By Lavanya Kaul, Head of Customer Success, BFSI, UK&I, LTI
Article synopsis: Focused on the digital transformation of the banking and finance sector, and how recent events and changes in the way people work are playing a part in ecosystem. The article looks at the impact of cloud and data, and how the right technology can support companies in their digital journey, migration to the cloud, and the benefits that they will reap.
It was only a decade ago that the finance sector began to join the digital revolution. The monopoly of the long-established institutions, with their traditions and – arguably – resistance to change, meant that while other sectors were transforming operational and business models, financial services organisations remained largely remote from the internet and its attendant benefits. Processes were rigid – and there was a lot of paper involved.
How times have changed. Over the past few years, the financial sector has evolved, driven by the emergence of new players leveraging the power of the cloud, automation, and AI-assisted data analysis and management. As well as the overall shift in technology, the momentum has come from the employees – millennials who saw the potential of digital and start-ups that began to disrupt the staid world of banking and finance.
Staff turnover was high in the beginning though – change was not fast enough for the digital natives and while they joined the sector with high hopes, they quickly moved on. Latterly, and accelerated by the pandemic, there has been a far more rapid adoption by the sector of new tools and new ways of working. The paper has been pushed away.
More direct connections
The consequence of the digital catch-up, however, means that financial services are now competing with other sectors for talent – there is a huge shortage. All companies, not just in finance, have needed to look beyond the customer experience and become far more employee-focused, far more flexible, and now recognise the importance of work/life balance in order to attract and retain the best staff.
Although initially slow to react, finance companies are now turning to digital technologies. The pandemic was a key factor in incentivising the sector to become fully data-driven. With tools to enhance labour productivity, technology has also transformed the ways of working, sharpening the focus on the employee experience. Digital upskilling is being achieved through the use of collaboration tools and gamification strategies to engage with both employees and customers.
The most important contribution to the digital transformation has been the arrival of the cloud. With the ever-increasing data deluge, cloud computing means data can be analysed and managed in a meaningful way. The route to relevant, actionable insights is far quicker with cloud-based services, and third-party applications can be easily integrated and exploited. There are of course also the basic cost-savings of hardware upgrades and legacy platform management. While financial companies used to spend huge amounts of time and money building their own service offerings, now they can have software-as-a-service (SaaS), which automatically keeps them up to date with the latest software. Business improvements can be made immediately after the new software is available – it’s a minimal OPEX model that allows businesses to be agile, adaptable, compliant, and risk free.
Fail fast to succeed
The key to a successful digital transformation is to adopt a ‘fail-fast’ approach. While a long-term plan or roadmap is still needed, the beauty of digital is its flexibility. It enables businesses to be agile and dynamic. If something is not working to the advantage of the business, drop it and move on. Work with short windows of opportunity and timescales.
The pandemic has provided a great example of how our customers have benefited from the agility of digital services. With the closure of branches and offices, financial services companies were inundated with calls from customers looking for advice and support. Failure to respond to these demands quickly and efficiently has had a massive impact on the perception of not only the financial services brand but its perceived health and ability to survive in an unprecedented situation. The rapid development of a conversational AI platform has not only helped our clients avoid a negative reaction, but it has also drastically reduced the workload of their call centre staff and greatly improved customer service levels.
Supporting clients with their cloud migration has highlighted the benefits of the digital transformation of the finance sector. Our work with a Hollywood wealth advisor to build an analytical engine for examining positions, portfolio construction, client preferences and more has assisted them in generating personalised investment analysis reports, and helped them transform their services to their high-net worth clients.
Digital platforms can modernise and/or replace legacy systems, providing scalability, reducing cost, and enabling a much more rapid time to market for new products and services. Cloud requires no enormous upfront investment or stifling licensing costs. It enables financial services companies to remain competitive, without worrying about technology cycles. Organisations that are slow to adapt in today’s climate will not succeed – the competition will be out in front.
