Expert interview with Balz Gut

“These days, standing still is going backwards”

Digital transformation poses increasing challenges for the financial market. Innovative strategies are the order of the day. Balz Gut, Head of Banking Transformation at Swisscom, outlines the trends we should expect to see in the Swiss banking sector and how financial institutions can best prepare.

Text: Martina Longo, Interview: Alina Klaus, 

Mr Gut, your division supports and guides banks through the transformation process. Can you tell us a bit more about this?

Balz Gut: We see transformation as a continuous process of change that brings fundamental changes to an organisation over the long term. As part of the transformation process, a company engages in fundamental thinking about its DNA, in terms of its business model, value chain and strategic direction. It is crucial that the transformation is implemented systematically, taking account of the overall market, relevant trends and innovations, as well as being broadly based and focused on the overall corporate strategy.

We take a holistic approach to supporting our customers and can advise them throughout the entire transformation process if required. We provide support in the fields of market monitoring, trend scouting and innovation management, from the initial idea through to its practical implementation.


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Why do banks need to engage with the issue of transformation?

It is essential that the financial sector has permanent, well-established transformation processes to deal with the rapid change brought about by digitisation, globalisation and individualisation. A transformation process needs to address the challenges of the digital age and continually adapt to dynamic markets, competitors and customer needs. These days, standing still is going backwards. The established financial services providers therefore have to keep ahead of the curve and continue to innovate and evolve. The willingness to embrace change is key to overcoming the challenges successfully.

In your opinion, what are the greatest challenges facing banks at present?

The financial services market is undergoing a period of significant change, with fully automated payment and exchange rate processing, new competitors entering the market offering extremely low-cost services at practically no cost to the end consumer, and negative interest rates and superabundant capital eroding margins. New investment opportunities are also emerging, including start-up financing and digital currency trading. These new opportunities require new knowledge and also involve a potentially higher risk for the same expected margins, due to companies’ limited expertise in those areas.


It is important to remember that, while the impact of these developments may not be felt immediately, they have the potential to jeopardise established financial services providers’ existing business models and may even render them obsolete.

How can banks respond to these challenges?

If they do not want to be outpaced or even ousted by newcomers to the sector, they need to tackle the challenges head on by developing strategies and responding swiftly. They need to develop a clear plan to tackle and successfully manage the vital transformation. The plan should focus on three strategic priorities: firstly, business model transformation; secondly, cultural and organisational transformation; and thirdly, the operational strategy for transforming the operating model and IT system.

What does “business model transformation” mean?

“Business model transformation” focuses on the following fundamental elements: the future business model of a company, the action that needs to be taken to achieve it and how the transformation needs to be implemented.


Transformation is typically a three-step process:

  1. Analysis: The initial stage is to assess the existing business model, conduct an analysis of the market or competition and carry out an evaluation of opportunities and risks within the business itself.

  2. Innovation: The second stage defines the future business model. Ideas are generated, evaluated and selected, solutions are drafted, and roles defined.

  3. Transformation: The future operating model and implementation plan are designed and developed. In this final stage, the existing business model is transformed, adjustments are made, and the new operating model is implemented.

You touched upon cultural transformation. Can you tell us a bit more about this and explain how it differs from “change management”?

Firstly, it establishes a sustainable change-oriented culture within the business. Secondly, it sees the implementation of organisational measures which establish the basis for the continuous transformation of the business and operating models. Conversely, change management focuses on a single project that aims to bring a far-reaching change across the business.


Cultural transformation, on the other hand, seeks to shift the fundamental mindset of the entire business organisation. Allaying the employees’ fear of change is crucial here. Sustainable transformation can only be achieved if employees identify with the change processes and are motivated to support innovation.

Terms such as “digital transformation” and “digitisation strategy” are almost buzzwords nowadays. Would you agree?

The terms are certainly overused these days. Companies are not “digitised”, transformation is never purely digital and there is no such thing as a digitisation strategy in my opinion. Transformation projects can nonetheless be accelerated, simplified and enabled by new technologies.


Businesses have to consider ways of exploiting these new possibilities within their overall strategy. Examples of potential uses include the customer journey, the product range, the value chain and the provision of services via digital or hybrid channels. Digitisation should always be seen as the means to the end and not the end in itself. The purpose of digitisation should be to support corporate goals, rather than going digital just for the sake of it.

About Balz Gut

Balz Gut is Head of Banking Transformation at Swisscom. He oversees the trend scouting unit e.foresight and Swisscom Banking Consulting. His role entails in-depth engagement with the innovation projects of financial institutions and the provision of support for their transformation programmes. His work therefore involves intensive discussions with digitisation managers from banks, university professors and business consultants, giving him up-to-date insights into the current trends and activities on the Swiss financial market.

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