Tim Wakeford, Vice President of Financials Product Strategy, EMEA,Workday
We are now in an era where financial services companies and institutions are having to innovate to compete with new fin-tech startups and keep up with customer expectations, developing emerging technologies and adopting new business models.
This situation was brought into sharp focus most recently in PwC’s Global FinTech Report, in which the vast majority (88%) of executives surveyed reported part of their business was at risk due to standalone fintech companies. Plus, over three-quarters(77%)revealed how they plan to increase internal innovation efforts over the next three to five years, in order to disrupt from within.
But how can firms innovate effectively without overlooking their most important asset – their employees – as well deal with all that this new landscape is throwing at them?
Innovate beyond the customer experience
The customer experience is, more often than not, the key focus of innovation efforts for both market-disrupting fintechs and for the in-house digital innovation teams in traditional financial services firms.
The reason for this is clear: if a financial institution can optimise customer experience, they are able to rely on their customers’ “share of wallet” to generate revenue.
However, this is not the only area where financial services firms should be using new technologies to innovate and disrupt. Firms need to look at their own internal systems and consider, in particular, the employee experience as well as the customer experience.
This is important as, for one, customer experiences are determined by all of their interactions with a company. Therefore, interactions with employees, as well as interactions with a firm’s products and services are all crucial to an overall experience.
IBM’s recent global study on “The Employee Experience of Financial Services Workers” clearly revealed how positive employee experiences improve staff performance, discretionary effort and retention. And providing “meaningful work” is the key driver of employee experience, which ensures that staff are using their skills and talents to their full potential and that they feel aligned with the company’s core values.
From performance management to performance enablement
In addition to those provided to customers, consumer-grade mobile and technology experiences are just as important for those employees on the front line of customer communications and those back-office staff responsible for getting the business done in the fastest, most reliable and satisfactory way for the customer.
Employees need quick, easy and reliable access to the right information to help them do their jobs efficiently, without getting bogged down due to outdated IT systems that require too much manual input and too many repetitive tasks on the part of the employee.
The aforementioned IBM study stresses that financial services companies have to allow their staff to fully utilise their talents and skills in order to have a really positive employee experience. Employee engagement is absolutely key to helping staff align their own goals with those of their teams and their employers.
This requires a shift in organisational culture and a move away from outdated internal systems that were designed by firms centred on performing top-down backward-looking staff reviews. Employees need access to accurate, up-to-date personal and financial information and they need the best analytics tools in place to gain these business insights that will help them do their jobs to a high standard.
Innovating responsibly while managing risk
Finally, there is the issue of how financial services companies – in an industry that is heavily regulated and, traditionally, risk averse –can really innovate fast enough. The outdated legacy IT systems prevalent in these firms are not capable of providing the kinds of consumer or employee experiences required to compete in today’s fast-moving market.
In order to compete with tech-first startups and agile, fast-moving fintechs, more established financial services organisations have stronger compliance controls in place, which means that they are still best-placed to manage risk and innovate responsibly.
Cloud technologies allow traditional financial services firms to operate at a scale and elasticity that just would not be possible with their legacy IT systems from ten or twenty years ago. Modern cloud solutions deliver intuitive, scalable platforms which allow companies to rapidly adapt to any emerging digital security threats and to release new features, updates and fixes quickly and easily, as and when needed.
Importantly, cloud technology developers are also able to swiftly update their software services to ensure that they and their clients are compliant with emerging and new regulations within the industry.
With all of this in mind, it is crystal clear why PwC predicted that the cloud is set to become the dominant infrastructure model in financial services. It’s because to meet both customer and employee expectations, financial services organisations need to be agile, nimble, able to adapt quickly to changes in the marketplace, to new demands from consumers and to emerging regulations across the industry.