To everyone’s relief, gone are the days when making a transaction at the bank was an experience that involved waiting and standing in line. The financial services sector has been one of the most transformed in recent years. Since the pandemic, many banks have begun a process of closing branches to direct their resources to digitize more services.
Simultaneously, digital-only banks have begun to emerge, challenging, and putting pressure on traditional financial institutions. And for those organizations that want to survive in this highly competitive market, technology plays a leading role.
Technology can optimize a wide range of processes to offer better services to customers, but also reduce costs, streamline tasks and functions, increase efficiency, and improve communication and collaboration between different areas.
But one of the great advantages of technology-enabled digitization is that it creates a huge amount of data that is critical to improving decision-making by executives.
Making smarter decisions can be the cornerstone for success in your organization because data analysis is an extremely powerful tool that allows you to gain valuable insights about your customers and the industry.
On the other hand, we know that often software development can be quite costly. Therefore, in this article, we will talk about why an outsourcing partner can be very convenient for you to get the best results but keep costs at bay.
In addition, below we will talk about the most important technologies for improving decision-making in the financial industry, and the 5 axes to follow to reduce costs.
How can Technology Lead to Better Decision-making?
Let’s start by defining what efficient decision-making is:
First, it implies that all stakeholders, i.e., members of the organization, customers, and investors, are considered. It is critical to have a panoramic view of everything that is going on and to involve all the interested actors in the decisions.
And secondly, that decision is expected to result in a measurable improvement in some indicators, be it customer satisfaction, improved revenue, cost reduction in some processes, etc.
According to a Gartner survey of executives, in recent years decision-making has been perceived by them as more complex than in the past. This is due to the dynamics of rapid changes in business, which also require a quick reaction to adapt and stay ahead of the competition or the needs of consumers.
And a key element in dealing with this growing complexity is to rely on technology. With the help of data and analytics, the decision-making process will be more streamlined, faster, and less error prone.
We will see below which aspects of technology can help your organization achieve better results with its decisions:
With increased digitization, data can be generated from an infinite number of activities. This data can be obtained from customer consumption habits, market trends, competitor analysis, and the organization’s employees and will make accelerate decision-making.
To deal with a vast amount of data, it will also be necessary to have a platform that centralizes all the information and eases analysis for the decision-maker.
Data analytics tools are invaluable to organizations as they can supply new insights into customer needs or even how to improve efficiency internally.
By making it much easier to analyze market responses and customer feedback, it will be much quicker to implement the changes needed to stay ahead of the competition.
If fully exploited, analytics tools can be a fundamental resource for creating new products and services and detecting new market needs or for increasing the chances of success of marketing campaigns.
As mentioned above, efficient decision-making requires the participation of all parties involved. That is why software that allows the centralization of information and communication between the different teams is essential for this process.
Another fundamental aspect is digital tools to manage the organization’s resources, including everything from physical assets to employees.
Having updated information on assets ensures that equipment faults are detected quickly, reducing unnecessary expenses and other setbacks.
It also allows the HR department to better monitor employees’ work tools, which is especially useful when working in a remote modality.
In terms of employee management, platforms such as ERP enable you to know the performance of each team more precisely or even in a personalized manner. This means you’ll be able to find problematic areas, whether the workload is balanced, whether you need to hire more people, or whether you need to train a person or a team.
The most used software in the financial industry
Software development for financial companies stands for a significant challenge. Financial services applications have the duty of operating 24/7, offering a great UX, and above all, a high level of security due to the sensitivity of the information they handle.
Below we will see which are the most used software and which bring the greatest benefits to financial services:
Security is at the top of the industry’s priorities since a cyber-attack could cause enormous consequences such as economic and reputational losses and the consequent loss of customer confidence.
Automation through the power of AI enables cost and process optimization. More and more banks are replacing financial advice with recommendation algorithms from mobile applications. This mainly allows financial institutions to have less need for brick-and-mortar branches and invest much more in improving digital services.
Nowadays it is quite common for each client to self-manage their account and investments from their computer or cell phone without having to go to a bank branch.
