How financial services companies can become change makers

Change is the only constant in the financial services sector. This has long been the case; however, the coronavirus crisis has put it on a level like nothing else we have ever seen before.  

The implications of the pandemic have been far reaching. Falling credit ratings reduced the world of investment grade bonds, face-to-face selling became impossible and, overnight, it became compulsory to support operations teams working from home, where that culture was virtually non-existent 12 months ago. On top of this, companies have the regulator knocking on their door demanding everything appear as normal on the outside to maintain the public's confidence in the financial system.  

Across the sector, there is an urgent imperative to advance digital capabilities. Retail banking distribution, for example, will experience up to three years of digital preference acceleration in 2020 as a result of the crisis, according to McKinsey. The rate of change has left many business leaders feeling like they have fallen out the driving seat. They are now responding to events as opposed to pre-empting or creating demand.  

Financial services companies need to do more than simply reclaim their spot in the driving seat. To thrive in tough economic conditions, they need to move from a country road (paper forms and manual processes) to the new superhighway (digital front ends and straight through processing). Here’s how -  

Get comfortable not having a destination 

 Lots of companies have five-year digital transformation plans, and a major overhaul makes sense if legacy systems are not serving their purpose. However, technology and the world around us is changing at a rapid pace, meaning these large investments sometimes never pay off.  

The level of change is increasing, so long-term plans need to be reviewed and adapted on a regular basis. True change makers are able to transform the front-end quickly and cost-effectively to meet evolving customer needs. They are masters in layering new applications on top of existing technology and linking legacy systems with modern platforms. 

Enlist a Chief Change Officer 

This may sound like a gimmick, but Chief Change Officers can play a pivotal role in helping the company to meet operational and strategic priorities. They can alter an organisation’s digital transformation mindset and make sure any change requests are met with agility, not anguish. They can also make sure change is considered and doesn’t just happen for change’s sake. Specialist consultancies can add value here by translating between business teams and IT to ensure successful change initiatives. 

Take control of your data 

Last year, Gartner claimed that fewer than 50% of documented corporate strategies mention data and analytics as fundamental components for delivering enterprise value. This needs to change quickly for financial services organisations to deliver digital transformation successfully. The world now runs on data. 

Data-driven organisations will have better insights into how their customers are behaving. A cleaner flow of data will also able enable them to respond proactively while ensuring compliance with regulatory requirements and financial disclosures. Finally, companies which have a strong data foundation will have a better understanding of which processes are efficient and effective – and therefore ripe for automation.  

The events of this year have reinforced the need for financial services companies to bring change to the forefront of their thinking. Companies which embrace this mindset will be in the strongest position to outperform the market in the months and years ahead.