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Financial services organisations must adapt to flourish in a digital future

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Financial services organisations must adapt to flourish in a digital future

By Gonzalo Benedit, President, EMEA, APJ, Workday

The global financial crisis of 2008 irrevocably altered the way that the financial services industry operates.

The chaos left in its wake heralded a new era of increased regulatory compliance requirements for banks and financial services institutions. For companies operating in 2018, more stringent legislation is simply an everyday aspect of conducting business — but it also presents an opportunity to grow and develop, if digital transformation is prioritised.

The term ‘digital transformation’ can refer to many things. In this instance, it should be understood through the lens of an ongoing initiative focused on automating processes, developing agile frameworks, and cultivating compelling digital experiences for customers. It is also critical to remember within this, that unlocking this potential is directly related to being able to gain more intelligence out of analytics and data. In this article, I therefore want to explore some of the key elements of digital transformation that financial services companies must embrace if they are to thrive in the digital era.

Move forward, never back

Digital disruption is a revolutionary presence in all markets, but none more so than the financial services sector. This sector is renowned for its trailblazing new entrants becoming the poster children for technological advancement. These tech-savvy competitors, which include Digital Banks and FinTechs, have created an environment where traditional institutions, including ING, Lloyds and Deutsche Bank have had to drastically alter their core offerings just to survive.

FinTechs are appealing to customers because they are simple to use, and make life easier. And amongst traditional banks, there has been a realisation that these agile upstarts represent serious competition across not only emerging markets, but also Western Europe. The strict compliance regulations that have often hamstrung traditional institutions from an innovation perspective must be overcome. The risk factor associated with strict regulations is now outweighed by the prospect of losing out to competitors; McKinsey reported more than three years ago that legacy financial institutions will see profits decline 20 to 60 percent by 2025 if they fail to evolve digitally.

Some of the world’s leading financial services organisations have already made positive steps to instigate change through migrating to the cloud. And whilst cloud is widely recognised to be a cost-effective approach, the benefits extend much further. For instance, cloud computing acts as a safeguard against technology obsolescence by removing the need for expensive, time-consuming upgrades. And from a security perspective, it allows organisations to demonstrate to regulators, through a single-security model, that their data is safe and secure.

Cloud computing allows financial services organisations to rework legacy, regulatory and management reporting, and replace them with more dynamic alternatives. This lean methodology removes unnecessary processes and admin where it does not add value, and fosters an environment of continuous improvement. In addition, it is important to remember that regulations are not static. They constantly evolve, and a cloud-based approach allows services to remain compliant without imposing upgrade burdens on the end user. Therefore, it is perhaps unsurprising that PwC has predicted the cloud is set to become the primary infrastructure model in financial services.

Manage back-office operations effectively

Often, financial services organisations focus almost exclusively on optimising front-end services to enhance customer experience, but back-office capabilities deserve an equal amount of attention. Currently, there are question marks over the technologies and tools required to support those who pay the bills, process payroll, create financial statements, and plan for the future. And that’s before considering decision-makers who need access to accurate data and more comprehensive business insights. Many financial institutions find themselves off the pace when it comes to managing processes and procedures for maximum business benefit.

Don’t overlook employees

Because digital transformation has become commonplace, general expectations have altered dramatically as a consequence, and not just for customers. Employees are used to intuitive and engaging experiences during daily life and expect the same experiences in the workplace. Employees want the interfaces they interact with to be intuitive and mirror those in the consumer world, even when conducting back-office processes such as managing financials, talent and payroll.

Traditional financial organisations that fail to adapt to evolving employee expectations are likely to encounter issues with attracting and maintaining talent. On the other hand, for those that consolidate systems for finance and HR, the benefits are immediately apparent. Within the financial services sector, companies can be expected to see improvements including reduced managerial time spent on performance and compensation reviews, time-to-fill for critical positions, and a lower voluntary turnover of employees. And perhaps most importantly, combining these systems allows HR executives to increase time spent on strategising, rather than on burdensome administrative tasks.

Look to the cloud

Digital transformation is an ubiquitous term, but it needs to be made tangible in order to be of any practical use. For financial institutions, this means linking the concept to deliverables such as cost reduction, strategic expense management, cost-capture and financial system implementation. Key to success is a move away from legacy on-premise software, towards the untapped benefits of the cloud.

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Australia says no further Facebook, Google amendments as final vote nears

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Australia says no further Facebook, Google amendments as final vote nears 1

By Colin Packham

CANBERRA (Reuters) – Australia will not alter legislation that would make Facebook and Alphabet Inc’s Google pay news outlets for content, a senior lawmaker said on Monday, as Canberra neared a final vote on whether to pass the bill into law.

Australia and the tech giants have been in a stand-off over the legislation widely seen as setting a global precedent.

Other countries including Canada and Britain have already expressed interest in taking some sort of similar action.

Facebook has protested the laws. Last week it blocked all news content and several state government and emergency department accounts, in a jolt to the global news industry, which has already seen its business model upended by the titans of the technological revolution.

Talks between Australia and Facebook over the weekend yielded no breakthrough.

As Australia’s senate began debating the legislation, the country’s most senior lawmaker in the upper house said there would be no further amendments.

“The bill as it stands … meets the right balance,” Simon Birmingham, Australia’s Minister for Finance, told Australian Broadcasting Corp Radio.

