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Impact of Digital Transformation in Financial Services

Mark John

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Impact of Digital Transformation in Financial Services

Image by mohamed Hassan from Pixabay

Digitization affects all branches of a company. This is why companies must review their economic model, whatever the size or sector of activity. At the same time, they need to upgrade their organization to remain competitive. And financial services are no exception.

But what is the impact of digital transformation on financial services?

Discover through this article how digitization is pushing companies to redefine their organization, their challenges, and their optimization levers.

Impact of Digital Transformation in Financial Services: Opportunities

The digital transformation will lead to an upheaval in the organization of financial services. It will do so by saving costs and time in terms of production and data consolidation tasks. This reorganization directly impacts the role of accountants, financiers, and management controllers. They will lean towards more strategic and analytical tasks with higher added value.

Indeed, accountants become “Business Process Analyst,” ensuring that the various procedures are effectively implemented, while management controllers become “Business Analyst.”

These transformations will make it possible to improve internal decision-making processes. And thus, it will allow better management of the company’s performance.

The position of CFOs is also set to change. The digitization of procedures will push them to focus more on data analysis and the evaluation of political and strategic performances.

As a result, this change will enable them to become valuable players in targeting the best opportunities.

In addition, the digitization of internal processes leading to a real-time view of flows will allow financial directors to anticipate risks. It will guarantee the best commercial relations between suppliers and customers.

These different factors will place financial services at the rank of essential levers for a company’s development. It will lead them to broaden their areas of digital, statistical, operational, and collaborative skills.

Impact of Digital Transformation in Financial Services: Challenges

The digital transformation within financial services involves new challenges:

1. The dematerialization of processes

Under the impetus of the new rules and procedures, the financial departments are required to digitize all the processes. This is important not only to make all of these directives operational but also to make exchanges more reliable and simpler.

This is why various tools are needed, such as

  • Electronic transmission of information,
  • Archiving of documents,
  • Electronic invoices,
  • Automatic control &
  • Validation procedures.

They are new tools responding to the “zero paper” strategy.

2. Information reliability and security

Digital Financial Service can take advantage of these new digital tools in addition to the obligation of various tax regulations. They can help to secure the entire payment chain, from ordering to invoicing. Also, they allow real collaboration between the various stakeholders.

3. The relevance of the reports

Collaboration between the different teams considerably facilitates the exchange of data and information between all the parties, both internally and externally. Thus, new technologies are allied to collaboratively generate increasingly in-depth reporting.

4. Company image

The new organization of financial services allows employees to refocus on other tasks. This redirects the entire company towards sharing and creating values, creating a new dynamic, responsiveness, and innovation source.

These elements directly impact customer relations and satisfaction, conveying an avant-garde and efficient image for the company.

Impact of Digital Transformation in Financial Services: The 5 Major Levers

There are 5 effective levers that will help transform financial services. They are briefly discussed below.

1. Automation of repetitive, tedious tasks

In order to improve response times, limit the number of errors or even facilitate work between collaborators. Semantics or cognitive technologies are used to automate certain tasks and focus on activities requiring real business expertise.

2. Simplify, reduce or eliminate complex tasks

The multiplication of external and internal constraints has pushed the missions of agents to become more complex. The use of software and its new technologies can simplify processes and pool certain tasks. Operational costs are then reduced, which leaves the possibility for actors to focus on cases requiring more treatment.

3. New work arrangement

The new organization of financial services brings managers’ role to transform, becoming real support for its teams. It increases the opportunities to serve the needs of customers. Employees and managers interact better together, generating a source of value for the company and beyond.

4. Adaptation of the infrastructure

Because of the increase in data, connected objects, and the new decentralized systems, organizations have to rethink their IT infrastructure. It will help to optimize their deployment as quickly as possible while taking advantage of innovations.

5. Increase in value

The automation of tasks and the better processing of the data collected allow employees to increase their skills. And this creates value in more complex services.

Conclusion

The transformation is here to stay. The way of doing business has changed; financial services seek to renew themselves in an environment. In this, new and strong players are using technology to their advantage, managing to satisfy the public’s current needs – a public who is now digital and ready to face the impact of digital transformation in financial services.

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