Bank IT Asia, Singapore: Cognizant Experts Say Digital Transformation in Banks is as Much About Streamlining Middle and Back Office as About Defining the Bank's Face
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“Banking and financial services organizations are using digital technologies to rewrite their future,” write Cognizant’s Nachiket Deshpande, Global Delivery Leader, Banking and Financial Services, and Manish Bahl, Senior Director, Center for the Future of Work. “Cognizant’s research shows that banking and financial services (BFS) businesses stand to gain more by going digital than the cross-industry average.” Excerpts:
“The basis for competition amongst BFS companies has expanded beyond the traditional arsenal of price, product features, service quality, and branding, to include a new category ― hyper-personalization.
As companies work towards hyper-personalization, they will move beyond traditional transactional relationships with customers and embrace a new standard of providing highly bespoke and integrated services. Big data and artificial intelligence will spur this change by helping companies modernize and accelerate the pace of change in the front-office.
What about the middle- and back-office? Digital has as much to do with streamlining middle and back-office operations and improving processes as it does with defining the face of the company.
To unlock cost-saving opportunities of digital, the transformation cannot be superficial but must run throughout the business. Customer-centric investments in front-end services will deliver value only if the middle and back-end systems are capable of delivering those services in a sustained and flexible manner.
Banks looking to reduce human error and get away from the complexity of legacy technology and operations must consider Intelligent Process Automation/AI and deep data mining. Insights generated from middle office data can go a long way in transforming the customer experience.
By modernizing their tech foundation leveraging software re-engineering, back-end refactoring, complex platform engineering and other techniques, banks can turn their weakness into a strength to effectively address the fintech threat.
While banks are warming up to hybrid clouds, embracing cloud-native apps can really help them unlock their innovation potential with start-up speeds.
As new security threats emerge, banks need to rethink their traditional approach towards security from merely a cost function to a long-term investment.
The goal of digital transformation for the BFS industry should also be to simplify the business. The industry will be able to realize the full potential of digital transformation when companies reduce the complexity of their legacy systems, processes, and structures in favor of better overall customer engagement.”
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