Digitalization or Digital transformation is nothing but the restyling of financial services. Not only has the number of regulations increased over the past decade, but so has the number of federal governing groups keeping watch and the costs of compliance (and non-compliance). By 2024, the blockchain market is expected to be worth more than $16 billion, according to Global Market Insights, with applications related to identity management anticipated to be the most lucrative, with a greater than 90 percent compound annual growth rate (CAGR) from 2018-2024. The Business & Financial Times online is the African Leading Platform In Providing Business and Financial News. The rise of FinTech companies and solutions over the past five years has led to a completely new and transformed financial services landscape. Less than a fourth (24 percent) of survey participants cite cyberattacks or privacy breaches as their top digital threat—lower than the average for all organizations (33 percent). Fortunately, more than three-fourths (77 percent) of financial services executives have already established a digital innovation steering committee (compared to 58 percent of all organizations), and 60 percent have hired board members or senior management with relevant oversight skills (vs. 49 percent of all organizations). Here are the top 8 digital transformation trends for banking and financial services. Please see www.scg.ug to learn more about our firm and our clients. Among these include the internet of things (IoT), artificial intelligence (AI), and blockchain, in addition to the advanced technologies they’re already deploying (i.e., cloud computing, advanced analytics, and automation). Digital transformation is key for financial services firms that need to stay competitive and useful for tech-savvy consumers. getty. Good governance—encompassing everything from planning and forecasting to implementation and execution—is critical to any company-wide initiative, but isn’t easy. At the same time, competition within the sector has ramped up quickly. Visit our Technology & Business Transformation Services practice page, or read our related insights: Digital Transformation in Financial Services, About the BDO Middle Market Digital Transformation Survey, Business Restructuring & Turnaround Services, International Financial Reporting Standards, Financial Institutions & Specialty Finance, BDO Center for Corporate Governance and Financial Reporting, Top Financial Services Digital Transformation Trends. Equifax, WannaCry, NotPetya, etc.). And in times of crisis, everyone wants a fistful of cash for comfort and security. Management Consulting | Technology Advisory | Outsourcing. The Financial Services industry is currently in the midst of profound transformation as it embraces the ‘next normal’ phase of digital transformation. 39% of executives expect to benefit from their digital transformation initiatives in 3 to 5 years. Nearly all (97 percent) of financial services firms are making some sort of inroads on … The digital transformation journey can be challenging. Digital transformation in banking will improve customer engagement . For those that are implementing (or plan to implement) a clearly defined strategy, more than half (55 percent) are taking (or plan to take) intentional steps against it. Advancements in AI have transformed every aspect of the financial services industry. Middle market financial services companies, especially, have a unique challenge: They must learn to navigate the journey without the more robust resources of their larger peers, nor the same level of flexibility and agility as their smaller ones. What does the COVID-19 crisis mean for your business, and for you? Why digital transformation and COVID-19 adoption has changed financial services. Establishing the right metrics to measure progress is financial services’ biggest challenge to moving forward with a new digital initiative (39 percent, compared to 27 percent for all organizations). Companies, by using AI to identify transaction anomalies, can better mitigate fraud and money laundering risk. Most major financial institutions are well aware of the imperative for action, and hence have embarked on the necessary transformation. Digital transformation has made a positive impact on business operations in the finance industry. Farmers cultivating cucumis melon, also known as yellow melon, say a chunk of their produce is left to go waste because of the lack... Knauf Ghana Limited, a global leader in gypsum production and related technologies, has signed a memorandum of understanding (MoU) with the Artisans Association of... © All Rights Reserved 2020. The driver behind it? In the past decade, a future with more people using technology has become a real possibility. Optimizing business efficiencies and operations across the supply chain is financial services organizations’ top digital priority (cited by 37 percent). The challenge they face is significant: in a competitive environment of rising cost pressures, where rapid action and response is imperative, financial institutions must modernise their technology function to support expanded digitisation of both the front and back ends of their businesses. Data privacy and cybersecurity will remain a serious problem for decades to come, as attackers use increasingly sophisticated methods and enter through a greater number of entry points due to the proliferation of technology platforms and IoT devices. Digital