Interesting Times in the Financial Services Industry: A Call for Digital Transformation
For the last decade, digital transformation has been front and centre in every C-suite strategic discussion and business road map. Companies like Uber, Amazon, Netflix and AirBnB have re-imagined the way that customers interact in their respective industries — to the detriment of existing players in the market. Today, hailing a cab seems as laughably outdated as renting a VHS tape. Yet, change has been slow to affect the world of financial services, where physical documents and brick and mortar facilities still rule the day.
Despite the strategic importance of avoiding the fate of Blockbuster and Sears, digital transformation initiatives have been viewed as important but optional. Something to stave off a potential boogeyman that may be lurking around the corner, poised to eat your lunch. This is especially true in the financial services industry, where organizations have been sheltered from the forces impacting industries like retail. Now, disruption has taken the form of a novel Coronavirus sweeping the planet in a matter of weeks, with all indicators suggesting the crisis will have a lasting global impact.
May you live in interesting times, an apocryphal quotation evoking times of rapid change, has never felt so relevant. Digital transformation is no longer an option for any industry. Financial services organizations will need to adapt in order to survive.
It’s time for financial services to let go of the analog
Those of us within the Financial Services community know the industry has been behind the curve when it comes to modernizing offerings from both a customer and operational perspective. We live in a crowded, complex marketplace where regulation and the status quo have kept customer expectations at bay for the last 50 years. Visits to brick and mortar locations are still necessary. Additionally, we need to sign documents, perform Know Your Customer (KYC) activities, meet with advisors and handle non-standard activities. Fundamentally, we are still dependent on in-person interactions to handle the last mile of big financial transactions. From a customer perspective, it’s challenging, but not a game changer.
Behind the scenes, documents of all kinds are triggering manual processes across many systems. Or, if documents don’t exist, these processes can grind an organization’s gears to a halt. KYC documentation, collateral documents, ISDAs, purchase orders, legal agreements, consents to share, privacy documents — the list is long. These documents generally still exist in paper form, which necessitates manual processing. This is to be avoided even in the context of business-as-usual. In a COVID-19 world, with a work-from-home distributed middle-office, how are these processes sustained? Who handles these forms?
Further, how will call centres operate when they have to work remotely? Many are unable to adapt to this scenario, relying on an architectural backbone comprised of on-premise software and infrastructure. Basic functionality like call queues and routing are all hardwired into most facilities. Distributed routing often isn’t possible; and certainly not to the extent that is required in times like these.
The good news is that transformation is very possible, even in a COVID-19 world.
Embracing transformation within financial institutions
Digital transformation cannot be looked at simply as a goal that we aspire to. The evolutionary pressures on our businesses are not limited to a small team of developers in Silicon Valley. We have to look beyond that. Between the rapid spread of epidemics, the growing impacts of climate change, risk of civil unrest and other force majeure, we must be able to service our customers in any situation, no matter how varied.
These interesting times will require us to invest in tools that enable our employees to function in a distributed model and collaborate effectively. They will require the redesign of processes and procedures from the ground up, making few assumptions to allow for flexibility. They will require galvanized operations throughout the customer life-cycle to ensure the continuity of our businesses regardless of the scenario we find ourselves in. And, most importantly, they will require prioritization by our leadership, so we can make those investments today.
For every financial services organization, digital transformation is going to look different. Your journey might include:
- A self-service customer portal to exchange onboarding documents
- A consolidated customer engagement platform to coordinate customer-facing teams
- A mobile-first journey for customers to find financial assistance and guidance
- All of the above
Your first step should be to find a partner with experience in successful digital transformations across the spectrum of sectors and solutions. You and your partner should look to bridge the gaps between “what we need to do,” “how to get there,” and “what’s next.”
We know that transformation can be daunting — we’ve lived it. To support COVID-19 precautions, our entire workforce was remote-enabled in the span of an afternoon, allowing our operations to continue without a hiccup. Above all, you’ll need trust and transparency between your team and your partner to act quickly.
Charting a path to digital transformation
As our world moves forward, major disruptive events will grow more and more frequent. Therefore, organizations that have adapted to a full digital posture will be able to weather the storm and thrive in the chaos. Those that cannot will be tomorrow’s Blockbuster.
Even within the financial services industry, there is no one-size-fits-all approach to digital transformation. Reach out to us below to start a conversation about the best course for you to take through these turbulent waters.
Written by Dan Waldner, Principal Strategist, Financial Services
Dan is a 25-year technology veteran with a software development background. He has spent 15 years in the Financial Services industry, predominantly in the Enterprise Banking space.
After joining Scotiabank in 2008, Dan took ownership of Scotiabank’s Salesforce team. He managed four instances with over six thousand licenses across 12 countries.
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