Digital Transformation for Financial Services with ServiceNow
Financial services companies are at a tipping point in IT transformation. With intense market pressures across the industry, including nimble disruptors, complex regulations, digital native customers, and the aftermath of the global pandemic, technology transformation is no longer just a competitive advantage. It has become an absolute necessity! Simply put, the widespread adoption of cloud computing and big data analytics, new forms of engagement, and evolving customer expectations are changing the financial services landscape. Companies leading the way into this new era are reinventing the customer experience, fostering new work cultures, streamlining operations, and driving product innovation. They do this by analyzing and managing big data in a timely manner, leveraging large-scale, scalable, and affordable advanced technology and analytics infrastructure to meet the demands of their digitally savvy customers.
For some time, technology has been able to combine the IT ecosystem with relationship and financial management software and advanced analytics infrastructure for predictive analytics and machine learning. All connected through a common data platform within a common database. In an industry where business processes can be diverse, implementing a single ecosystem across multiple business units can be transformative, helping financial services firms increase profitability, increase revenue, and invest. The focus being on optimizing and helping position business for long-term growth.
Organizations that fail to recognize this opportunity risk being left behind, as do those that overestimate their digital progress. According to a global survey, 74% of decision makers in the financial services industry said the COVID-19 pandemic has revealed more gaps in their operations and systems than they had originally expected. increase. 71% of respondents said the experience forced them to accelerate their digital transformation plans. 62% say they will make digital transformation a priority within their organization. And 56% say they will increase their investment in digital transformation.
The importance of a digital transformation strategy should not be underestimated. Awareness is the first step for CEOs and C-suite managers. The second step is to develop and execute a plan that the leadership team can take to address the necessary culture, systems, and skills updates. The plan can grow and adapt as the financial services environment changes. This is his second step. This post discusses the benefits and implications of digital transformation for the financial services sector and offers advice on how to accelerate organizational change.
Financial Services Industry Landscape
There have been many changes in the financial services industry in recent years. As recently as 2017, companies took a passive approach to operational optimization, maintaining the status quo rather than improving competitive performance. It was in 2018 that the industry experienced a fundamental shift.
- Emerging tech, cloud computing is the new status quo
- Analytics can unlock the hidden potential of operational and customer data
- The rise of the digital economy has created opportunities for companies to expand into new markets
As a result, financial services firms have moved from a reactive to a proactive stance by using new technologies to foster innovation and drive long-term sustainable growth. That brings us too today. Continued momentum across cloud and modernization driven by the need for resilience, an industry-wide shift to customer centricity, and the urgency to rethink existing offerings and introduce new offerings to remain competitive can be seen.
What are the contributing factors for the emphasis on digital transformation?
For example, online and mobile banking have significantly reduced the need for brick-and-mortar stations, reducing the number of physical branches from 94,725 in 2014 to 88,075 in 2018. The COVID-19 pandemic has accelerated this trend as banks have been forced to close branches due to security concerns. The emergence of fintech has spawned several new players looking to compete with traditional financial services companies. From payment processing to alternative financing to automated investment and wealth management services, consumer choices are greater than ever and are just a click away. Many of these new fintech companies not only offer convenience and functionality to consumers, but they are also built on the cloud from day one, allowing them to innovate faster than their incumbents.
Traditional financial services companies have slowed their move to the cloud due to security and privacy concerns in a highly regulated industry. This hesitation is a barrier to change for many financial organizations that have worked within the confines of traditional technology. These days, cloud providers can guarantee that data is protected and secure, creating a more welcoming atmosphere for financial services organizations.
Banks aren’t the only ones looking for cloud-based solutions. Insurance companies also benefit from this. Thanks to cloud computing, insurers can invest the money they would otherwise spend maintaining their own physical servers or purchasing additional computing resources to launch new products and services and offer more scalable services. Accelerate model development and time to market. Cloud-based solutions provide insurers with business agility, enabling them to quickly respond to increasing consumer demand and major market changes.
Millennials have outpaced both baby boomers and Gen X in a small portion of the population, with Gen Z on track to overtake them. For companies around the world, this means that most of their potential customer base are now digital natives. That is, people who grew up in the digital age are comfortable using the Internet and various other technologies. This rapid demographic shift is driving a transformation of the financial services industry, forcing businesses to rethink how they market and sell to this overwhelmingly online audience. With the rise of social media (82% of the U.S. population says he has at least one social media profile), financial services companies are looking to shape their brand identity, market new products, and reach out. It has become a powerful tool that can be used with customers and so on.
