- Can you provide more detail on how organizations are driving transformation in the banking and financial services (BFS) industry? What are the digital transformation priorities for these organizations?
Organizations in the banking and financial services (BFS) industry are actively driving transformation through a variety of innovative strategies to adapt to the rapidly evolving market landscape.
BFS firms that are advanced in their digital transformation journey’s have prioritized leveraging AI to connect technology stacks for business change, implementing conversational AI within intelligent agents to reduce the interaction burden on consumers, and enhancing customer experience (CX). Centered around the implementation of AI-powered platforms that unify and orchestrate business and technology, these initiatives drive their transformation agendas and improve CX by capitalizing on emerging technologies. According to the Forrester study, 55% of advanced BFS firms have carried out active digital transformation projects in the past year, highlighting their focus on leveraging AI and other emerging technologies.
These AI-powered platforms allow enterprises to connect disparate technology stacks, enabling real-time data analysis, and supporting automated decision-making processes. The adoption of these platforms supports rapid deployment of new applications and services and fosters innovation by leveraging cloud-native technologies. Additionally, BFS organizations are developing and deploying customer-centric solutions, such as mobile banking apps, personalized financial advice, and digital onboarding processes, to enhance customer engagement and satisfaction.
Ecosystem partnerships are also key in driving transformation. BFS firms collaborate with fintech startups, technology vendors, and other partners to co-develop innovative solutions and expand their service offerings. These collaborations help BFS firms stay competitive and address the evolving needs of their customers.
Moving forward, the digital transformation priorities for BFS firms highlight a strong emphasis on improving IT operating model performance to ensure agile and responsive IT services. Firms are focused on managing technology landscape changes to maintain core system reliability while integrating new technologies. In doing so, they must enhance intelligence and automation in business processes to streamline operations, reduce costs, and improve accuracy, while also strengthening IT reliability and resilience to unlock the value of data through advanced analytics, and drive process efficiencies to improve overall operational effectiveness.
- What are the primary challenges hindering the success of their digital transformation initiatives?
Digital transformations are not only difficult, but also expensive. According to results from the Forrester study, despite significant investments, nearly half (49%) of BFS firms failed to achieve desired business outcomes from their digital transformation efforts.
Customer experience and employee satisfaction are paramount for enterprises across all industries, and while digital transformations are a key driver for success, it’s essential to understand that failed digital transformations have destructive repercussions. Finding success requires overcoming common obstacles preventing success, including:
- Organizational Silos: Organizational silos are a major obstacle, as different departments and business units often operate independently, leading to fragmented data and disjointed processes. This lack of integration impedes the ability to execute cohesive digital strategies. Connectivity within the enterprise and across partner ecosystems is essential, and 73% of decision-makers surveyed believe that effective digital transformation requires overcoming these silos.
- Change Resistance: Employees and managers may resist changes that emerge from digital transformations due to fears about job security, unfamiliarity with new technologies, and concerns about the impact of these changes on their work routines. Overcoming this resistance requires effective change management strategies and clear communication about the benefits of digital transformation.
- Data Issues/Knowledge Gaps: Poor data quality, data silos, and the absence of standardized data formats make it difficult to gain comprehensive insights and leverage data for informed decision-making. Many enterprises also face shortages in finding skilled professionals with expertise in emerging technologies such as AI, machine learning, and cloud computing, leading to knowledge gaps that can slow down transformation efforts. These gaps lead to suboptimal use of AI and digital tools, affecting the overall transformation outcomes.
- Lack of Funding and Executive Sponsorship: BFS firms often struggle to secure the necessary financial and strategic backing to drive comprehensive digital initiatives. The study indicated that half of the respondents faced a lack of funding to support their digital transformation efforts, a huge barrier for driving meaningful progress.
- The paper highlights the importance of customer experience (CX) in the BFS industry. Why is this a priority for business leaders and what is the role of AI and automation in improving customer needs?
While business leaders across the BFS industry may have varying priorities for driving enterprise success, almost all of them agree on the value of customer experience (CX). Improving CX is widely recognized as a strategic priority, including 92% of respondents surveyed by Forrester, due to the significant impact a positive CX has on customer loyalty and revenue growth, which are crucial for driving business value.
By prioritizing CX, BFS firms aim to create seamless, personalized, and responsive customer journeys that not only meet but exceed customer expectations. This approach not only drives customer satisfaction and retention but also contributes to long-term business success and growth. For example, Forrester’s study indicates that even a one-point improvement in their CX Index score can result in $115 million in additional revenue for banks.
