Lindsay Lucas, Managing Director, Software Solved takes a look at digital transformation.
The financial sector has become increasingly complex given changing market dynamics. New competitors, disruptive technologies and shifting consumer expectations all point to industry that is ripe for change. To remain relevant, companies need to adapt or being left behind.
After two years of unprecedented upheaval, economic disruption, and political uncertainty, we’re beginning to see the light at the end of the tunnel. With 2021’s global rollout of multiple COVID-19 vaccines, consumer confidence should increase, companies should be more bullish, and economic activity should start to resemble what it was pre-pandemic.
Digital transformation is crucial for long-term business success
As banks, investment management and wealth management firms, and financial technology (fintech) companies recover from COVID-19’s financial and operational impacts, some will need time to reset and reimagine their growth strategies for the next new normal.
Digital transformation is increasingly critical to long-term business success, but it also brings with it an urgent need for greater agility, improved transparency, and more efficient end-to-end processes across the enterprise.
To stay competitive, it is important that the finance sector invests more in digital transformation. According to a recent Ernst & Young study, 61% of respondents found that their systems and tools are not sufficiently future-proof. Far less than half use cloud solutions while 95% still use spreadsheets or similar.
Unlocking business potential through customer centricity
Taking a customer-centric view of how to manage this evolving landscape means understanding where to unlock the potential of a financial services brand and the relationships it has with its customers.
Digital acceleration shows no signs of slowing down across the finance sector, as consumer expectations and operational complexity grows. Technology capabilities must remain central to corporate strategies and to build market position. In 2022, M&As will look to leverage data and implement solutions to address cyber security concerns and drive operational efficiencies.
Modernising digital legacy infrastructure will also feature prominently in the finance sectors 2022 M&A plans, helping the sector to reposition itself in the post-pandemic marketplace. Digital transformation is creating substantial capabilities and a performance gap (which is being monetised) between agile analytics and AI enabled organisations and those that haven’t developed this yet.
Third-party software providers can help release value
Third-parties are becoming a fundamental component for the sector, creating room for financial institutions to focus on strategy, innovation, growth and development, operational efficiencies and living up to the growing demand from customers. The finance sector needs to look at third-party software providers that focus on an adaptable approach to change so that value is released on an incremental basis, helping finance companies to tap into their full potential to remain and gain relevance in the future.
The right tools, using the right third-party support can create a new foundation of extensible data on which a new stack of flexible, agile services and tools can be purpose-built for what the finance sector needs to do today. Like any industry, financial institutions that are able to adapt quickly, understand what their customers want and provide a trusted service are the ones likely to prosper.