Accelerating the Digitization of Financial Services
Responding to New Urgency
Over the past decade, there has been a paradigm shift in the financial services sector accelerated by technology. From enhancing digital and mobile experiences to deploying robo-advisors and chatbots, traditional financial institutions have been under steady pressure to keep pace with emerging fintech players. The COVID-19 pandemic has signaled a pressing need for financial institutions to lean into technology and accelerate the adoption of digitally-enabled customers.
At the beginning of 2019, only 12% of financial services organizations said they were mature in their digital transformation efforts, according to Gartner.
The crisis has reinforced the power of enterprise software and advanced technologies, like artificial intelligence (AI), blockchain and robotic process automation (RPA), to advance digital experiences and capabilities. But the pandemic also illuminated the disparities between larger institutions and smaller banks serving minority or rural communities. With banks and their customers grappling with social distancing, work-from-home mandates and economic instability, the conversation around technology has evolved from improving competitive advantages to enabling economic continuity.
Deloitte found that only about 25% of financial services organizations relied on existing business continuity plans to manage through the early days of the COVID-19 crisis.
Rethinking Operations and Processes
Many banks had to quickly restructure their operations to keep employees and customers safe while maintaining business continuity during the pandemic. Companies that invested in advanced technologies before the crisis were quicker to automate manual processes and service their remote teams. For many organizations, technology enabled advisors and customer service agents to manage the influx of demand while providing personalized support and processing loan requests from home.
As banks continue to streamline operations and adapt to this new environment, some are considering technology solutions like RPA. RPA can help expedite repetitive processes and bolster fraud detection, privacy and data controls, which have become especially important for remote teams.
BIGGEST DRIVERS OF DIGITAL TRANSFORMATION
Improve customer experience
26%
Graph from FinTech Futures
A Laser Focus on Customer Experience
Streamlined, easy-to-use digital experiences and financial tools can help customers navigate the pandemic safely and efficiently as they limit or avoid close in-person interactions. Companies that make this digital shift successfully and deliver superior experiences developed with the customer in mind, will be in a better position to maintain customer confidence and loyalty during and after the crisis.
AI has been a growing trend in finance, particularly for addressing customer pain points and reducing costs and risks. The heightened demand for digital banking options amid COVID-19 makes an even more compelling case for the adoption of sophisticated automation and customer service AI. Software and digital platforms can also enhance the user experience by allowing customers to apply for a credit card efficiently or open a new account online.
According to Deloitte, 53% of financial services companies view digitizing client interactions as a top priority for confronting the COVID-19 crisis.
Innovating for Small Business Relief
Financial institutions have been flooded with Paycheck Protection Program (PPP) loan applications as struggling small businesses attempt to secure funds from the Small Business Administration (SBA). According to the National Confederation of Independent Business, 70% of the more than 30 million small businesses in the United States applied for PPP loans in early April. This massive demand prompted Finastra to develop new software solutions to help its customers — 4,200 U.S. banks and lenders — process PPP loans and get funding into the hands of business owners quickly.
“We have always placed social responsibility at the heart of our culture, using our technology, talent and network to build a platform for positive social change. We believe strongly in the idea of doing well by doing good.”
Simon Paris, CEO, Finastra
Finastra offered the software, Fusion Small Business POS, free of charge to customers and prospects. This made it easier for smaller banks and credit unions in communities with large unbanked business populations to access the platform. The Fusion application process allows lenders to submit an applicant’s information to E-Tran, the SBA’s loan-servicing portal — electronically, a capability many smaller regional banks don’t have.
The Finastra team brought the product to the National Bankers Association and the Alliance of African American CDFI CEOs to reach underserved communities hit hardest by the pandemic. Five hundred banks downloaded the software within the first 24 hours of the launch, helping small businesses around the country to receive crucial funds.
Digitizing for the Near- and Long-Term
Over the past decade, changes in customer behavior and digital capabilities have reshaped the financial services industry. The ability to successfully undergo digital transformation has become critical to a company’s future and longevity, and COVID-19 has only compounded this reality.
Financial institutions are facing extraordinary pressure as businesses and customers rely on them in unprecedented ways. While technology remains a necessity, innovation is the key to gaining a competitive edge. Banks that deeply commit to their digitization efforts now by adopting advanced technologies like AI or RPA to modernize their business — both internally and externally — will be more resilient during, and long after, the COVID-19 crisis.