The bill in its present form ensures “Australian-generated news content by Australian-generated news organisations can and should be paid for and done so in a fair and legitimate way”.

The laws would give the government the right to appoint an arbitrator to set content licencing fees if private negotiations fail.

While both Google and Facebook have campaigned against the laws, Google last week inked deals with top Australian outlets, including a global deal with Rupert Murdoch’s News Corp.

“There’s no reason Facebook can’t do and achieve what Google already has,” Birmingham added.

A Facebook representative declined to comment on Monday on the legislation, which passed the lower house last week and has majority support in the Senate.

A final vote after the so-called third reading of the bill is expected on Tuesday.

Lobby group DIGI, which represents Facebook, Google and other online platforms like Twitter Inc, meanwhile said on Monday that its members had agreed to adopt an industry-wide code of practice to reduce the spread of misinformation online.

Under the voluntary code, they commit to identifying and stopping unidentified accounts, or “bots”, disseminating content; informing users of the origins of content; and publishing an annual transparency report, among other measures.

(Reporting by Byron Kaye and Colin Packham; Editing by Sam Holmes and Hugh Lawson)

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GSK and Sanofi start with new COVID-19 vaccine study after setback

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GSK and Sanofi start with new COVID-19 vaccine study after setback 2

By Pushkala Aripaka and Matthias Blamont

(Reuters) – GlaxoSmithKline and Sanofi on Monday said they had started a new clinical trial of their protein-based COVID-19 vaccine candidate, reviving their efforts against the pandemic after a setback in December delayed the shot’s launch.

The British and French drugmakers aim to reach final testing in the second quarter, and if the results are conclusive, hope to see the vaccine approved by the fourth quarter after having initially targeted the first half of this year.

In December, the two groups stunned investors when they said their vaccine would be delayed towards the end of 2021 after clinical trials showed an insufficient immune response in older people.

Disappointing results were probably caused by an inadequate concentration of the antigen used in the vaccine, Sanofi and GSK said, adding that Sanofi has also started work against new coronavirus variants to help plan their next steps.

Global coronavirus infections have exceeded 110 million as highly transmissible variants of the virus are prompting vaccine developers and governments to tweak their testing and immunisation strategies.

GSK and Sanofi’s vaccine candidate uses the same recombinant protein-based technology as one of Sanofi’s seasonal influenza vaccines. It will be coupled with an adjuvant, a substance that acts as a booster to the shot, made by GSK.

“Over the past few weeks, our teams have worked to refine the antigen formulation of our recombinant-protein vaccine,” Thomas Triomphe, executive vice president and head of Sanofi Pasteur, said in a statement.

The new mid-stage trial will evaluate the safety, tolerability and immune response of the vaccine in 720 healthy adults across the United States, Honduras and Panama and test two injections given 21 days apart.

Sanofi and GSK have secured deals to supply their vaccine to the European Union, Britain, Canada and the United States. It also plans to provide shots to the World Health Organization’s COVAX programme.

To appease critics after the delay, Sanofi said earlier this year it had agreed to fill and pack millions of doses of the Pfizer/BioNTech vaccine from July.

Sanofi is also working with Translate Bio on another COVID-19 vaccine candidate based on mRNA technology.

(Reporting by Pushkala Aripaka in Bengaluru and Matthias Blamont in Paris; editing by Jason Neely and Barbara Lewis)

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Don’t ignore “lockdown fatigue”, UK watchdog tells finance bosses

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Don't ignore "lockdown fatigue", UK watchdog tells finance bosses 3

By Huw Jones

LONDON (Reuters) – Staff at financial firms in Britain are suffering from “lockdown fatigue” and their bosses are not always making sure all employees can speak up freely about their problems, the Financial Conduct Authority said on Monday.

Many staff at financial companies have been working from home since Britain went into its first lockdown in March last year to fight the COVID-19 pandemic.

One year on, the challenges have evolved from adapting to working remotely to dealing with mental health issues, said David Blunt, the FCA’s head of conduct specialists.

“During this third lockdown, there has been a greater impact on mental well-being, with many people struggling with job security, caring responsibilities, home schooling, bereavements and lockdown fatigue.”

Bosses should continually revisit how they lead remote teams, he said.

“The impact of COVID-19 is creating a huge workload for those considered to be high performers, while the remote environment potentially makes it much more challenging for those who were previously considered low performers to change that perception,” Blunt told a City & Financial online event.

Companies should consider “psychological safety” or ensuring that all employees feel confident about speaking out and challenging opinions.

“We’ve heard varying reports of how successful this has been,” Blunt said.

Pressures in the financial sector were highlighted this month when accountants KPMG said its UK chairman Bill Michael had stepped aside during a probe into comments he made to staff.

The Financial Times said Michael, who later apologised for his comments, had told staff to “stop moaning” about the impact of the pandemic on their work lives.

Blunt was speaking as the FCA next month completes the full rollout of rules that force senior managers at financial firms to be personally accountable for their decisions to improve conduct standards.

There have only been a “modest” number of breaches reported to regulators so far as firms worry about being “tainted” but more cases will become public as sanctions are revealed, Blunt said.

“Regulators won’t be impressed by lowballing the figures.”

(Reporting by Huw Jones; Editing by Mark Heinrich)

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