By Colin Dean is director of digital transformation (financial services and insurance) with Hyland.www.hyland.com

The technological revolution in finance means that, rather than being a once in a decade transformation, going digital has become a decade-long process. Against this backdrop, banking and insurance executives must change their strategic and mental approach, because carried out ad-nauseam the transformation mentality can be damaging.

Colin Dean

Nevertheless, there is still a strong imperative to drive financial services down a data-rich and technologically efficient path. Indeed, many banks and insurers still have a digital deficit to overcome. However, for those organisations with a clear product and customer service strategy, digital optimisation is often a more appropriate approach than organisational transformation.

This is not to say that banks, wealth managers and insurers won’t undergo many transformative digital changes in the years to come – but rather that leaders need to build both an atmosphere and an infrastructure that ensures each change smoothly adds value to a greater strategic focus and is not overly disruptive to the organisation.

Transformation is Strategic

Digital transformation means a foundational change in how an organisation delivers value to its customers. Successful digital transformations do not begin with technology: Instead, the focus is on overhauling the organisation with a customer-focused goal in mind, such as building customer-centric new products and services.

Such an undertaking is high-risk for any organisation, more so in something as finely balanced, unpredictable yet also highly scrutinised and regulated as finance. Financial services have arguably already undergone a major digital transformation, but it took 20 years and was fraught experience for many companies.

Finance institutions may not welcome another revolution but the good news is, that they have yet to realise many of the advantages of the last one. Digital optimisation can ensure they do.

Digital Optimisation Offers Evolution and Efficiencies

Digital optimisation means ensuring that a company is using its technology effectively; is fully digital in terms of its functions and processes; and therefore able to leverage its data, human resource and brand into new platforms and formats, as the need arises. It involves ensuring an organisation is always prepared for change, without being driven by it.

Much of the current technology being considered by financial firms does not involve changing the fundamental product. Instead, fintech more often than not uses new methods to automate and improve current services; new consumer platforms must be integrated alongside old favourites, as new generations of customers are targeted, but the level of customer care must be upheld.

Digital optimisation has proven highly effective for this purpose as it uses technology to implement current strategies and make processes smoother; to improve current services rather than offer radically new ones – even if those services are being presented to the customer in an entirely new way. At the same time, it drives efficiencies and paves the way for new technologies to be adopted safely and smoothly.

Optimising People and Technology

Optimisation is underpinned by technology – because the ability to freely share and access data is crucial in a digitally optimised organisation – but it also revolves around people. By allowing people, processes and technology to function together seamlessly for the benefit of your customers, the optimisation process encourages an entrepreneurial atmosphere where staff try to use information and available tools to save time and deliver great service.

Data is at the core of this process, as all new digital innovations require a stream of fresh information to function effectively. This can be delivered through a single enterprise hub for data, where information gathered on many formats will be visible to authorised members of staff on a single screen. By providing users with easy, secure access to complete information – anytime, anywhere, on any device – an organisation can facilitate more responsive, meaningful interactions.

This is the final area of digital deficit that many financial services providers need to address. There has been understandable caution given the strengthening of regulations on data, but free-flowing information is crucial for the next generation of technologies. Their introduction should not be a true transformation, however, because it is important that humans remain in charge at a strategic level.

Freeing Data and People to Close the Digital Deficit

Optimisation is the key to extracting real value from technology investments to date, and to integrating tomorrow’s systems with a minimum of disruption and while maintaining strategic aims. By removing business silos, seamlessly integrating core or legacy systems, eradicating reliance on shadow systems and sharing data across the business, banks can maximise the value and savings available from existing IT infrastructure and investments, rather than replacing them. That’s the technological side, and data availability is at its core.

On the human side, by facilitating a greater entrepreneurial focus on the development of technology and uses, organisations are in a much stronger position to resolve the digitisation deficits in their operations, and will become highly agile in their ability to spot, and adapt to, new consumer trends.

Financial services companies that aim for optimisation to back a robust strategy aimed at the customer, may even find that the process is transformative.