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DIGITAL TRANSFORMATION: BRINGING IT TO THE FOREFRONT IN 2021

We know that 2020 has undoubtedly been a year of change and forced many businesses to rapidly adopt new practices and operational models; across all spectrums of the business from HR to marketing to finance. At the heart of these changes has been the concept of technology, empowering and supporting employees working from home, and assisting them in streamlining organisational processes, enhancing efficiencies whilst ultimately and adding value at a time when businesses needed it most.

As 2021 is in full force, organisations need to place greater emphasis to their digital transformation journeys, embedding it within all departments of the business and using data to drive actionable insight and excel top-line growth from remote locations.

 

Senior Director of Business Solutions, John Faucher,  at SplashBI examines how organisations can untap the exponential use of technology much more effectively to help improve sales and marketing campaigns, retain and capture the right talent whilst reducing the  financial reporting headaches from mundane activity.

 

Digital transformation journey

‘Digital transformation’ has been a term adopted by the majority of well-established businesses over the past couple of years and has unquestionably been the top of many heated boardroom agendas. But there is now little reason for businesses not to adopt digital technology; digital technology should be embedded within all departments of the business to ensure that customer expectations are exceeded (and beyond!) and that value is being delivered not only effectively and efficiently.

In order for digital transformation to be successful, a cultural shift is required from everyone in the organisation; it needs ‘buy in’ of the employees and they must recognise that changing processes and challenging embedded practices will not be a walk in the park. With the right attitude, organisations  can strive towards business goals and drive services to the next degree.

Moreover, in order to be victorious and ensure return on investment is generated, digital technology must be implemented within every department and not singled out to purely product development or IT where strategies are likely to be deployed first. Instead, the processes within every department, from finance to HR to sales and marketing, must be reviewed to ensure that technology is making the department work smarter, and therefore benefiting the entire organisation as efficiently as possible.

 

A win-win for the whole business

With a collective approach to digital transformation, the true advantages can really be acknowledged and worked upon.

 

Example One: The finance department

The company’s financial reporting processes can be transformed with a data-driven approach, removing the headache of manual, repetitive, time-consuming data input and analytics. As a result, this frees up time for other priority tasks such as forecasting and reporting on results to senior leadership with visual, easy to digest data dashboards.

 

Example Two: The HR department

HR can use a data-driven approach to take the guesswork out of its hiring process and ensure all new recruits are based on desirable characteristics of existing employees and team culture. By profiling the standout or rising star employees within the business and understanding what key attributes these employees have, the HR team can ensure they are attracting talent that will compliment the business and contribute to its future goals. Additionally, embedding digital technology in the HR department and adopting a data-driven approach will not only help to attract the right talent but also retain talent, which in the current turbulent pandemic is extremely important.

 

Example Three: Sales and marketing teams.

Extracting manual data reporting on lead generation and marketing campaigns will free up time for the sales and marketing teams to focus on other lead generation activities or how to increase engagement on social media channels. Implementing a digital-first approach within these departments will help the organisation to become far more strategic in its approach to attracting and winning new business and will be in a better position to meet its business objectives.

 

Making data and technology a priority

Digital transformation is certainly not a new advancement, but it is something that many businesses still need to recognise as a positive step forward. Improving systems and changing archaic processes within the entire organisation might seem daunting and time consuming, but with recognition amongst every team that a data-driven, digital-first approach will reap significant rewards for the future of the business, the change can be readily adopted and the transition can be uninterrupted. Businesses might not always get it right the first time, but learning lessons and failing fast with a quick recovery will bring long-term gains.

In almost every case of digital transformation, the wheel does not need to be reinvented so the next digital transformation project should be a continuation, with more confidence gained each time. As 2021 quickly unfolds it’s time for organisations to step up and make their businesses truly data- and technology-driven before it’s too late!

 

Banking

DATA: THE MUCH-NEEDED PROCUREMENT ADRENALINE SHOT, HELPING BANKS REMAIN COMPETITIVE IN THE RACE FOR INNOVATION

By Toby Munyard, Vice President, Efficio Consulting

 

Like a flip-switch, the pandemic saw many industries pushed over the innovation tipping point, accelerating digital transformation efforts at a pace never seen before. After all, consumer behaviour has changed dramatically – a lack of face-to-face contact with businesses has meant that organisations are having to turn to digital methods in order to keep customers engaged. Meanwhile, the sudden shift to remote working has put immense pressure on organisations to digitise internal processes.

