As we approach the year 2018, the financial sector is continuing to head toward a new landscape. This landscape looks innovative, digital and technology plays a large role.
New technology has shifted priorities of this industry. Businesses are using digital tools more than ever, changing customer engagement as we know it. As these new tools are integrated into business operations, teams are met with new regulations to combat the new landscape.
“During the last ten years, new finance technology has shifted to the cloud. Revenue recognition, financial reporting, tax and global regulations have evolved dramatically.”Daily Fnancial Executives reports.
Regulation in the Finance Industry has transformed IT portfolios. Regulatory-driven spend on data sourcing, reporting, calculation engines, risk systems and surveillance technology is ballooning while business innovation and efficiency projects often struggle for sponsorship.
This is in the context of highly complex and costly processing environments that have evolved over many years. What strategies are available to IT harness this change and position the firm better to succeed in a transformed business environment. The challenges that the financial sector can face with these regulations can affect the overall functions of the bank and how business is carried out.
Aligning The Organization To The New Reality
Implementing a new reality to your organization can be tricky, especially if you do not want to disrupt your organization. In order to successfully accomplish this task, your organization will need to have a strong management system, and transparent goals.
The new reality consists of omnichannel strategies, which is an innovative way of conducting business. Since the customer landscape is shifting toward more on the go and digital, banks must meet the needs of their audience. The trick is, to get every piece of the operation on board in order to be effective with strategies.
Digital journeys are constantly evolving. Because of this, banks must have a strong strategy. Operating models must shift, such as changes in IT structures. Since the digital era is bringing more technology into the workplace, IT departments must be strong and equipped to protect against theft, in order to secure valuable data.
Driving A Strategic Agenda
While banks carry out a strategic digital plan, it is also important to follow all up and coming regulations. Strategically rebuilding business models to fit the digital platforms must be done, but falling short on regulations cannot occur.
According to KPMG, a few regulations emerged from the digital era. Fintech, reg tech, artificial intelligence, and robotics are among the trends that have dominated the finance industry and have also disrupted regulations. Many of these technologies have been a cornerstone of the modern financial services sector, reducing cost and driving digital transformation forward. Robotics is just one prime example of how digital transformation has taken over the industry, and it is continuing to quickly develop.
Along with other digital trends, mobile banking has made a huge impact on customer engagement relationships.
KPMG outlined the challenges that banks meet while embracing technology:
- Embracing the technology to drive down costs, improve analysis to enable better decision making and improve accuracy
- Evolving operating models, policy and processes to take account of the automation of previously manual processes. This will require regulatory, compliance and risk managers to enhance their understanding of the new technologies and the developing business models.
In order to effectively combat these challenges, banks must follow a strategic model with clear, transparent goals in mind.
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