Sustainable Digitalization in Financial Sector

It is certainly not due to a lack of willingness to invest that a large part of the financial sector is perceived as a bit backward digital. Targeted strategic investments can leap forward. Financial service providers are known to invest more than other companies in digitalization. However, the fragmentation of systems and data is still significant. Most banks today use hundreds, if not thousands, of applications, and new ones are added each month. Nevertheless, there is often a backlog in terms of investments made, because digitalization is often not being driven strategically enough. Many banks are bogged down in selective initiatives to respond to market or regulatory requirements. Nearly half of all digital transformation initiatives in banks are initiated at the functional level, are tactical and have little connection to corporate strategy. Such decoupled investments only exacerbate the silo problem.

A large amount of applications leads to uneven IT landscapes and isolated work. Most teams do not have the appropriate means to share and benefit from business-relevant data, customer information, or knowledge. This still prevents banks from efficiently organizing work across the value chain, better serving their customers and handling operational risks.

 

Where sustainable digitalization should start

 
Every financial service provider that wants to transform itself digitally must first have full control over its IT environment. A launch can be the introduction of a higher-level technology platform that enables processes to be organized and automated across a multitude of applications. It not only allows uniform management of data and critical processes but also systematic control of operational and compliance risks.

Many financial service providers have invested in enterprise applications in recent years. These systems are designed to improve individual business functions. Although they represent the function well and store all relevant information – it mainly serves as a system of record – they are not well connected.

By integrating front, middle, and back offices into end-to-end workflows, banks can reduce costs, transform faster in increased competition, and deliver exceptional products, services, and experiences to their customers. This is without banks having to discard their previous investments in individual enterprise systems. On the contrary, they combine the best of both worlds.

 

Getting to grips with compliance risks

 

Risk and compliance teams also often work with outdated systems and processes, which is reflected in manual tasks, spreadsheets, and paper records. Isolated data and systems as well as inconsistent methods are particularly serious here: As long as the functional units operate separately from each other, it is difficult to collect data and monitor risk factors – overarching risk management is hardly possible.

Orchestrating systems and processes with the appropriate software allows risk management throughout the enterprise. Control points become an integral part of a digital workflow, automatic notifications point to compliance risks, and regulatory changes are easier to implement. Our platform approach thus contributes significantly to the optimization and automation of risk management activities.

 

Consistency creates transparency

 

Consistent processes provide full transparency for all stakeholders. Employees at all levels of the organization benefit from a single, reliable, real-time view of critical business processes in IT, human resources, and customer service. Experience has shown that this not only increases productivity but also the intrinsic motivation of all employees.

There are IT companies that have worked closely with leading banks to identify bank-specific processes that are particularly complex and typically handled in distributed systems. These include the central processes relating to bank cards, payment transactions and loans. This collaboration is the result of several out-of-the-box (OOTB) workflows that can be implemented quickly. This includes workflows for new card requests, locking and unlocking cards, or approving loans. Our roadmap provides for other industry-specific applications, not least due to our customers’ desire to make the most of the potential of these IT services.

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