Industry Perspectives

The financial services industry has ample opportunity to innovate and transform how it operates through technology that adapts to its specific requirements. The advent of cloud computing is just a small step toward digital advancement that delivers necessary automation and business intelligence. The introduction of newer leadership roles like chief digital or chief innovation officers have helped increase prioritization of technology investments that truly enrich – and not just optimize – existing processes. At Ventana Research, we see three key trends taking shape that can transform the financial services industry.

At the top of our list are enhancements to customer experiences, making it important for financial services organizations to explore digital experience platforms. These applications enable customer engagement across marketing, contact centers and mobile banking – the center of digital banking. The DXP integrates information from an individuals’ profile, behavior and history to understand the interactions that should be provided, no matter the digital channel. With the decline of customers using physical branches, the DXP can be the conduit to knowing the customer, but also guide and predict what they may want next in their financial services relationship. If properly selected and implemented, a DXP can reduce the time for a conversational chatbot to engage in a personalized manner, and, with authentication, guide the customer to their desired interest. Ensuring that the selected DXP technology is designed to meet organizational requirements is essential to improving customer experiences.

Secondly, the use of analytics supports the broader range of workforce needs in any role and responsibility, from managers of teams to those examining methods to streamline processes. Advancing the organization to be more sophisticated in analytics requires an examination of where these systems can substantively support business resilience linked to operational goals and corporate objectives. These applications can help financial institutions go beyond historical approaches to analytics – such as dashboards and reports designed for analysts – to providing personalized insights with key indicators and metrics that do not just guide actions and decisions but enable collaboration that leads to improvements. Advancements in continuous machine learning algorithms enable organizations to monitor and act upon deviations from normal operations, such as approaching risk thresholds. But analytics need to operate against data platforms that store unique sets or vast volumes of data.

Robotic automation is the third technology trend we see transforming the financial services industry. It supports the digital workflow and business processes that interconnect across departments and systems. While automation has been a marquee function desired by financial services organizations, that level of efficiency is now a priority as applications and tools span legacy systems and cloud computing rises as a foundational requirement. Connecting systems at the activity and task level might sound simple, but it is less so when these requirements support real-time operations to agents in the contact center who must respond and act immediately. Concurrently, the need to add intelligence and real-time analytics to events as they happen requires the interconnection of data across a myriad of systems. The advancement of robotic process automation and workflow platforms has enabled configuration of systems using low or no-code approaches, saving financial institutions significant time and resources.

Every competitive advantage is needed, making it critical for financial institutions to assess technological competencies to adapt to the distributed cloud and systems that bring a higher level order of efficiency to business processes. Prioritizing optimization over innovation investments will ensure advancement of digital experiences and processes to deliver desired outcomes. Thought 2024, one-half of financial services organizations will have established the Chief Digital Officer as responsible for the processes and technologies that enable digital effectiveness and optimal productivity of the workforce. Ventana Research believes the verticalization of software now operating in the cloud should be examined, in addition to business-focused offerings of technology providers that help advance necessary automation and intelligence. Crucial to this effort are focused digital and innovation teams that continuously evaluate technology to maintain market effectiveness and prioritize where it can increase business competitiveness.

The financial services industry has significant opportunity to advance its digital effectiveness, gaining a competitive edge through technology. Organizations should assess the level of digital transformation required to utilize readily available advanced technological approaches to deliver experiences customers expect for their financial interactions. Our analysis finds that digital business and technology investments must be aligned to support fundamental customer and financial performance and processes. The disintermediation and expansion of the financial services industry continues to be a challenge; thriving organizations will adapt by determining how technological competence paves the way to maximum business potential.