Dear readers, the 7th part of Fintech series sheds light on the top priorities for financial institutions.
Prioritizing what needs to be focused on is an important exercise for every financial institution. To benefit from these technology developments, we recommend that financial institutions focus on 5 key priorities:
- Improve the Digital Customer Experience
As consumers increasingly make decisions based on the ease with which they can interact with their financial institution, competition around the customer experience is giving rise to new roles and titles within the banking industry. The challenge has been that, while a majority of financial services firms are in the process of expanding their CX projects – especially as it relates to both digital and mobile engagement – there is still difficulty in gaining resources to pursue new projects.
More than any other priority, improving the customer experience was the most consistent in level of mentions across asset categories, type of organization and location.
- Slash costs
Incumbents carry a huge burden of IT operating costs, stemming from layer upon layer of systems and code.
- Simplify legacy systems
Legacy core systems and their related integration architecture are expensive to maintain and complex to modify. To stay competitive, this will invariably mean that they will selectively decommission legacy systems and integration infrastructure. They will also need to develop new capabilities that run in parallel.
- Adopt an aggressive SaaS-based model
Cloud-based platforms will allow financial institutions to bring innovations to market quickly and test and adapt as they go. These developments provide many opportunities to reduce costs, through economies of scale and new application support models.
- Deploy robotics and AI-based automation
A PwC estimate suggests for more than half of the activities people are paid to perform can be automated by adopting advanced robotics and AI – either now, or surprisingly soon. By learning now about the technical and culture issues, you will be able to gradually increase adoption of it across the enterprise, rather than doing it under duress later.
- Prepare your architecture to connect to anything anywhere
To stay cost-competitive, and to have the flexibility that innovation requires, financial institutions will need to update their infrastructure to make it more agile and responsive. You will need an architecture that can bend as requirements change and interact with data and systems that could be anywhere – because they will be.
- Regulation remains top priority for financial services
While digital innovation is at the heart of businesses, financial services firms need immediate solutions to the problems they are facing today. Regulation is part of almost every banker’s 2017 priorities list. It is the uncertainty of future regulations that could be prompting inaction or staving off innovation. Global events like Brexit, the results of the US election and the threat of Frexit among others, have also created an environment of regulatory uncertainty that will prompt more steering committees in 2017 to assess options and develop plans that can be quickly enacted at the trigger moment.
- Human Capital
There is a need for a new wave of digitally aware and technology adept employee.
- Developing Dynamic Workforce
A focus on strategic workforce planning will help enable a proactive redeployment of skills and better integrate HR with other areas of the business. Recruitment should be concentrated on workers with multiple skill sets that can be further developed internally to adapt to a variety of roles.
- Digital ‘talent exchanges’
Organisations that engage with transparent, digital talent marketplaces that provide two-way employer/employee feedback will have a distinct advantage in this scenario.
Giving the potential employee a greater awareness of life within the organisation. This can be done through shadowing and short-term trials, as well as the development of technology allowing the integration of gamification and virtual reality.
- Corporate learning and development
Employers may soon find it necessary to have a greater involvement in the creation of educational opportunities for incoming workers in order to ensure their skills needs will be met. This can be achieved by working with non-traditional sources of talent, offering online courses, creating apprenticeships and partnering with education institutions.
(References: PwC, icas.com, thefinancialbrand.com)