TECHNOLOGY

Why the Financial Services industry is struggling with digital transformation

Bizagi Finance Digest Financial Services

By Gustavo Gomez, CEO, Bizagi 

The state of digital transformation in the Financial Services industry

Despite expressing a willingness to go digital and understanding the benefits of doing so, nine in ten (91%) Financial Services (FS) organisations are facing significant challenges in making it happen, according to Bizagi’s latest global research ‘The Agility Trap Report.’

The pressure to keep up with the sheer pace of digital change doesn’t help. Even those FS businesses that haven’t yet started on the road to digital transformation are preparing to put their foot on the accelerator. Enterprises in this industry that fail to act, or act fast enough, will be displaced by more innovative competitors.

Bizagi found that while only one in three FS companies worldwide (33%) currently have a high level of live transformation projects on the go, more than half (53%) claim they are working on a ‘moderate’ level of live transformation projects. In addition, 45% of Financial Services respondents have significant plans to develop digital projects in the future.

What exactly is holding FS industry businesses back?

The Bizagi Agility Trap Report shows that companies all over the world are working hard to keep up with their industry peers, but the majority find major obstacles along the way. The challenges are widespread, with 88% of Financial Service enterprises experiencing at least one of the five most common issues during the transformation process:

  1. Taken a long time to implement (49%)
  2. System too complex to manage or change (48%)
  3. Fails to meet overall user expectations (30%)
  4. Lacks intelligence on user content (30%)
  5. Fails to engage users (21%)

In addition to these challenges, almost three quarters of FS businesses (71%) agreed that digital transformation needs to happen fast in order to avoid commercial failure. So these barriers listed here represent huge risks to the future of the business. This is crucial because the technological environment affected by transformation impacts on so many areas of the business, defining an organisation’s ability to profitably compete.

A digital mind-set for Financial Services

Despite these common pains of transformation, its necessity is doubted by no-one. The world of financial and asset management really is changing as businesses, industries and customers reinvent the way they work.

With multiple moving parts and highly complex, regulated processes,FS enterprises require the agility to progress and follow-up disputes within set timeframes, and in line with tight procedures. For digital transformation to have impact in the FS sector, the customer must be at the centre of their thinking.

An exemplary business process management system project for one of the UK’s largest credit rating agencies focused on an entire end-to-end workflow supported throughout the business.The result – within a 16-week turnaround – was a smooth progression for excellent customer experience; from the moment the dispute is raised through to the subsequent investigation, resolution and response.

In order for a digitally transformative project to positively impact business agility, not impinge too greatly on the day-to-day, and improve customer experience two things need to marry up. The project driver digital mind-set must be paired with a company-wide cultural mind-set of innovation. The combination will enable FS businesses to build out digital processes that are stronger than the resistance to change and the most common barriers to success.

Download the full global executive study‘The Agility Trap’ report here for more insights into the pace of digital transformation in your part of the world.

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