By Sateesh Seetharamiah, CEO of Edge Platforms, EdgeVerve
For banking and financial services (BFS) institutions, 2024 carries forward the war for customer attention. Nimble fintech players and evolving customer expectations are pushing traditional BFS players to innovate at speed and scale. To succeed in a business landscape that is in a constant state of flux, BFS firms need a fundamental rethink of how they operate, innovate, and deliver customer value at scale. And successful digital transformation plays a key role in future-proofing business.
Driven by market changes, BFS firms are investing in digital transformation use cases that:
- Propel data-driven decisions to service customers better and faster,
- drive operational efficiencies and seamless operations by enabling straight-through-processing, especially for manual and time-consuming workflows, and
- improve adherence to an evolving regulatory landscape with real-time, actionable insights.
Yet, few BFS firms have seen their digital investments translate to tangible outcomes.
The digital dilemma: why banks strive, but still struggle, to transform
For most banks and financial institutions, digital transformation efforts have been lackluster. Despite pouring millions into digital journeys, nearly half of institutions admit to falling short of desired outcomes. While there may be some incremental gains in pockets, scaling value from digital has proven to be a significant challenge.
What is holding this digital value hostage? Issues range from organizational silos, inability to implement new processes and capabilities, foundational data issues, and piecemeal tech strategies that create a fragmented landscape. These transformation challenges often morph into an inefficient labyrinth, eroding CX, operational efficiency, and employee experience.
On the other hand, the firms that are able to harness digital are uncovering new value streams. For instance, 54% of respondents in the Forrester study accelerated loan processing, and 66% improved adherence to stringent risk and audit requirements by harnessing document discovery. Similarly, a leading US Bank witnessed a 60% reduction in contract review time and a 10x productivity boost aided by a Generative AI-based co-pilot.
What are the ‘digital leaders’ doing right?
These select few “digital leaders” have understood what it takes to harness digital value. And they are 2.3 times more likely to succeed in their digital transformation initiatives. They are also 8.5 times more likely to experience significant revenue growth.
These fantastic results are due to their deep focus on:
- Building connectivity and visibility across their business and IT ecosystems;
- experimenting with new technologies, and prioritizing AI and automation with a focus on augmenting human capabilities; and
- strategically leveraging platform-centric models to capture value through efficiencies, insights, and growth.
- Building a customer-centric connected enterprise
According to the Forrester report, connectivity across the enterprise (business and IT) and its partner ecosystems is a key priority for BFS leaders. Seventy-three percent of decision-makers agree that connectivity across data and network silos is essential for effective digital transformation. And nearly 40% of BFS players see partner optimization through connectivity as a game-changer for unprecedented visibility and collaboration.
- Unlocking the AI advantage
BFS firms are leading the way in AI adoption, with 35% of firms having invested at least US$10 million in AI in the past year. This investment in AI is setting the stage for a new paradigm of work where humans and AI can collaborate to create greater value. For instance, using AI and automation to drive self-service at scale can free employees to focus on more complex tasks and provide better customer service.
However, few BFS firms have data readiness to support AI. In the Forrester study, 33% of stakeholders said they lacked well-curated and quality data to train an AI system – a challenge that must be addressed.
Similarly, while BFS firms are eager to harness Generative AI (GenAI) and other emerging technologies, they lack a clear strategy. Without clearly defined use cases and a strategic map linking capabilities to outcomes, prioritizing the right emerging tech capabilities for business success would be challenging.
- Leveraging a platform strategy to capture value
The current shortfalls and gaps in digital transformation effectiveness havehighlighted the need for a platform-centric approach. This approach involves connecting business, IT, and partner ecosystems, as well as enabling technical connectivity across systems, data flows, and operational processes.
A platform-based approach can help BFS firms gain the visibility they need to make better decisions, automate tasks to improve efficiency, and generate insights to create new products and services.
Catalyzing digital transformation with platform-centric models
A platform-centric approach solves several challenges that hinder scaling digital transformation efforts. They break organizational siloes by connecting disparate legacy and modern systems to enable a free flow of data and information across the business. This integration enables BFS firms to improve operations and fully utilize AI and automation. And BFS firms have seen this value. Over half (58%) of advanced BFS leaders see platform-based strategies that unify business and technology as the key to unlocking successful transformation.
For BFS institutions ready to redefine customer and business value, the time for strategic platform adoption is now. However, BFS leaders will need a mindset shift to benefit from a platform-centric approach. They must stop looking at digital transformation as just investments in new technologies. Rather, it is about using the existing tech investments to their maximum potential with a clear vision, focus on end-to-end customer journeys, and a willingness to break free from traditional constraints.
About the Author:
Sateesh Seetharamiah is the CEO of Edge Platforms, EdgeVerve Systems Limited (An Infosys Company), and a board member and Whole-time Director at EdgeVerve. Sateesh is an industry veteran with three decades of rich experience in entrepreneurship, management consulting, IT leadership, and supply chain. Sateesh believes in AI and Automation’s immense potential in transforming future enterprises. With deep-rooted experience in the supply chain, he pioneered the Internet of Things (IoT) in its early days. Sateesh is one of the founding members of EdgeVerve and comes with rich experience in the product and platforms domain. Being a passionate technologist, Sateesh has been instrumental in establishing many foundational technology capabilities that drive today’s EdgeVerve strategy. In addition, he has been on the board of various start-up firms in the IoT and pervasive computing space.
