21 Mar, 2022 | 3 min read

Five Phases of Digital Transformation Implementation

  • Seshika Fernando
  • Vice President - Banking and Financial Services - WSO2

Photo by Estée Janssens on Unsplash

Gartner has famously developed a digital transformation methodology which breaks down the initiative into five successive phases:

  1. Ambition
  2. Design
  3. Deliver
  4. Scale 
  5. Refine

You could consider adopting this methodology, with necessary adaptations to the unique circumstances of your bank – a contextual adaptation that must apply to any procedure where there is an inherent difference between theory and practice. Below are some pointers you could consider aligned to the three foundational pillars of digital transformation covered earlier in this e-book.


An effective method a bank could adopt is to establish an innovation lab to foster incubation, then staff it properly. The best way to do this is by offering your in-house developers a rotating “residency” of, typically, six to eight months.

Part of the staffing equation is to make sure that these residents can dedicate the same kind of attention to the project as a hermit monk dedicates to their devotions. This means dedication to this one project to the exclusion of all others. It also means freedom from the “Keep the Lights On” requirements of their day jobs. Of course, ongoing services must continue to be delivered, so more resources will need to be made available to the more day-to-day work.

While securing the talents of the best direct contributors is of paramount importance, these specialists need guidance and above all “air cover” to keep them on-task. That’s why it is so important to establish a digital transformation steering committee composed of senior and even top management.

Lastly, we remind you that what gets measured is what gets done -- so make sure you’re measuring the right things.

“The dollar value of new APIs’ impact per second is what’s important,” Abeysinghe reminds us, “not the raw number of APIs created.”

The Massachusetts Institute of Technology (MIT) sees things much the same way. The university’s renowned Center for Information Systems Research recently published a digital transformation case study that, among other things, raised exactly this point. DBS Group, the Singaporean bank on which the paper focused, altered its balanced scorecard to cede some points from traditional key performance indicators and strategic priorities to a new category: “Making Banking Joyful”.

“‘Drive digitally’ measured the channel share of digital acquisitions, transactions, and engagements with customers,” the study’s authors wrote. “‘Joyful customers’ focused on improving the experiences of customers and DBS employees. … ‘Digital value creation’ tracked the number of digital customers and income per digital customer by each [business unit].”


While there are any number of reasons to keep a close eye on low-code and no-code development, we encourage you to use them, as they cut costs, cut reliance on niche engineering talent, and importantly, also cut time to market.

Also, don’t shy away from using open-source code. In particular, the Fintech Open Source Foundation (FINOS) is dedicated to the unique challenges of developing software -- and especially APIs -- in the financial services sector. Together with several leading banks, FINOS has played an important role in driving adoption of open-source technology in the sector driven by standards and collaborative development focusing on in-demand use cases.

Understand that you’re not reinventing the wheel, or even the API. According to Gartner, API management deployments fall into five use cases:

  1. Multi-experience architecture
  2. Integration using APIs
  3. Internal API management
  4. Productizing APIs 
  5. Open banking

With this typology in mind, it might be easier to get your head around the complexity of the challenges you’re about to face. From there, it becomes a more straightforward matter to engage the API platform team, API developers, product managers, and security teams to craft a prioritized list of requirements.

It also helps if you stop thinking of development in terms of projects -- or even project portfolios -- and start thinking in terms of a development platform. While it means ceding a certain amount of hands-on authority, it affords executives a streamlined model for governance and funding of these projects.


MIT identifies five key digital capabilities drawing from DBS’s success. Three of them are customer-facing:

  1. Acquire: Widen distribution while lowering acquisition costs.
  2. Transact: Eliminate paper and create instant fulfillment while lowering processing costs.
  3. Engage: Increase lifetime value of customers by cross-selling through contextual marketing.

On the layer below that, digital transformation can take the form of establishing development platforms to speed time to market. And all this is predicated on using data to drive insights into customer behavior.

Of all these layers, perhaps the easiest to ignore – at one’s own peril – is platforms.

These “ease the operations load on their DevOps teams, while abstracting away unnecessary decisions for software developers,” according to Info World.

While the term “platform” is more than a little ambiguous, the function it serves in this case is fairly universal: a foundation of tools, services, knowledge, and support arranged to facilitate the delivery of new products and experiences.

This is where the APIs live and thus, this is where the gateways are. Inevitably, this is where the security vulnerabilities can be found. This extends a facile counterargument against digital transformation, because mainframe-based banking systems had no such exposures. Of course, multifactor authentication, fraud detection algorithms, and other security measures that have become common practice can mitigate any risk.

The best way to avoid risk at the developer platform level, though, is to avoid risky developers. It is imperative to attract the best third-party developers available. They will understand the need to have gradations of permissions and will patiently build the necessary trust as your collaboration continues.

Maybe this doesn’t tell you what your bank’s next product ought to be, but at least it’s a glimpse into where to look.

To know more about procedures for setting the foundation for a new digital target state, please download our e-book as a first step.

Photo by Estée Janssens.