Digitalization poses numerous challenges to all savings banks. How can savings banks respond to customers whose behavior is constantly changing? Customers increasingly want to use mobile banking services on smart phones and other digital interfaces in order to do their banking themselves. However, they also demand first class personal service from their branch. And how should savings banks respond to new forms of competition from tech giants Amazon, PayPal and Google, etc.? These companies are increasingly offering financial services. How should savings banks deal with the aspiring fintech companies, which—as full-blooded digital companies—have completely different market access and to specific target groups as conventional lenders?

In our opinion, there can only be one attitude: Savings banks need to recognize that digitalization is a necessity and an opportunity. According to our experiences, savings banks can significantly boost their income while reducing costs by following a well designed and systematically executed digitalization strategy. Yet still, digitalization is only progressing slowly among DSGV members. Savings banks that continue to delay digitalization are running a risk of losing access to their customers: to traditional competitors that react quicker, but also to new market participants with lower fixed costs. An individual digitalization strategy must become a major component of the overall strategy. It is important for savings banks to be open to digital transformation by further refining their regional business model and focusing clearly on customers.

The digital rule-of-three: create a target image, standardize processes, act with agility

Digital transformation, standardization and growth are three essential aspects of strategic further development. But only a clear target image allows each staff member to see their own future: When executives and employees know and cultivate the target image, they will begin to realize it themselves. Key performance indicators that have been defined and adopted together in advance make the necessary steps measurable and manageable. And it becomes clear what exactly the digitalization strategy demands of employees, executives, management boards and supervisory boards.

Customers already expect simple, quick and convenient services—whether online or offline. They demand the personal touch in personal contact with their savings bank and they expect that all IT or machine processes run reliably. This requires a constant eye on systematic demands. Savings banks can only guarantee better quality through standardization. Personal management and standardized processes are not contradictory. Institutions that are closely oriented to the standards of the savings banks organization secure a future quality advantage and develop a real omni-channel capability. All savings banks should align their internal organization with these aims.