We will see history made at Nationwide Building Society this year. For the first time in 160 years more products will be sold online than in our branches with our aim to increase this to 66%

by 2019. The change in customer preference and behaviour is profound and enduring. With this in mind and with over 20 years’ experience of leading change and transformation programmes, and now leading Nationwide’s strategic investment plan, I was delighted to accept RSG’s invitation to lead a round table debate on digital transformation in business.

It would seem that every organisation that has a digital strategy, is demanding technological change and is attempting to lure those with pre-existing digital skills. Digital transformation, the buzz phrase of the moment, is a term I’ve heard and used a lot myself in the past couple of years, but I’m still not sure that the term, as well as the widespread impact of such a transformation, is universally understood. From an organisations point of view, this has substantial implications in how business organises itself, the people and the skills needed, the leadership attracted and grown and the capabilities colleagues need and demand for a start.

Consumers are being educated to expect simplicity and to have choice in how and when they do business with an organisation. Lessons from history suggest that you ignore these trends at your peril; and yet all our old views of how to forecast customer behaviour in this new world will need to change completely. We have no long-run experience to reference as yet. For example, it was almost a truism that the more branches a financial organisation had, the more current accounts they would sell. The correlation between branch footprint and current account market share was indisputable. Today however, we are nearing 50% of our sales on-line for what everyone would say (in the past I would hasten) was a relationship based sales process.

So does this mean the end of face-to-face? Will we witness a wholehearted shift in our lifetime from Bricks and Mortar (BAM) to Digital and Mobile (DAM)? I would propose that it will be those organisations that blend the physical and digital worlds, or ‘phygital’, that best feel the rewards. The ability to start a process in one channel and finish in another has long been the mantra of consultants and industry commentators. If you cannot realise the potential of being omni-channel, then the ‘omnipotent’ power of the market will make you irrelevant!

So how do we address that ‘personalisation gap’ as we call it? Our people provide the glue that join (our often imperfect) processes together and, more often than not, make them into a great experience. How will this work when people are buying 66% of their products from us online? Well the answer is we are not sure. We know that what people will need tomorrow will be different than those today. We know that ‘big data’ will be important but will need to make good on its promise of creating a customer segment of one.

So I think you will gather that I do believe that this shift to a ‘digital society’ is very real and in this instance the hype, concerns and opportunities as outlined are well considered and not the slightest bit rooted in rhetoric. But I also believe that this ‘digital society’ is already evolved and alive around us. We are all part of it and make it more so every day as consumers in our own right. We now need to work to build a ‘digital society’ inside our organisation in the literal sense of the word. I’m adamant that people will continue to bank with banks; buy books from booksellers, electrical goods from retailers etc. The only difference will be how they look in a digital age! This white paper comprises the insights and ideas that were provided throughout the Debate as well as some additional research.

- Martin Boyle, Divisional Director of Business Transformation, Nationwide Building Society

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