For the world of banking, the need to continuously drive innovation has been a key pressure point for many years. And now, that pressure is building. Challenger banks, such as Monzo, Revolut and Starling, continue to cause huge waves within the financial services industry, due to their digital-first approaches. These, often start-up brands, have the advantage of operating nearly solely online, with none of the legacy systems in place to hold them back from innovation. However, even these brands haven’t been immune to the vast impacts of COVID. Consumers are getting increasingly tech-savvy, and operating on a digital-first model is no longer enough in its entirety. In today’s increasingly competitive environment, banks must modernise their entire technology functions to support both the front and back ends of their businesses.

That said, in such a competitive environment with rising cost pressures, innovation of this kind can feel out of reach for banks. After all, banks are often a low-growth environment, and optimising the cost of operations can typically take at least five years or more. Another key sticking point for banks when pursuing innovation is the added complexity and costs surrounding regulation. Unfortunately, regulation is part and parcel for any financial service. And new innovations and product offerings will only increase the need for compliance.

So, with myriad challenges facing the industry, how can banks compete in the race to innovation?

 

Optimising costs

To be able to invest in a digital-first future, the journey begins with the procurement function. Whilst it is impossible to have complete control over revenue, one thing a business can control is cost.

Effectively optimising operational and business costs will be key to freeing up valuable liquidity to fund new digital initiatives. But this requires a proactive approach to supplier management. Rather than relying on supplier rebates once a deal is done, the CPO (Chief Procurement Officer) must effectively influence and ensure efficiency from the beginning of a relationship to achieve significant savings.

For existing suppliers, a step change may be required in order to steer this initiative. Getting the right supplier onboard and having forward-looking conversations about new trends in the market will be pivotal. After all, these suppliers will be key to driving digital plans forward. Suppliers providing products and services where demand is declining should not be neglected. Chances are that because of the trends in the market, they are keen to maintain and gain as much business as possible, meaning preferable deals may be available.

In addition to effective supplier management, a review of internal systems is urgently needed to aid cost-reduction on a long-term basis. Traditional banks are often made up of a range of complex legacy systems that allow for very little flexibility in a new digital age. The key here will be to simplify these systems, whilst integrating solutions such as robotics, AI, and SaaS to ensure they are running as efficiently as possible.

 

Data – procurement’s secret weapon

To be successful on any cost-reduction mission, however, the CPO must be aided by accurate, up-to-date, intelligent data. Without it, the long-term, sustained change needed to outmanoeuvre new market entrants, simply cannot be achieved.

After all, the intelligence derived from good, high-quality data provides the CPO with much-needed visibility in which informed decisions over cost-reduction can be made. It is only with this visibility that organisations can identify opportunities and deliver efficiencies that lead to sustained cost savings.

Architecture that can effectively connect to anything, anywhere, will be an essential tool to ensure the CPO is presented with all the relevant data – for example, linking enterprise databases, data warehouses, applications, legacy systems, and Cloud services to comparable systems at partners and suppliers. Integrating with apps, wearables, and mobile devices at an individual user level, and using an enterprise mobility strategy to link to employees and contractors and third party ‘big data’ sources, will also help to provide a complete view.

 

Harnessing the power of data

Whilst a necessary tool for procurement, being faced with a mountain of data can be overwhelming and actually hinder performance if it is not captured and interpreted correctly. Typically, within financial services, there is a huge amount of data being captured within Enterprise Resource Planning (ERP) and other finance-based systems that is not being analysed. As a result, efficiencies are missed, and the organisation remains stagnant in the digitalisation journey. To truly harness the power of data, the procurement team must ensure it has access to the right skills and have the right talent in place. This may require additional training, or consultancy to leverage data effectively and to execute successfully in today’s agile and fast-paced environment.

Ultimately, to remain competitive, banks must put the power back into the hands of procurement. By providing the CPO with the right tools and responsibility, the procurement function can align to the strategic targets set out across the business.

Good data, when teamed with effective procurement capability, will be a much-needed adrenaline shot for finance companies. Whilst challenger brands may only be running a 400-metre sprint in terms of digitalisation, in comparison, traditional banks are running a marathon. Stamina and the need for long-term efficiencies will be pivotal to win in a race of innovation.

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Technology

FOR FINANCIAL INSTITUTIONS IN 2021, INTELLIGENCE IS A MUST

By Ed Lane, VP Sales EMEA, nCino

 

Artificial intelligence (AI) is quickly transitioning from a “nice-to-have” technology to a key business driver for financial services organisations. Over the past few years, financial institutions (FIs) have begun to think about AI beyond the abstract and are discovering the many practical and profitable use cases for this emerging technology. A growing number of FIs have started truly understanding the importance of using AI to enhance the customer and employee experience.

