How financial services firms can reduce costs and drive efficiencies
Financial services firms, thanks to their enhanced operating models are facilitating a significant change, allowing them to drastically reduce their operating costs and at the same time, ramp up efficiencies in their day to day.
Software-as-a-service (SaaS) and Business-process-as-a-service (BPaaS) are two of the new models revolutionising financial services. Rather than businesses buying or licencing a piece of software of which they only use a part, these operating models allow financial services businesses to make use of and pay for only specific pieces of software they need, drastically reducing their expenses. The lowering of the cost to serve customers ultimately allows these firms to focus on their core business.
These new operating models also help banks to standardise and automate internal business and systems processes to run the operations more efficiently and effectively, Further empowering their employees with an integrated solution that automates and unifies workflows between all critical areas of the business, thereby eliminating administrative tasks and freeing time to focus on more strategic activities.
For example, employees who perform tasks such as processing payments and undertaking corporate actions with their limited ability and skill, can now be provided with superior analytics and processing speeds in automation, dramatically reducing the risk of human error.
Which bank doesn’t want to connect every part of their business to reduce wasted time and talent? And Give every employee a clear, real-time view of what’s happening in the business today from any angle. And collect and interpret data automatically to prioritise opportunities and further empowering them to predict what is likely to happen tomorrow so they can adapt quickly and plan ahead.
Furthermore, new products, services, business models and revenue streams can be identified and planned with an in-depth understanding of what their customers value, strengthen relationships, and maximize brand loyalty.
With both SaaS and BPaaS there is a large degree of flexibility of adding functionality and solutions as needed and scaling them as the business needs change, additionally providing customers with the benefit from pre-configured content, which limits the configuration possibilities but allows for fast and low-risk consumption of innovations in a quarterly cycle.
Such a strategic project certainly brings tremendous opportunity and advantage – but only when decision-makers fully consider their options throughout the process.
Further down the track they can implement proven, intelligent processes to work immediately and start seeing results by incorporating innovations such as artificial intelligence and machine learning into their business – at their own pace. There is also a reduced expense as the business is neither responsible for IT operations nor application management of said operating models.
Instead, they can adapt and stay competitive by quickly evolving their operations through technology and business changes, delivering better customer and regulatory outcomes. And forgo long delays between upgrades and the disruption and risk that comes with technology projects. The option also allows for shifting costs related to hardware, maintenance, and software upgrades from upfront investment (CAPEX) to ongoing subscription fee (OPEX).
These new operating models are especially attractive to financial services businesses, given heightened regulatory focus on compliance and ensuring financial products and services genuinely meet customers’ needs.
Global and local financial regulators increasingly want more data and information from financial services firms and require banks and wealth managers to be completely on top of their data and privacy responsibilities and further dictating how these products can be offered.
With a team asking the correct questions to prepare and set the right expectations, the right SaaS and BPaaS products, may support these goals allowing financial institutions an efficient way to meet new regulations across their digital operating models, and access better data analytics, at a lower cost.
A single platform that continuously improves will solve problems. Legacy systems that require an upgrade or enhancement mean that businesses can’t provide customers the advantage of new capabilities fast enough.
Currently in a Covid-19 era, we are experiencing a lengthening period of intense change in financial services and an unparalleled era of tech-driven innovation and lost or failed business opportunities. But there is still plenty of opportunity for banks to embrace and embed these product solutions into their business models.
What Covid-19 has done is accelerate the pace of digital transformation and some businesses are wishing they had implemented simplified and standard digital technologies a lot earlier, which would have allowed for easier back-end process adoption.
For the transition to run smoothly and successfully, there has to be buy-in from all stakeholders who are across all existing system functionality or aware of coverage of current business and system processes. There needs to be consensus which starts with the planning and ends with a vision, readiness to change, and change management.
There are no right or wrong answers, decisions will not happen in one day because there are many different aspects and decisions to consider. Each strategy offers a unique set of opportunities that can make adoption successful.
There are a number of Financial SaaS and BPaaS companies who offer expert guidance to enable technical and non-technical decision-makers to understand the advantages of deployments of new financial implementations.
I prefer not making any recommendations on any particular SaaS or BPaaS vendor, as one size does not fit all. Companies first need to understand their business strategy, gather their specification requirements, analyse their needs, evaluate their options, define their requirements and last but not least plan and manage change.
No matter which deployment and implementation strategy my clients choose to make their move to, it’s imperative for their business to accelerate their business visions, outperform their competition, exceed customer expectations, and keep employees empowered and engaged – today, tomorrow, and the future.
