Overcoming Barriers In Your Postal To Digital Communications Journey

In enterprise financial services, the transition from print and post to digital communications is not just a trend but a necessity.

Yet, the challenges that change agents face within enterprise organisations are significant, including legacy tech, processes, and regulation.

I spoke to our CEO, Paul, to delve into the challenges in transforming postal to digital communications, and to explore how the most successful leaders overcome the barriers to change.

Understanding the Persistence of Paper

Many major financial service providers still rely heavily on paper communications.

The transition to digital is fraught with challenges for large organisations, and the people within them, to navigate.

 Legacy Systems and Processes

Many enterprises are entrenched in outdated technologies and methods, making the shift to digital complex and daunting.

 Technological Inertia

There is often a reluctance to change from the familiar, even when it's clear that digital solutions offer significant advantages.

 Regulatory Concerns

Compliance with security and regulatory standards can complicate the transition process.

“Enterprises face numerous challenges when digitising their traditional postal outputs. These range from legacy processes and technology to a certain level of reticence to move away from established methods.”

— Paul Holland, CEO, Beyond Encryption

Benefits of Digital Transformation in Financial Services

Despite the challenges, the benefits of transforming legacy processes using digital technologies are too large to ignore.

 Operational Cost Reduction

Digital transformation can significantly reduce operational costs by eliminating paper-heavy workflows and manual data entry.

Digitising documents and consolidating legacy systems can cut administrative work and costs associated with printing and mailing.

Digital communications solutions can save up to 90% of the cost of post.

Automated communications and self-service portals can handle routine customer queries, freeing up employees to focus on high-value tasks such as relationship-building and problem-solving.

 Improved Customer Experience

Digital platforms can empower customers to manage their interactions independently, such as accessing documents, checking accounts, and making payments without needing to contact support staff.

Personalisation of services based on customer data can enhance customer satisfaction and engagement by providing tailored recommendations and communications.

According to our research, the majority of consumers prefer to receive documents from companies by email. Personalising the channels by which customers receive information can meet such preferences, creating a more accommodating experience for each customer.

 Fostering Innovation

Modern technologies enable financial services to communicate personalised financial plans, investment breakdowns, and advice.

Digital tools can also provide real-time feedback, allowing companies to record, monitor, refine, and audit their customer interactions.

The richer data that digital solutions afford can also enable faster, more advanced security measures, for example through encryption and identity verification processes.

Identifying the Main Barriers

The primary obstacles financial services face in the transition from postal to digital communications include:

 Technological Legacy

Moving away from deeply embedded paper-based systems is not straightforward.

Organisations must develop comprehensive alternatives rather than simply discontinuing paper communications.

 Regulatory Obligations

Compliance with stringent regulations in the financial sector necessitates careful planning and execution of digital strategies.

 Cost and Disruption

While the long-term economic benefits of digital communications are clear, the initial costs and potential disruptions can be substantial.

“Changing processes becomes one of those challenges, one of those exclamation marks. If there is no willingness, which there certainly is for all sorts of reasons—economics, ecological, customer drive—you still have the need to find a solution that can satisfy the regulatory obligations.”

— Paul Holland, CEO, Beyond Encryption

Strategies for Overcoming Barriers

To successfully navigate these challenges, financial services organisations need a strategic approach.

 Commitment to Digital-First Approach

Financial institutions need to allocate resources strategically, engaging partners and consultancies to address legacy system issues and develop a clear digital transformation roadmap.

Emphasising the long-term benefits of digital transformation, such as cost savings, improved customer engagement, and ecological impact, can help secure buy-in from stakeholders.

 Incremental Implementation

Starting with smaller, manageable digital projects that offer clear returns on investment can build momentum and demonstrate the feasibility and benefits of larger-scale transformations.

Using successful digital initiatives as proof points can help expand digital transformation efforts across the organisation.

Enhancing Security and Compliance

Security and compliance should be integral to any change project.

Financial services must adhere to key regulations to ensure the protection of sensitive information and maintain customer trust.

Key regulations include GDPR, which mandates the encryption of communications containing personal data, and MiFID II, which requires robust identity verification and data protection measures.

Compliance with these regulations may involve implementing encryption, authentication, and auditing processes for communications.

“Security and compliance must be integral from day one. Engaging specialists ensures that transitions minimise risks and protect customer data. Adhering to regulatory guidelines is critical, especially in the financial sector.”

— Paul Holland, CEO, Beyond Encryption

Swaying Senior Leadership

For individuals seeking to instigate transformation within their organisations, it is imperative to utilise the essential components of an effective change strategy.

 Singular Vision and Commitment

Leadership must be united in their vision and commitment to digital transformation.

 Framing the Change as a Journey

Highlight the long-term benefits of efficiency and customer satisfaction to secure buy-in.

 Stakeholder Engagement

Aligning with stakeholders’ interests, such as sustainability and cost savings, ensures broader support.

“Commitment to a plan, to a singular vision, is so important. Companies need to ensure they have a strategy that will enable them to compete in the future. Communicating the benefits and ROI of digital solutions to stakeholders is crucial.”

— Paul Holland, CEO, Beyond Encryption

The Role of Training

Training is vital for successful digital transformation.

Organisations must invest in educating both staff and customers on the reasons for change and how it benefits them.

Ongoing training sessions and clear communication are essential to ensure everyone understands and supports the new processes.

“Training is key with everything. It’s about making people understand why they are on a journey, why they should buy into the journey. If we believe in something, we’re going to be more committed to it, better at it, and support it more.”

— Paul Holland, CEO, Beyond Encryption

Closing off

Digital transformation in enterprise financial services organisations is complex but necessary.

By addressing legacy system challenges, regulatory concerns, and skills gaps, and by strategically implementing digital initiatives, financial institutions can overcome barriers and achieve significant operational, customer, and ecological benefits.

Engaging in continuous learning, fostering a digital culture, and ensuring robust security measures are key to successful digital transformation.

In embracing these strategies and understanding the journey ahead, change agents can lead their companies in the transition from traditional postal communications to a digital future.

References:

Digital Transformation in Financial Services, Whatfix, 2023.

How Digital Transformation Impacts Financial Services Companies, EY, 2023.

The Painful Challenges of Digital Transformation in Financial Services, EasySend, 2023.

Digital Transformation in Finance Case Studies, DigitalDefynd, 2024.

Digital Transformation in Banking (2024 Guide), VisualSP, 2024.

Digital Transformation in Action: Tackling Challenges in 2024 in the Building Society Market, BSA Blog, 2024.

Digital Finance: Does it Change the Trade-off Between Risk and Resilience?, Deutsche Bundesbank, 2024.

Reviewed By:

Sabrina McClune, 31.07.24

Sam Kendall, 01.08.24