On the other hand, chatbots are also becoming increasingly popular with customers. This type of virtual assistance has interesting benefits for the clients since it is available 24/7 and without delays like telephone lines or face-to-face service.
CRM and ERP
Managing company resources or customer relationships on a centralized platform is crucial to making better decisions and improving services while streamlining processes and lowering operational costs.
Financial markets are overly complex and changing, so the use of analytical tools is essential to advise clients. Data analysis software is used to create reports, find investment opportunities, and vet these investments.
Things have changed a lot in just a few years and now a large number of transactions are completed from mobile devices. That is why it is important not to neglect mobile platforms to offer a seamless experience to your customers and gain a competitive advantage.
Benefits of Financial Services IT Outsourcing
According to a survey, nearly half of senior decision-makers, one of the main reasons they choose a third-party technology solution is because they prefer to rely on the expertise of qualified professionals.
On the other hand, in today’s business environment, banks are constantly looking for technological solutions that will enable them to reduce costs, offer more efficient operations and improve customer satisfaction.
The following are the main benefits that experienced outsourcing providers can provide to financial services companies:
Work with experts
Having an outsourcing partner gives you access to the best talent in technology. Having experienced developers in your ranks is a big plus, as they can bring innovative technology solutions to the table and are prepared to work with tight deadlines.
Vendor development teams are used to dealing with fast-changing dynamics, so in times of crisis, they will be able to bring quick solutions. At the same time, it also allows you to work on several projects without generating delays since you will be able to allocate your in-house team to other tasks more related to the core business.
Undoubtedly, having an outsourcing team is less expensive than an in-house team, but the other advantage of this model is that it will greatly reduce the time of recruitment and selection. The developer will be available very quickly to start working on the project and this will allow you to lower hire costs.
Outsourcing allows great flexibility to scale up and down depending on the needs of the organization. The financial services industry is highly changing, and this model allows you to re-size your team considering these variations.
5 Dimensions for Optimization
The digital transformation journey is not an end in itself. On the contrary, it requires a well-thought-out strategy that enables better results, more agile processes, and the satisfaction of the new consumption habits (increasingly accustomed to digitalization).
For this reason, we will now look at a series of questions, as a guide, to help you understand what needs, priorities, and areas you want to leverage in your company.
These are the areas of your company where, through digital transformation, you can optimize processes, reduce costs, and improve efficiency:
Understanding the state of the budget and projections for the year allows for more efficient strategies to reduce costs through digitization.
What to ask yourself:
- What are the expenditure items? Resources, services, hardware, software.
- What are the costs of IT services?
- What is the evolution of the budget?
Flexibility and quick adaptation to the needs of the business when contracting will be differential to optimize costs and processes.
What to ask yourself:
- Do you have the required talents?
- How long does it take to recruit?
- Are you ready for the attrition rate?
Organization and processes
With digitalization also comes new challenges: corporate governance must be adjusted to the new processes to be transparent, efficient, and reflect the digital culture of the organization.
What to ask yourself:
- Is the organization optimal (roles and responsibilities, profile mix, seniority mix)?
- Is the governance adapted?
- Are the processes compatible with digitization?
Without losing focus on your core business, powerful data analysis and customer management tools will allow you to better understand your customers and enhance your services.
What to ask yourself:
- What are the main services?
- Are they at the expected quality level?
- Is there any data on customer satisfaction?
Migration to the cloud is a complex process that must be carried out according to a well-thought-out plan. To succeed, business objectives and human and technological resources must all be regarded.
What to ask yourself:
- What are the costs of your infrastructure components?
- Are datacenters cost-effective?
- What services do you need to migrate to the cloud?
Decision-making no longer must be subjective. With valuable tools for the generation, centralization, and analysis of data, executives will have indispensable support to improve decision-making, making it faster, efficient, and generating a positive impact for the organization.
The financial services market is undergoing significant transformation, and those who adapt to the changes and have the necessary technological tools will gain a competitive advantage.
So, if you are looking to improve your organization’s decision-making, you will need the best talent in technology to get fast solutions, leverage your services, optimize costs, and streamline your processes. We want to help you in this journey, contact us to learn more!