In an industry characterized by intense competition and high customer expectations, offering exceptional CX serves as a crucial differentiator. As a result, there is a unified focus on leveraging digital technologies to enhance CX, most notably AI and automation, enabling the delivery of personalized services, streamlined customer interactions, and efficient, round-the-clock support.
The impact of AI-driven insights on personalized service delivery is monumental, helping BFS firms understand customer needs better and offer personalized recommendations and targeted marketing campaigns. Predictive analytics take personalization to the next level by enabling BFS firms to anticipate customer needs before they arise. By analyzing historical data and identifying trends, predictive models can forecast future behaviors and preferences. This allows firms to detect potential issues early, such as predicting when a customer might need a loan or identifying signs of dissatisfaction that could lead to churn.
Streamlined customer interactions are made possible with AI-powered chatbots and virtual assistants that provide 24/7 customer support, handling routine inquiries and resolving issues quickly. This not only enhances customer satisfaction but also augments human capabilities by freeing them up to focus on more complex tasks.
Additionally, the automation of internal processes such as loan processing, compliance checks, and fraud detection is especially impactful in improving operational efficiency. Automation reduces manual intervention, accelerates service delivery, and minimizes errors, leading to faster and more reliable customer services.
- Can you elaborate on how a platform-based strategy can accelerate connectivity, digitalization, and AI roadmap for BFS firms?
Adopting a platform-based strategy is essential for BFS firms aiming to accelerate connectivity, digitalization, and AI implementation. According to the study from Forrester, 58% of advanced firms believe that adopting a platform based strategy that unifies and orchestrates business and technology will drive their transformation agenda.
This approach entails the development and utilization of comprehensive platforms that integrate various technologies, services, and functionalities, fostering synergy and efficiency across the organization.
One of the primary advantages of a platform-based approach is its ability to catalyze ecosystem development and collaboration. In the BFS industry, a platform serves as a marketplace, bringing together diverse stakeholders, including fintech startups, technology providers, and even competitors, to co-create and deliver value-added offerings to customers.
Platforms also provide the scalable and flexible infrastructure needed to support rapid development and deployment of digital services. This allows BFS firms to quickly adapt to technological advancements and market changes, a critical function for success in the industry, but something that many firms have struggled with. By providing the necessary computational power and integration frameworks, platforms also support the deployment of AI solutions, enabling firms to leverage AI for strategic decision-making and customer engagement. As a result, BFS firms can enhance operational efficiency, drive innovation, and deliver superior customer experiences.
Platforms serve as a catalyst for innovation, fostering a culture of experimentation and creativity within BFS organizations. By providing a common infrastructure and set of tools, platforms empower developers and data scientists to explore novel ideas, prototype new solutions, and iterate rapidly, improving the time-to-market for new products and services, enabling organizations to stay ahead of the competition and meet emerging customer needs effectively.
Additionally, platforms play a pivotal role in enhancing data sharing and interoperability, breaking down silos and enabling seamless integration across disparate systems and applications, ultimately improving overall connectivity within an organization. In the BFS industry, platforms support better data sharing and collaboration, facilitating the exchange of information between internal systems, external partners, and regulatory authorities. This enhanced integration supports better data sharing and collaboration, which are critical for digital transformation.
Enables enterprises to minimize distance and maximize the value to end customers by taking an ecosystem approach, enabling partners to innovate jointly with them. They take a more human-centric approach to how they connect with their customers, employees and partners. We enable this by shattering systemically sluggish silos by making the journeys horizontally connected both within and across the ecosystem.
- Can you tell us more about the solutions EdgeVerve offers to assist BFS enterprises in their digital transformation journey’s?
EdgeVerve offers a range of solutions designed to support BFS enterprises in their digital transformation journey. These solutions provide a comprehensive framework for BFS firms to embrace digital transformation, leveraging AI and automation to drive growth, efficiency, and customer satisfaction. EdgeVerve offers a range of solutions designed to support BFS enterprises in their digital transformation journey:
- AI-First Platforms: The Edge Platform, EdgeVerve’s AI-first platform combines AI, automation, and insights to drive business transformation. It helps BFS firms optimize operations, enhance CX, and improve compliance through intelligent automation.
- Automation Solutions: EdgeVerve provides automation solutions that streamline workflows, reduce manual processing, and improve operational efficiency. These solutions enable BFS firms to achieve straight-through processing and accelerate loan processing, among other benefits.
- Data Integration and Analytics: EdgeVerve’s platform enhances data integration practices, ensuring high-quality, actionable insights. This capability supports better decision-making and the development of innovative products and services tailored to customer needs.
- Compliance and Risk Management: EdgeVerve’s tools for compliance automation help BFS firms manage regulatory requirements efficiently, reducing the burden of manual compliance checks and enhancing accuracy.
