Financial services were introduced to drive progress and make processes simpler for traders and consumers. Let’s rewind right to the beginning – in ancient times, the first gold and silver coins were introduced so that people didn’t have to rely on bartering goods anymore. Since then, the financial services industry has undergone a whirlpool of changes and has revolutionized the world. Fast forward to today, and the biggest change that this industry is currently facing is digitization. We’re moving towards an era of contactless payments, solutions for decentralized exchanges, and automated investments. Amidst this, there are new changes ranging from the advent of fintech startups to cryptocurrencies, and the sector is under immense pressure to reimagine its business and operations beyond just innovative financial products and self-service platforms.
The Covid-19 effect
The level of digitization that the financial services industry was trying to achieve was suddenly accelerated by the pandemic, the key pillars of which are people, processes, and technologies. The discussions around this are usually limited to technologies – on mobile apps and always-on cloud services for modern self-service banking, on investment and trading platforms that are popular with digital natives, and on blockchain technology, which provides the transaction tracking mechanism that is at the heart of every cryptocurrency. However, the pandemic has shown us that people and processes are just as important. And, this holds true across industries.
Over the last year, the acceleration in digitization strategies was the result of a) changes in the work environment and b) changes in the way customers availed services. Due to the lockdowns and social distancing norms that were enforced, consumers across the world transitioned towards digital platforms – whether it was ecommerce, payments, loans, etc. Hence, financial institutions had to deal with this influx of online banking, while also ensuring that employees worked from the safety of their homes. It’s important to note that the financial sector has historically been very traditional in nature and was not accustomed to concepts like remote working. Hence, the sudden change in the way work was done required leaders and employees to familiarize themselves with the latest technologies to ensure business continuity.
Overall, the pandemic brought to light the challenges that this industry would face in the future – the need for agility to scale massively and instantaneously and the ability to quickly react to changes in customer demand while enabling their staff to work flexibly from anywhere to achieve resiliency and maintain productivity.
In the financial services industry, agility, whether it’s the flexibility of scale or geography, needs to be achieved while adhering to very specific security guidelines. It’s safe to say that when it comes to this industry, with the extremely sensitive information that is dealt with regularly, the stakes are very high. Hence, even with the adoption of cloud technologies to help scale or digital workplaces to enable remote working, security and compliance regulations continue to apply.
This is where cloud and Artificial Intelligence (AI) come into play. Up until now, the adoption of cloud was slow-paced. However, business leaders have now realized that, if implemented correctly with a robust security framework, the adoption and acceleration of cloud technologies can help them scale, become more agile, and have a competitive advantage. Businesses are also looking towards AI and analytics to help detect fraudulent transactions and phishing attacks, identify trends in customer behavior, analyze changes in risk landscapes, etc. As we progress, the data volumes and transaction speeds required will be too high to be processed manually. AI-based monitoring will help securely detect any unusual behaviour no matter the scale – whether it’s from cloud-based online transactions or from employees accessing data from their own homes. Ultimately, the future of the financial industry is based on data and algorithms.
Employees will always remain at the core of the business
These technologies aren’t being deployed to replace human intervention, but rather to give it some much-needed impetus. It won’t be possible to automate every aspect of the industry and employees will continue to play a crucial role in the future as well. While consumers are moving towards automated online services, there are times when they require consultation from a human counterpart – whether it’s for loans, investments or any other financial advice.
To ensure a healthy balance, companies need to understand how their digitization strategy can empower their employees. During unprecedented situations like these, it is crucial for businesses to help their employees be productive wherever they are and with any endpoint device, enabling them to flexibly meet customer evolving needs and expectations. The future of career paths in finance is expected to be more diverse given the extended responsibilities and business models that the sector will take up. Therefore, this will require the sector to rethink its talent planning strategies.
So, what’s next?
The last year has been a learning curve for leaders across businesses. Hopefully, the financial services industry can now shift gears and progress from ‘resilience mode’ back to ‘innovation mode’. As they continue to reinvent themselves, it will be important for financial institutions to a) highlight the product or technology side of their digital transformation, b) include distributed processes, c) focus on the productivity and well-being of employees, and d)form a strong foundation for optimal customer experience.
It is an accepted truth that customer experience was, is, and always will be one of the most important factors that drive success for businesses in the financial services industry. And, as we move towards hybrid working models, there needs to be special attention channeled towards aligning the technological and human aspects so as to provide a seamless experience for every consumer.
By Ravindra Kelkar, AVP, Indian Subcontinent, Citrix