Beyond social media, these virtual natives assume their banks and coverage vendors to be as technologically savvy as they are. For proof of this, appearance is not in addition to fintech, which has won enormous marketplace percentages because of its use of progressive technologies, along with synthetic intelligence (AI), biometrics, blockchain, and virtual payments. In nearly all cases, those structures are designed to optimize consumer enjoyment by making it quicker and greater convenient — traits that virtual natives prize. If conventional monetary establishments are too sluggish to undertake a virtual transformation approach and adapt to the shopping for behaviors of this new, younger cohort, they might discover themselves beside the point in a virtual-first world. Those that do retire legacy structures and infrastructure in choose of virtual structures will discover that they may be now no longer most effective capable of accommodate the expectancies of Millennials and Gen Z — they may additionally have positioned themselves in a prevailing role to conform to the wishes of destiny generations.
AIOps and Advanced Analytics
A global survey of financial institutions found that 85% of respondents said their organization currently uses some form of AI. Also, according to a recent report, the banking predictive analytics market is projected to reach $5.43 billion by 2026, at a CAGR of 20.8% from 2019 to 2026. Taken together, these results demonstrate the widespread adoption of AI and advanced analytics in the financial industry. Service sector – a trend that continues to grow year after year.
It’s easy to see why.
From automated fraud monitoring and credit risk analysis to AI-enabled customer service and personalized recommendation engines, the uses for these technologies seem endless. Through adoption and innovation, banks and insurers have been able to improve the customer experience, streamline existing processes, anticipate and mitigate potential risks, and offer more valuable products and services.
Whether your business is just starting to experiment with AI and analytics or is an early adopter and wants to expand into new areas, a digital transformation strategy is essential. Only by developing such a strategy can you put the right people, processes, systems, and culture in place to support and maximize your investment.
The need for change is more evident than ever. The aftermath of the events of 2020 has made it painfully clear that digital transformation not only provides financial services institutions with a competitive advantage, but also has the power to accelerate the recovery from global turmoil. I was. Companies that developed their digital transformation strategies before the COVID-19 pandemic have proven to be more responsive to changing consumer needs.
If there is one clear lesson from the current state of the financial services sector, it is this. If we want to be there tomorrow, we must face digital transformation today.
Digital transformation strategy
There are six key points where a company needs to focus for their digital transformation strategy:
Information and insights
Collecting data is only the first step. How you do it really matters.
To get the most out of their customer, operational, and market data, financial institutions must first integrate it into their enterprise data warehouse. Data warehousing and master data management enable you to pull data from many disparate sources into one central repository, breaking down departmental and line-of-business silos.
Once securely stored in a data warehouse, organizations can apply business reporting and analytics, use machine learning concepts to build statistical models, and extract meaningful insights from diverse datasets. These insights create opportunities to optimize existing products and services, identify opportunities to increase market share, develop new pilot programs and, of course, improve the customer experience.
Integrating multiple data assets and extracting insights from that data are core components of building a modern data estate. H. An advanced infrastructure that enables financial services institutions to ingest, manage, and strategically use data in real time.
One of the key drivers of digital transformation is the ability to better meet and serve the needs of modern consumers. This is given rapidly changing customer expectations and the pressure financial institutions face to deliver better products and services faster while maintaining a consistent customer experience across multiple channels. And it’s easier said than done. Speaking of channels, today’s customers are more active than ever. According to a McKinsey report, 71% of consumers in the financial services sector prefer multi-channel interactions. Additionally, the use of online and mobile banking channels increased by 20% to 50% in the first months of COVID-19 and is expected to continue a strong trend for the foreseeable future.
When it comes to customer retention and satisfaction, the key to success in the increasingly competitive financial services market is to provide personalized solutions and experiences that make every customer feel like their own. It all starts with her 360-degree view of her customers, based on aggregated data from multiple digital touchpoints. This comprehensive view not only helps you better understand who each customer is, what they want, and what is important to them but also where they spend their time and how a company can also know if want, they want to get involved with the business.
Customer relationship management (CRM) systems are valuable tools for creating a 360-degree view, as they create a centralized database of consumer data and can further segment that data into individual customer profiles. With insight, information, and context, financial institutions can develop targeted marketing campaigns that speak directly to consumers and direct them to the right channels, the ones most likely to see and interact with It can be deployed through channels.
Companies can also use CRM data to optimize existing processes and products, develop new products that better meet the needs of their target markets, and design applications that fill gaps in user experience. Ultimately, the intelligent and strategic use of customer data will enable financial institutions to create unique, customer-centric digital experiences that set them apart from their competitors.
Unified Operations Platform
With the availability of digital tools and capabilities such as CRM systems, ERP systems, and customer service solutions, financial services organizations can improve collaboration, accelerate decision-making, design and manufacture new products, and streamline operations across their operations. Integrating operations across connected ecosystems is a fundamental step in the journey of digital transformation, empowering financial services firms with access to real-time data, customer insights and continuous feedback to enable predictive, data-driven results and optimized operations. The ability to access and act on real-time data enables financial institutions to make intelligent, data-driven decisions, making them as agile as financial institutions in the FinTech industry.
