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Finance Industry

Transitioning from legacy IT and embracing the digital opportunities in finance

by Mike Jones in finance 20/07/2022

Digital transformation empowers the finance industry to enhance business agility and prepare for future developments. In the Finance 2025: Digital Transformation in Finance report, Deloitte explained that automation, cloud-based and cognitive innovation enable finance businesses to transform and simplify activities.

Automation will allow finance-related businesses to improve their costs by restructuring their workflows and how they’re processed. Those businesses reliant on traditional technology and hesitant to adopt new systems are potentially at risk of reducing their progress and being capable of offering the best user experience.

Other companies have embraced digital transformation and utilised new solutions to meet the changing demands of their customers. For large-scale organisations, this can be challenging and often is why companies are hesitant to integrate new technologies. Ageing architectures can hinder the ability to adopt new systems and utilise the full potential of the technology available today within finance.

These typical challenges highlight the importance of creating business agility in pursuing new customers and improving the end-user experience. The ability to connect with people and deliver financial services to more individuals while meeting customer demands requires a consistent and reliable service. Many options are emerging for finance companies, but for anything to happen, businesses need to ensure they have the agility to deliver the right services to the right people at the right time.

These challenges are typical for larger, incumbent finance businesses, due partly to the rising competition from smaller, agile fintech companies which lack the limitations of large, legacy infrastructures. Mobile banking is playing a vital role in changing how finance businesses engage with their customers. According to research from McKinsey Global Institute, digital transformation represents some of the most critical methods of driving financial inclusion. Smartphone digital payments, for example, have transformed the customer experience, resulting in increased expectations surrounding the broader user experience and encouraging companies to accelerate their digital transformation plans.

The rise of emerging technologies such as big data and IoT is accelerating the transformation toward intelligence and cloud technologies. The number of data businesses generate today is increasing, and managing large volumes of information has driven greater use of AI and other technologies. Financial institutions that maintain pace with the rapid changes of digital transformation are likely to be the ones that reap significant benefits. Companies that fail to address the importance of digital services could lose their competitive advantage.

IT tech and services company Accenture believes that fintech-driven banking is the path toward successful talent acquisition and retention as more businesses face rising pressure to remain digitally competitive and avoid the potential of losing customers and market share.