Maintaining a Competitive Edge with Digital Transformation in the Finance Industry

As the capabilities of technology evolve and grow, customers are engaging more often with modern, digitized services and expect this experience from other areas. The shift toward a higher level of service includes the finance industry, and organizations that want to maintain a competitive edge must prioritize and accelerate their digital transformation efforts. It is no longer enough to adapt to changes in customer needs once they occur, but organizations should now anticipate and provide solutions in advance. Additionally, financial services organizations are in a highly competitive and regulated environment, making it important to be innovative while also adhering to compliance standards.

Digital transformation in financial services offers agility, and the integration of different processes brings value to customers as well as reducing costs and streamlining operations for the organization. Competition in finance has become increasingly cutthroat, and the financial services landscape has transformed completely with the rise in technological innovation. 97% of financial services firms are making digital transformation efforts, whether they are in the beginning stages or have already worked through implementation, and these organizations are all finding value in the benefits provided by a digital finance transformation.

Create Quality Insights Out of Big Data

Data quality and collection has consistently been an issue in the world of finance, but it is key to making accurate business decisions. A study by Gartner found that data quality effects overall labor productivity by as much as 20%. Improving data seems like a daunting, complex task, especially with old legacy systems, but it is more than worth the effort for organizations that want to reduce costs and improve performance. Just having large amounts of data is not beneficial to organizations unless it is being organized, analyzed, and reported clearly and efficiently. Modern, cloud-based data analytics tools present information in a way that allows for fast and informed decision-making.

Leveraging data to plan and forecast helps organizations be agile. The finance industry is often uncertain, and active planning and forecasting by assessing various scenarios is beneficial. Tools such as Workday Adaptive Planning offer real-time dashboards complete with data visualization that can help reveal issues, trends, or areas for improvement. By transforming otherwise unstructured data into an organized, easy-to-understand format, key actionable insights are revealed for informed decisions to be made.

Improve Operational Efficiency through Digital Transformation in the Finance Industry

Financial industry leaders need to optimize operations efficiency across the organization, and many have started by updating legacy IT systems, which are often a huge roadblock in streamlining operations. Using systems that were made over 30 years ago makes it difficult, and in some cases impossible, to integrate new systems or products. Replacing these systems helps to deploy new products or services more quickly and on a larger scale. Findings from The Hackett Group state that finance organizations can reduce costs by more than 40% by fully embracing digital transformation, accelerating their progress toward previously unattainable efficiency levels.

Digital transformation in the finance industry also reduces costs by speeding up processes that previously may have been performed manually. Mundane and repetitive tasks can be automated, which helps staff save time and work on more meaningful projects. Improving back-office efficiency and rethinking operations through digital transformation cuts down on the price that financial organizations are paying for these operational tasks.

Minimize and Improve Risk Assessment

Security and compliance are critical issues for financial organizations, and changing regulations and market conditions for financial industries require a system that is equipped to plan and adapt. Poor data quality and management can cause organizations not to meet data compliance and regulatory standards, and penalties are increasing in severity in more recent years. Having a cloud-based system to provide protection for data can be helpful in staying compliant.

Digital transformation in financial services helps improve data security and safety when it is consolidated and organized into a single, standardized system. With real-time transparency into financial data, organizations will have improved compliance and are also able to build regulatory reports on multiple dimensions, reducing reliance on other systems. Moving to the cloud reduces organizational risks because instead of sensitive information being spread across disconnected, unprotected systems, it can be consolidated into one centralized platform.

Across the industry, financial organizations are leveraging the advantages that digitization provides and are finding new ways to innovate. The organizations that are further along in the process have found that digital finance transformation benefits both employees and customers by improving the employee experience and providing customers with a higher level of service. By better utilizing data, streamlining operations, and staying compliant, organizations achieve a greater return on investment and stay ahead of the competition.

To learn more about how organizations can benefit from digital transformation in the Finance industry, check out Collaborative Solutions’ Financial Services and Insurance page.

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