For banks, insurers and capital markets, integrated operations offer new opportunities to not only optimize, but modernize. This is a true transformation that improves our ability to acquire new clients, streamline onboarding and manage risk across our portfolio. Ultimately, integrated operations enable financial institutions to gain greater visibility across the organization, act faster, and accelerate business through new opportunities.
Remote employment is increasing in the financial services sector. While the initial shift to remote work has been accelerated by the pandemic, 74% of CFOs and finance leaders have permanently replaced at least 5% of their employees who previously worked onsite due to the impact of COVID-19. In order to make this transition as smooth as possible and ensure continued organizational productivity, companies must make every effort to facilitate collaboration and communication among their members of the team around the world.
This massive shift to remote work also raises legitimate security concerns. According to a Ponemon Institute study, 70% of financial services firms fell victim to cybersecurity attacks in 2020. A follow-up survey found that more than half (57%) of respondents attributed cyberattacks to remote work due to the lack of physical security on remote workers’ devices.
The good news is that modern workplace solutions can provide the collaboration and communication organizations need to support fully remote or hybrid work models while holistically addressing privacy and security requirements. For example, the video conferencing, group chat, and content-sharing capabilities of Microsoft Teams or G-suite can make it easy for remote workers to collaborate on projects in real-time. Financial institutions can also use Power Apps to build their own custom communication and collaboration applications. On the security front, Azure Virtual Desktop allows remote workers to securely access their desktops and applications from virtually anywhere in the world. Meanwhile, Azure Active Directory protects sensitive corporate data with single sign-on and multi-factor authentication-based access control.
True digital transformation is not possible without a truly innovative platform to support it. This means moving applications and data environments from outdated legacy systems and on-premises infrastructure to a centralized modern platform to take advantage of the cloud and cloud-scale analytics.
Moving to the cloud offers financial institutions the opportunity to comply with industry standards and best practices, improve customer agility, improve performance and integration, and improve compliance, control, and security. Without the costs and inefficiencies of on-premises infrastructure (including operating and maintenance costs), organizations can explore new opportunities to empower employees, delight customers, and create new business value. Companies that choose to invest in managed services enjoy additional benefits, such as the IT expertise of a team of highly skilled professionals and the ability to scale or scale up as needed, thus meeting mission-critical goals. You can focus on your work and avoid costly downtime.
Enhanced Resource Capabilities
In the financial services sector, as in all industries, digital transformation is not just technical, it is cultural in nature. New systems and solutions can have all the advanced capabilities in the world, but without management approval and user approval, the needle of innovation cannot move forward.
To advance their digital transformation journey, financial institutions foster talent and ingenuity, foster collaboration across teams, and encourage employees at all levels of the organization to make decisions and contribute ideas. You have to create a culture. Such a culture empowers employees to feel confident and empowered to provide the best possible service to their customers, and ultimately helps companies realize the benefits of their technology investments.
Discover Digital transformation with DxSherpa Technologies
With a ServiceNow Assure partner, All the right pieces coming together in perfect harmony
People: ServiceNow architects, technical experts, and business process consultants collaborate with your technical team and CIO to speed up time to value and market.
Practice: Proven methodology tailored to meet your desired outcome
Process: Comprehensive reviews to ensure optimal health of your project
Seamless Orchestration: Whether it’s IT modernization, implementing new productivity tools, or rethinking customer support, successful projects start with the right collaboration.
Sherpa’s can make your transition with confidence.
About DxSherpa Technologies:
DxSherpa Technologies is a high-growth, global IT services company with headquarters in the US and India. As a 100% ServiceNow-exclusive Premier partner, we serve medium to large enterprises across Asia, Europe, and North America. Our expertise spans many industries with special emphasis in Manufacturing, Banking, Insurance, IT, and Healthcare. We have built and developed a dedicated and focused team of 300+ consultants to serve our expanding client base across multiple disciplines on the ServiceNow platform.
We are part of the ACCSCIENT Group of companies. ACCSCIENT is a partnership between FutureTech Holding Company and Alaris Equity Partners. They strive to deliver a multi-faceted portfolio of expertise in Enterprise Platforms, Data Digital Ecosystems, and Talent to enable digital transformation while navigating the need for Global Optimization, Security, and Financial Agility.
2023 ServiceNow, Inc. All rights reserved. ServiceNow, the ServiceNow logo, Now, Now Platform, and other ServiceNow marks are trademarks and/or registered trademarks of ServiceNow, Inc. in the United States and/or other countries. Other company names, product names, and logos may be trademarks of the respective companies with which they are associated.
2023 DxSherpa technologies Pvt. Ltd. And DxSherpa technologies Inc. All rights reserved. DxSherpa, the DxSherpa logo trademarks and/or registered trademarks of DxSherpa Technologies. in the United States and/or other countries.
Author : Animish Raje