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Why financial services companies should consider RFPs in their digital transformation strategies

Why financial services companies should consider RFPs in their digital transformation strategies 45

Why financial services companies should consider RFPs in their digital transformation strategies 46

 

By Tobias Dawes, CEO and Founder of Avnio

There’s no doubt that the financial services sector will be instrumental to the post-pandemic recovery ahead, whether it’s advisors navigating customers through the changing business landscape, or M&A firms managing the soar in post-lockdown deals[1]. And, with this surge in demand for financial services expertise, comes a tidal wave of new business opportunities for firms across the sector.

Consequently, finance companies are naturally going to be spending more time and resources on answering RFPs, creating a much bigger time strain on talented, experienced employees, where previously, winning new business may have been subsidiary to their main role. Organisations are now going to have to get serious about the demands, processes, workflows and technology around answering RFPs, and reflect on how this fits in to their long-term digital transformation strategies.

RFPs are a huge time strain

An hour’s worth of employees’ time can be costly and for businesses using an external partner for some specialist knowledge services, an hour’s time could be extortionate. It’s worth considering these costs when it comes to answering RFPs, as well as the costs related to the work that the team isn’t able to do while they’re having to work on the responses to DDQs and the pitch itself.

For many, it’s the repetition in the RFP and DDQ questions that really costs time and money. Leaders know that senior colleagues and SMEs are an expensive resource but continue to assign the same questions to them. If companies are going to handle even more RFPs going forwards, they need to rethink this unnecessary waste of valuable resources.

To do this, it’s important for leaders to reduce the time taken on responses, particularly for frequently asked questions. This may involve automating the responses as much as possible to free up colleagues and SMEs.

Most companies are inconsistent in their RFP responses

As firms commit to more and more new business processes, it’s worth considering how inconsistencies can emerge on the responses due to staff changes. For example, when fully qualified employees who have been working at the company for longer are out of the office, not all firms will have approved responses for less qualified, less experienced employees to make use of. It’s no wonder that there are irregularities in how each RFP is answered.

Those who are lucky enough to avoid being contractually bound to their RFP responses if they win the deal might consider the risk acceptable. However, the more RFPs a company answers, the more risk they are taking on.

For this reason, it is necessary to have a consistent RFP knowledge base. This is where using AI can be game-changing in bidding processes. What’s more, AI has evolved to the point by which it can now teach a computer what the best answer is to an RFP question, even if the question doesn’t use exactly the same phraseology. Organisations who are answering increasing numbers of RFPs should consider automating the responses so that they are always consistent and compliant, but also optimising their answers.

Many firms have to finish answering an RFP to discover that it wasn’t a good fit

Even for firms opting for a ‘we are not in the business of turning down business’ approach, it’s still likely that they will put more effort into working on the pitches that have more chance of success.

The more RFPs a company answers, the more useful it is to have a tool that helps them qualify the RFP as quickly as possible with minimal effort. Considering the time it can take for teams to answer RFPs, as well as the opportunity cost, businesses need to know as soon as possible which RFPs deserve more effort.

Companies who want to keep up with their competitors can no longer afford to answer their RFPs and questionnaires manually, or rely on using technology built in the early 2000s. Businesses that don’t utilise AI technology to scale their expert response to the tsunami of RFPs, risk overwhelming themselves.

Considering RFPs in digital transformation strategies

The COVID-19 pandemic has taken its toll on companies around the world, particularly when it comes to retaining business. For many, doubling efforts on answering RFPs will be key to putting businesses back on track.

What’s more, the end of lockdown restrictions hasn’t eradicated the need for continued digital transformation programmes. In fact, Gartner predicts IT spending to increase as companies focus on new digital business initiatives post-pandemic[2].

With this in mind, now is the time for financial services firms to evaluate how technology can support them in reducing unnecessary time spent on RFPs and how the process could be made more efficient and accurate with automation. By streamlining processes and embracing new technologies, financial services companies could find themselves in a much more favourable position when it comes to winning new business, which will, ultimately, help them drive growth short and long term.

[1] https://www2.deloitte.com/us/en/insights/topics/strategy/m-a-markets-post-pandemic-business.html

[2] https://www.gartner.com/en/newsroom/press-releases/2021-04-07-gartner-forecasts-worldwide-it-spending-to-reach-4-trillion-in-2021

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