The digital transformation of financial services is booming

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Executives and IT decision-makers in the financial services industry believe the cloud will be the most important technology to the success of their organizations over the next 12 months, according to a joint report from the Economist Intelligence Unit and Appian. Luke Thomas, APAC vice president at Appian, reviews the report’s key findings.

During Covid-19, the cloud proved it can help financial services organizations scale their operations quickly and efficiently. Collaborative tools that were previously used occasionally are now used almost continuously.

Another clear example of cloud-based digital transformation in financial services during the pandemic is the shift to online models only for customer service. In a recent report, EY referred to the “incredible transformation” during the lockdown, with the big banks shifting almost all of their interactions with customers to digital channels, such as websites and mobile apps.

Faster use of digital channels

Neil Morgan, COO of Australian insurance giant IAG, has witnessed a similar transition in his business. At the start of the pandemic, IAG saw app usage at NRMA Insurance – which is one of the company’s main brands – increase by more than 50%. Morgan says the company continues to see “very high levels” of app use in renewal business, new business listings and insurance claims.

“Covid-19 has definitely boosted customers’ appetites to use digital channels, which they may not have done historically. The question over and over again for us is to what extent we can benefit from this change in behavior, ”says Morgan.

European Bank Capital One has gone through a similar transition. The bank’s mobile app is its main channel for customer service in the UK. However, some customers still prefer to speak with an assistant on the phone – and this was not always possible at the start of the pandemic, when call center operations were affected by the transition to working from home.

Joe Soule, chief technology officer at Capital One Europe, says the bank’s long-standing investments in digital automation have enabled it to continue to serve customers in a variety of ways online. Rather than going straight to the bank’s app, many customers who traditionally used the phone started using the web channel as a first step towards digital interaction with the business.

Digital transformation to get out of the pandemic

Financial services organizations should use these operational successes to advocate for further digital transformation. Based on their experiences with the pandemic, more than four in five financial services executives (81%) believe their organization needs to improve its IT infrastructure and applications to better adapt to external changes.

What are the main obstacles to achieving your organization's digital goals

Research is also providing evidence of increased demand for digital automation. Almost three-quarters (71%) of IT decision-makers in financial services say the growth in requests for technology projects exceeds the growth in the IT budget, which is above the global average of 64%.

Financial services IT teams will need all the support they need to handle this continuous development workload. One potential aid is robotic process automation (RPA), which can be used to help reduce the pressure of repetitive tasks in businesses, including software development processes.

Application development is a resource intensive activity, both in terms of human resources and costs. Thus, cloud and automation can help financial services companies standardize their operations and bring their products to market securely, effectively and efficiently.

Further reading: What lies ahead for cloud adoption in financial services.

Automation is rated as one of the most important focus areas over the next 12 months by 31% of financial services executives. Respondents expect cybersecurity to be at the center of automation efforts (43% suggest this will be one of the three priorities). Innovation and R&D (35%) and customer-oriented processes (34%) are seen as other priority areas.

As for, about two-thirds (66%) of IT decision makers in financial services suggest that RPA efforts often fail. In addition to having access to better data, 42% of respondents believe that closer collaboration between IT and business units will help their organization meet its automation goals.

Across your entire IT project portfolio, what is the average number of months projects have been on hold over the past year?

Breaking down silos to accelerate automation

Research highlights how a strong business-IT connection is crucial to overcoming IT delays and meeting digital transformation goals. IT needs to partner with business units to determine how technology solutions can solve business challenges.

Agile leadership techniques play a crucial role in this partnership approach. With its origins in software development, Agile management – which uses techniques such as iteration, stand-ups, and retrospectives – promotes decentralized decision-making within collaborative teams.

The most unified, comprehensive views of automation in financial services organizations deliver the greatest benefits. This is because unification seamlessly delivers benefits for the customer experience, employee satisfaction, and the future of the organization, as well as support for risk, compliance and management. change, as well as business strategy.

Solutions like low-code can help financial services companies break down silos so IT and business units can work together effectively. Low-code is designed to unify all financial services systems, databases, channels and customer information, as well as bring people, processes and data together through automation: robotic process automation, artificial intelligence ( IA), workflows, etc.

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