Accelerating digital transformation for financial services companies with a unified observability platform

Digital transformation for financial services companies can be difficult. A unified platform approach to observability and security enables financial services firms to deliver seamless customer experiences by resolving issues before they affect users.

Geopolitical and economic uncertainty increases business risks while consumer expectations continue to climb. Banking customers now expect digital experiences on par with those delivered by leading e-commerce and technology companies, and emerging financial technology (fintech) companies are racing to provide these kinds of experiences. So are established competitors, which are investing in platform plays to boost market share.

While accelerating digital transformation for financial services is becoming increasingly important, they’re also compelled to do more with less—to launch sustainability initiatives, comply with more stringently enforced regulations, and mitigate cybersecurity risks. Yet resources remain scarce. An inability to hire and retain talent is motivating financial services leaders to consider automation.

Expanding customer value while reducing costs

Further, the retail financial services landscape is increasingly competitive. Consumers can now open an online account with a new bank in mere seconds or get a loan approved within minutes, and there’s little incentive to stay loyal to legacy institutions that can’t provide the flawless digital experiences that have become table stakes in this industry.

A recent report indicated that more than half of mobile banking users would be likely to switch banks  if another institution offered additional features in its mobile app. Winning the loyalty of these increasingly fickle customers requires the right investments—in personalization, customer service, developing innovative products, and bringing them to market faster.

Given current economic uncertainties, financial services firms must follow strategies that maximize their chances of growing revenue while reducing costs. Doing so will require increasing customer lifetime value (CLV) by expanding existing customers’ wallet share while optimizing efficiencies to reduce waste.

To sustain, many institutions are acquiring smaller entities and consolidating them into a unified portfolio. This is not without risks: it requires integrating infrastructure without adding complexity or permeating silos. Success demands rapid consolidation of revenue streams without disrupting operations or customer experiences.

Banks and financial services companies must find and follow a technology strategy that will empower them to do the following:

• build customer trust and loyalty by delivering exceptional experiences;
• accelerate digital transformation to optimize efficiencies and innovate; and
• consolidate revenue streams and grow through mergers and acquisitions.

And they must achieve this without disrupting the business, increasing costs or risks, adding to technology sprawl, or multiplying complexity and inefficiency.

At first blush, this might seem impossible. In the companion ebook to this article, we explore how harnessing the right technological capabilities can make what was previously unimaginable into a reality—so that banks and financial firms can improve customer experience and drive newfound efficiency—to positively affect business performance by increasing their customers’ loyalty and trust.

Building trust through exceptional customer experience

Today’s customers demand digital experiences such as highly personalized online experiences.   The better an organization’s digital product and service offerings are, the more likely customers are to stay with that bank, lender, insurer, or wealth management firm for the long term.  Over the course of a lifetime relationship, this can mean thousands or hundreds of thousands of dollars’ worth of opportunities that would otherwise be lost. Simply put, the more successful a financial institution is at earning trust and loyalty, the higher its revenues will be—and the greater its profitability.

Emerging fintechs now target some of the most profitable areas of financial services, making it imperative for established firms to elevate their technology strategies to keep pace and accelerate digital transformation. These upstarts appeal to digital natives, but their goal is to siphon customers from traditional financial institutions. Both consumer- and commercially oriented financial firms will need to prepare to keep up with rapid change if they want to be leaders in their industry.

Accelerating digital transformation for financial services to optimize efficiencies

As customer expectations increase, banks and financial firms face challenges to deliver ever-more-innovative services without compromising quality or increasing costs. In the current economic climate, this imperative is an urgent one.  To achieve this, creating efficiencies will be key, and technological efficiencies are especially important.

Innovation today requires some degree of cloud transformation. Because they have long been reliant on mainframes and can’t do away with their on-premises infrastructures, most banks and financial firms must adopt a hybrid strategy. This approach is inherently more complex than relying on the cloud alone. And it demands technical expertise that’s in short supply.

Implementing time- and labor-saving innovation is necessary to overcome these challenges. Automation, for instance, can empower lean teams to achieve more, while enabling the business to avoid productivity losses and IT labor costs.

Financial services firms that want to optimize efficiencies and reduce costs without compromising their ability to innovate will need to do the following:

• Modernize and optimize critical business processes;
• gain real-time visibility and insights into operations;
• adopt DevSecOps practices while leveraging automation and AI to boost efficiencies;
• reduce the amount of time it takes to realize value by choosing the right technologies; and
• simplify operations by consolidating tools.

Accelerating digital transformation for financial services with a unified observability platform

Digital transformation involves unifying heterogeneous entities—systems, people, and applications—to create a single, coherent ecosystem. A recent global survey of chief information officers (CIOs) in financial services firms indicated that processing a single transaction involves an average of some 35 different technologies. And 77% of the CIOs said that their IT environment changes every minute, while 72% said that the explosion of data collected within cloud-native technology stacks is beyond human ability to manage.

With such dynamic environments, technology leaders in financial services companies need advanced capabilities to help them manage complexity. They also need near-real-time insight so that they can address issues as they arise. A unified platform approach —one that combines broad and deep visibility, continuous runtime application security, and the most advanced AIOps capabilities—makes it possible for financial services firms to resolve issues before they affect end users, significantly increasingly flawless interactions. This protects and preserves customer satisfaction and, thus, trust.