Digital Transformation in the Finance Industry
The finance industry is uniquely poised to take advantage of digital transformation — possibly more so than any other business sector. As a matter of fact, digital transformation in finance is such a hot topic that a recent study, conducted by MIT’s Sloan Management Review and Deloitte, found that 90 percent of finance professionals believe digital technologies are somewhat or greatly disrupting the financial services industry.
What’s even more interesting is that 93 percent of financial services companies with a digital strategy are primarily focused on improving their customer experience — or CX — while a mere 46 percent of companies feel that they are adequately prepared for the digital disruption that lies ahead.
To illustrate how disruptive digital transformation is, compare it to a rock that’s thrown into a calm body of water. The concentric waves emanating from the rock represent the opportunities it unlocks — and for financial services, these opportunities can be everything from streamlined, more cost-effective operations to better performance and more desirable consumer products.
Combined, these statistics tell an important story about the growing role that enterprise-wide digital transformation will assume in the financial services sector. To help you better understand this phenomenon, the team at Consolidated Technologies, Inc. would like to take this opportunity to share our considerable IT solutions expertise to provide you with answers to what digital transformation actually is, what important digital trends are happening in the financial services industry and how you can best leverage digital transformation to your company’s advantage.
What Is Meant by Digital Transformation?
One of the most important things to remember about digital transformation — often referred to as DT — is that it has as much to do with people solving business-related problems and streamlining processes as it is about the digital technology they use to do so. For this reason, the concept of digital transformation can have a positive impact on a broad range of business operations, from in-house loan verification processes to outward-facing online banking customer portals.
Ultimately, digital transformation in finance is proving to be a successful business strategy instead of merely a technology strategy. Just think about how modern banking progressed from traditional brick-and-mortar branch offices to ATMs and finally to mobile banking apps, and you’ll begin to understand how digital technology offers everyone from customers to employees more options, greater convenience and, above all, better experiences.
As McKinsey Global Institute points out, the digital transformation of an organization is typically assessed by the use of three key indicators: the company’s number of digital assets, the proliferation of digital usage and the level of trained digital workers.
Digital Trends in Financial Services
Digital transformation in financial services in 2018 involves some of the most exciting trends the world of technology has ever seen resulting from the myriad applications of artificial intelligence (AI) to the hyperconnectivity of the Internet of Things (IoT). These trends include:
- Agile enterprises: After the many lessons learned from the last financial crisis, a company’s ability to increase its agility — otherwise known as its capacity to respond effectively to a disruptive environment — is a key trend in the industry. But to support the type of continuous innovation and improvement that forms the cornerstone of agility, financial institutions need fast, reliable access to growing amounts of data without creating time-consuming manual labor processes.
- Increased collaboration: As business leaders across multiple industries embrace the team structure as an operational model and accept the democratization of data, nowhere is the need to collaborate as strong as in the financial sector. Of course, financial enterprises still need to adhere to strict regulatory standards that enforce a siloed approach to select business units. Nevertheless, for other business units, the ability to effectively communicate and work collaboratively can mean the difference between getting to the finish line first and not getting there at all.
- Risk assessment: Whenever financial services organizations can improve their risk assessment capabilities, they quickly reap the rewards. This fact means that the collection, storage and analysis of big data is of the utmost importance to a financial services firm. For example, the fast and accurate completion of a due diligence process before a large merger and acquisition can make life-changing differences for the investors, companies and employees affected by it.
Leveraging Digital Transformation in the Financial Services Sector
By reaping the benefits of digital transformation, financial services with a robust digital strategy will see improvements from the following advantages:
- AI supports better decisions: Eliminating human-induced errors — ranging from miscalculation to misfiling — and increasing a company’s access to more real-time data facilitates better decision-making abilities. When deals are on the line, everyone involved benefits when the decision-makers have more comprehensive and timely reports at their disposal. This need is why AI that continually learns and improves upon repeatable processes can be a real game-changer.
- DT attracts talent: It’s no secret that nearly half of today’s financial professionals are considering leaving their present organization if they’re not given better access to the training and tools they need to take advantage of digital transformation. What this development means, of course, is that not only will companies that embrace digital transformation be more agile in the future, but they’ll also attract better and more innovative talent. This talent ultimately forms the crucial bridge between tech and humans, making digital transformation work successfully for an organization.
- Automation engages customers: The outward-facing potential of digital transformation is huge when it comes to attracting, engaging and tracking customers. In a world of always-on, always accessible online opportunities, financial services will rely more and more on efficient, automated platforms to provide customers with an improved CX while simultaneously collecting crucial data regarding their progression through the purchase and lifecycle of products and services.
Powerful Solutions From Consolidated Technologies, Inc.
To learn more about digital transformation solutions for financial services organizations, contact our expert team at Consolidated Technologies, Inc. We have more than two decades of experience helping over 2,000 companies successfully implement customized IT products, and we’re ready to do the same for you. Fill out our contact form, or call us today!