What Financial Services Firms Can Learn From The Tech Giants

Organizations in the financial services industry (FSI) have nearly unlimited data at their fingertips. But many have yet to undergo the digital transformation that could turn their siloed data into valuable, impactful information.

The type of information that would allow FSI organizations to provide their customers with more targeted offerings—and boost the bottom line. Unfortunately, many FSI organizations are encountering roadblocks on their digital journeys. 

According to Workday’s global survey of senior business executives “Closing the Acceleration Gap: Toward Sustainable Digital Transformation,” financial services leaders say organizational culture and analytics are the biggest transformation blockers, at 40% each. 

In this blog, I’ll provide answers to common questions about how FSI organizations can reap significant benefits from digital transformation—including harnessing and using data like the tech giants

Digital transformation is such a major undertaking. Where should FSI organizations even begin?

FSI organizations need to first focus on data. We talk a lot about how technology organizations, such as Amazon, Facebook, and Google, know so much about us because of how we click on their sites. Our financial services providers also know a lot about us because how and where we spend our money and time informs them. They need to harness that data to drive innovation and growth, provide more robust offerings to their customers, and create a better customer experience.

And just like technology companies, FSI organizations can make better recommendations to their customers by using data to make more specific, less generic offers. For instance, if customers have a bank account with their financial institution, why don’t they also have their mortgage there? If the customer’s credit score is great, why don’t they have a bank’s credit card? From an insurance perspective, why do customers have their home insurance policy here, their auto insurance there, and their life insurance over there—what if insurers offer them a bundle? 

As they undergo a digital transformation, what are the main considerations FSI organizations should keep in mind?

Perfection is the enemy of the good. There are many digital transformations to consider. Waiting to get the perfect intersection of each is impossible. Instead, FSI organizations should focus on small progress, analyze what’s working, and gain a lens on their customers from their product specialists and salespeople. Deciphering the best methodologies for each organization takes time.

How does siloed information hinder business transformation?

As a lot of organizations have grown organically, their sales leaders and engineering teams often have grown in silos. The definition of a customer may be different between a consumer-lending team versus an investment-management team. FSI organizations need to understand that their customer is the same person regardless of which team is serving them. Connecting those dots is much harder than people think.

Why else do you think digital transformation is difficult for FSI organizations?

Investment dollars are precious. Digital transformation is one journey that FSI organizations need to make, but they also need to continue to evolve their product stack and their customer service. They must weigh their transformation investment against new innovations, products, and partnerships.

According to the previously mentioned Workday survey, 62% of FSI executives say “the pace of digital transformation has either slowed down from where it was a year ago,” or they expect it to slow down in the future. Why do you think that is, and how would you advise them?

The new way we work probably plays a role in the reported decrease in digital transformation. What workers accomplish together is different in an in-person environment versus a remote environment. Companies are trying to determine how to be productive in group settings while being remote. The economic environment, with the changes in interest rates, will also inform how we invest our dollars.

Overall, slow and steady wins the race. I love the agile methodology, with sprints and short-term, tangible goals. The agile methodology is one way FSI organizations can continue to keep their eye on the larger prize. Implementing the methodology can be challenging in a remote environment where projects aren’t as straightforward to accomplish. But don’t give up. Keep trying to innovate and use different methodologies to get where you ultimately want to go.

CIOs are playing a much more important role in transformational projects. Why is their involvement and buy-in so necessary?

CIOs play a critical role because they own the infrastructure. Organizations have made investments in multiple solutions in an effort to address various business needs. The diversity and complexities of financial services businesses will always require an integrated and optimized technology infrastructure to support the needs of the business. CIOs must ensure that all those components work together and meet their objectives. And the cost of ownership is important in technology. Partnering with CIOs, and helping them understand the strategy around the cloud and the interoperability among products, is a crucial component of successfully upgrading your infrastructure and moving it forward.

What are you hearing from your customers and others in the industry about what they care most about?

Workday financial services customers care about how they harness data, so they can add value faster and provide the right insights to customers and their organization. Forward-moving organizations want to offer consumers financial products and services in a more thoughtful, targeted, and customized way. Our customers understand that they need to evolve the roles of their finance and human resources (HR) professionals, so they can more effectively partner with each other across functions.

What future trends will most impact FSI organizations over the next few years?

The economy and its impact on spend and revenue generation will most impact FSI organizations. These impacts will inform how much innovation organizations implement versus how much stabilization they need. Digital trends will also impact FSI organizations—not just digital transformation but the encompassing digital age, which includes the game-changing technologies powered by artificial intelligence (AI) and machine learning (ML). FSI organizations will focus on digital engagement with customers. And they’ll have to maintain that focus while customer service remains paramount. If a customer needs to call, they’ll still want an agent, human or AI, that truly understands the services they need.

Workday announced an Industry Accelerator program for banking and capital markets and for insurance. How will Workday Industry Accelerators support FSI organizations on their transformation journeys?

First, Workday Industry Accelerators will help speed up FSI organizations’ move to the cloud. We’ll leverage our digital transformation practices, cloud migration tools, and global partner ecosystem to help our customers realize the value of transformation more quickly. Second, with the Industry Accelerators, FSI organizations can both decrease risk and increase business value. Our open, interoperable industry ecosystem will enable easy integrations, and our best-in-class solutions will deliver industry-specific capabilities at scale. And third, Workday’s open, unified cloud platform will allow financial services and insurance organizations to partner with Workday’s community of customers, so they can collaborate and innovate faster together.

To further clarify how the Industry Accelerator program will help our customers, I want to share what Pete Schlampp, chief marketing officer at Workday, had to say: 

“Cloud transformations can be complex for any organization, but it’s particularly challenging for those companies that have industry-specific needs. Workday, together with our Industry Accelerator partners, will bring industry-specific value from day one, while offering lower risk deployment. As a cloud finance and HR leader, Workday builds best-in-class applications that connect with other industry-specific clouds, so our customers can solve their most pressing business needs.”

This updated article was first published in September 2022.