As AI becomes demystified and valuable use cases emerge, FIs are becoming more attuned to the idea of adopting these technologies across a wide range of key business functions. In 2021, the time has come for FIs to evolve beyond agility and embrace intelligence by incorporating cognitive technologies into their operations. When FIs fully harness the power of AI to capture deeper customer insights, make informed, data-driven decisions, manage risk and increase efficiencies, they transform themselves into Intelligent Enterprises and bring more value to their customers and teams.

 

Agility is the Launchpad

Any discussion of the Intelligent Enterprise begins with an understanding of the Agile Enterprise as the necessary foundation. The idea of the Agile Enterprise centers around the industrialization of banking, the idea of turning every core banking function – from product development and customer acquisition to account opening and commercial lending – into a systematic, fast and seamless process. It necessitates a configurable and flexible system of engagement that allows multiple users – including executives, staff and customers – to collaborate in real time, with full transparency and visibility into every step of the process.

To fully leverage the Intelligent Enterprise, it is essential to first enable the Agile Enterprise. It would be incredibly difficult for an institution to effectively and efficiently make the leap into AI without first having established a strong foundation to support the myriad of back-office processes, including customer relationship management (CRM), document management, collateral analysis, covenant tracking, loan origination, portfolio analysis, regulatory compliance, customer service, the digital channel and on and on. Once an institution has established a foundation of agility through a single system of engagement, it can begin the journey toward becoming an Intelligent Enterprise.

 

AI is the Rocket Fuel

AI and related technologies, including machine learning, natural language processing and cognitive computing, serve as the foundation of the Intelligent Enterprise. There is a broad array of current and potential use cases within financial services for AI and related technologies, ranging from robo-advice and next-product recommendations to anti-money laundering (AML) compliance and credit card fraud protection.

Within the Intelligent Enterprise, cognitive technology can be utilized to bring a true return on investment to the institution. FIs need actionable insights to maintain competitiveness and serve their customers’ needs. The successful deployment of the Intelligent Enterprise checks one or more of these boxes to varying degrees, depending on the specific use case: increasing revenue, growing profitability, improving efficiency, reducing costs and mitigating risk. Embedding cognitive technologies into core banking processes can present FIs with measurable results, a positive ROI and benefits that continue to increase over time.

 

Challenges Along the Flightpath to the Intelligent Enterprise

All of this is not to say that widespread transformation to the Intelligent Enterprise will come easily. Incumbent financial services firms of all sizes come burdened with long-held processes and systems that serve as barriers to change. The industry faces a number of daunting challenges, including the burden of legacy systems, slow adoption rates, talent acquisition, competition from Big Tech and fintech upstarts, regulatory overreach and connecting the prediction with the customer.

The key is to focus on seamlessly incorporating cognitive technologies into existing processes while also maintaining a human touch with customers, i.e., to build AI solutions that engage employees and put the customer first. The most effective way to achieve this ideal is through the deployment of a single platform, a system of engagement that seamlessly integrates and analyzes data from all customer channels and across the organization. Only with the foundation of a truly holistic platform, which allows every employee to have access to the same information, can the Intelligent Enterprise really begin to take flight.

 

Achieving Orbital Flight Requires a System of Engagement

For FIs, the journey to the Intelligent Enterprise begins with defining the value you desire to achieve through the implementation of AI and related technologies. Too many FIs begin by building the rocket mid-mission – by creating the infrastructure without first understanding the true ROI of the endeavor. Start by choosing one use case that will return value to the organization – whether it is streamlining the financial statement data capture in commercial lending, employing next product to sell capabilities in retail customer onboarding or implementing risk-based pricing to help meet consumer fair lending compliance requirements.

Next, decide whether to buy or build the technology. For FIs that do not have the benefit of massive resources to create their own software, partnering with a vendor like nCino that has the expertise, experience and a track record of success working with AI-driven data insights may likely be the better option. Our AI application suite, nCino IQ (nIQ®), supercharges the nCino Bank Operating System® by leveraging AI, analytics and machine learning to enable FIs to become more predictive and proactive. nIQ offers an FI’s employees the opportunity to do more for the institution by, for example, saving valuable time through automatic data extraction and analysis of tax returns and financial statements. It’s no longer just about convenience, it’s about increasing profitability, safety, soundness and growth in a customer-centric banking world.

 

Conclusion

AI and cognitive technologies are transforming banking. They are enabling FIs to increase revenue, gain operational efficiencies and fully meet customer expectations. With this type of technology in place, FIs no longer have to spend time on cumbersome, manual tasks but can offer employees the opportunity to do more for the institution by saving valuable time. 2021 will be an exciting year as FIs continue to adopt new AI tools to transform the customer experience.

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