transformation (DT) in the finance industry is a concept which has now become part of a successful business strategy rather than just technology. Furthermore, the current COVID-19 shock has put immense pressure on technology capabilities (e.g. 3 insights into digital transformation in banking 1. Digital transformation, also known as DT, has made a significant impact on the financial services and industry. The key enablers for digital transformation are inclined to customer-centricity, organisational foundations, talent and changed culture for an innovation mindset. Banks need to wake up to the reality that the future of banking lies in mobile applications and online banking. Wall Street is no exception. Learning to connect the dots between digital initiatives, strategy, and business enablement will be critical. This starts with defining and documenting potential threats and making that a part of their existing risk management framework. Whether you want to focus on enhancing your customer interaction, increasing profitability through operational excellence, improving your employee experience, or deploying to the cloud for increased agility and flexibility. Changing customer expectations, cutthroat competition, increasing regulatory complexity, the pressure to streamline operations, and other factors are driving the push for reinvention and innovation. However, poorer communities still like to pay with cash as the population is showing what economists would call a higher ‘liquidity preference’ – they’re holding onto their cash in a time of uncertainty. Dynamic resources for board of directors and financial executives. Improving customer experience may be top of mind for most financial services institutions, but equally important is cultivating a strong employee culture. Cultivating a strong “employee experience” is critical. Financial services companies know this—and know they have a lot of catching up to do—compared to other industries. BDO is here to help your business – and you – navigate the COVID-19 health crisis, prepare for recovery, and once again, thrive. Nearly half (49 percent) state that interoperability with legacy technology is their biggest barrier to successfully implementing digital initiatives. Only 12% of financial services organizations aremature in their digital transformations and fall into the digital transformer cluster. Lower middle market companies, especially, anticipate the greatest increase in revenue and profitability (10 percent or more) over the next three years, and are thus willing to also increase their spending by the same percentage. The current crisis will also lead enterprises to further diversify their ‘just-in-time’ manufacturing operations, but it will also require them to develop fast and actual reporting systems across the chain. In a matter of weeks, the COVID outbreak forced radical changes in customer behaviour, moved significant portions of the economy online, and increased customers’ comfort and willingness to engage digitally. The Internet of Things (IoT) has significant implications for financial services institutions. That’s because, in executing a cloud transformation… The tax function is transforming. To effectively serve their markets, enterprises will require real-time data on temporary or permanent market interruptions. Training, managing and team-building will become primarily electronic; though, ironically, social and away-day events will also become more important as enterprises work to foster feelings of community within their businesses. They must also strive to cultivate a corporate culture that embraces constant experimentation and learning—one in which short-term mistakes and failures are expected and accepted in the pursuit of long-term innovation and value creation. But opting out of some of these cookies may have an effect on your browsing experience. The adoption of digital transformation is routing a new era or industrial transformation, allowing companies to track their operations, enhance productivity, augment business strategies, and … Blockchain’s significant promise has a third of all financial services organizations considering its deployment over the next year—a percentage expected to increase in the future. Their top driver is disrupting the industry to unlock new areas for growth, enter new markets or create new revenue streams (like via data monetization). Stay abreast of legislative change, learn about emerging issues, and turn insight into action. Thus, improving customer experience is 83 percent of financial executives’ top long-term business goal and one of their top three short-term goals (74 percent). This is going to transform working habits and remote working; use of managed office and co-working spaces will predominate as enterprises seek flexibility to manage uncertainty and sudden change. A few decades ago, the idea of having a good “customer experience” may mean having a pleasant experience at a physical bank or other financial services firm. Today, it’s nearly impossible to walk into a boardroom, client meeting, or innovation brainstorm without hearing the phrase bandied about at least once, twice, or—more likely—a dozen times. With the recent COVID-19 pandemic shock, the acceleration of digital transformation became more eminent. Let's take a … These cookies do not store any personal information. BDO is continuously finding new ways to help your organization thrive. 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