark on the next step, identifying all necessary CLM components, as well as prioritizing them. For example, it’s a good idea to take inventory of your agreements and note how many people and/or groups touch them – this will determine business value and help you rank appropriately.

As a rule of thumb, if Product Managers/Owners cannot articulate any business value on features, then it should be thrown into a backlog or potential future use list to be addressed at a later date.

This crucial step is the best way to reach a Minimum Viable Product (MVP), a key component in Agile implementation and a methodology applied by wildly successful companies, including Apple, Google, and Netflix. The term often brings up resistance, but it may simply have something to do with the word “minimum.”

Let’s clear the air. A Minimum Viable Product (MVP) is a first step of many. It’s the initial release of a fully functional product (not a technology prototype) that allows users to provide feedback that can be iterated on. Taking this route to test new products involves using the least amount of money to understand the return of said product and it saves precious hours of work that may go into an unproven aspect of the product.

This method can also be beneficial when it comes to the change management aspect of implementation, appropriating new technology in a more organic way is beneficial for any bank digital transformation strategy and implementation versus sudden, rapid, overnight overhauls.

If mandating everyone must change, then you will encounter resistance in numerous forms such as:

  • Over-engineered solutions accounting for every scenario vs. focusing on a Minimum Viable Product (MVP) deliverable and then expanding upon the most successful aspects.
  • Attrition – people are burnt out due to working long hours. It can foster an environment low on any sense of accomplishment or definitive direction because there’s been no real-life or feedback on individual components of the product.
  • Poor quality caused by constant context switching.
  • Budgets are out of control leading to financial exercises that we’ll leave to the imagination.
  • Lost deals, lost clients by way of doing too little, too late.
  • Tarnished reputation. “You said this quarter, then it was next year, now it’s three years out.”

Step 3: Empower and Enable your team.

In order to be successful, give your team the time to focus on the new technology and processes without having to juggle multiple priorities. When there’s a Business-As-Usual mentality, people will focus on getting their normal jobs done and forego learning more about the changes – this won’t enable them to embrace all of the great benefits of the new technology and processes and it certainly won’t empower them to take advantage of all the new capabilities it provides.

Transform Your Financial Institution with Spaulding Ridge and DocuSign

At Spaulding Ridge, we back the best-in-cloud technology that best supports clients and their needs. DocuSign CLM can support you and your financial institution in a variety of use cases, including back-office operations, commercial banking, and treasury management, as well as vendor procurement and management.

I could go on and on, so please reach out to me, Pram Chadha, if you’re interested in hearing more about how CLM can transform your financial institution.