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How to Ensure That Digitization Initiatives Really Benefit Financial Firms

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Financial FirmsThe need for data entry services has grown worldwide due to the increasing demand for digitization of data. The volume of data businesses handle on a day-to-day basis is staggering and they need an efficient method to turn their data into usable information. This is true of the financial sector as well. Data describes the facts and figures that a company processes everyday and becomes information after it has been processed. It shows trends and patterns existing in the market and enables to analyze the data and make better decisions.

The Need for Digitization

In this present digital era, financial firms continue to receive and create abundant amounts of paper documents ranging from applications to advisory agreements, statements, transaction confirmation etc. All of these important documents need to be stored and managed in compliance with FINRA and SEC regulations. When it comes to management of files, there are costs involved such as storage, copy, labour and distribution. Some of the other resource depletions involved are:

  • The time employees waste searching for data. It is estimated that 80 percent of employees spend 30 minutes each day to find the required information.
  • 7.5 percent of documents are lost daily
  • The actual cost to reproduce each document is estimated at $220

Imagine the reproduction costs and lost productivity time (spent on searching for lost files) on an annual basis for a company with around 1,000 knowledge workers! Companies can become more efficient and reduce the costs involved with documentation by having in place a good digital document management solution. According to Laserfiche, firms can save eight percent on annual overhead costs, the equivalent of $342,000 for larger firms and increase efficiency, saving 6000 hours for larger firms.

Digitization Helps SME Finance

The increasing digitization of SME finance and the potential supply of alternative data it provides, offers an opportunity and solution to both the demand and supply side of the credit gap. By the year 2020, the world’s stock of digital data will double every two years. Rising mobile usage, cloud-based services, big data, electronic payments and exponential use of social media will drive this increase. Digitizing SME finance can lead to greater and better opportunities for banks as well as SMEs and this will be more apparent than in emerging markets. On the supply side, lower costs and rising use of smartphones are helping SMEs to produce transactions and accounting information in an affordable and timely fashion. New apps make financial management, customer management and supply/ value chain management tools affordable to small and medium firms. On the demand side, the new data plugs into advances in analytic and processing capabilities for the bankers, encouraging the spread of new data-driven intelligence for initial decision making and portfolio management.

New partnership between banks and Fintech allows banks a fast and convenient way to innovate their product offerings and better serve their SME customers. Banks can vastly improve their customer experience with lower capital expenditure. Fintechs also benefit from it as they gain access to the bank’s large customer base, and existing infrastructure. Digitizing SME’s finances holds great potential both SME and for SME lenders. At the Global SME Finance Forum 2017 taking place in Berlin, Germany in November 1-3, the various opportunities the digitization of SME finance offers and how banks, FinTechs, DFIs, credit bureaus, regulators and others can benefit from this revolution in finance.

Ensuring Digitization in the True Sense

Digitization is indeed the way to go for any business that aims to ensure optimum customer experience and improved bottom line. The important consideration here is to ensure that all digitization initiatives bring the desired results. An article in The Imaging Channel highlights certain steps financial firms should follow when it comes to digitization for optimum results.

  • Understand the present state: This means you need to understand the process and costs involved. Digital transformation is an easy process in theory but in the case of large firms, each section will have its own processes and issues. It may be challenging to track the costs involved. Use industry benchmarking where data is missing.
  • Identify the future state’s return on investment: If the future state aligns with corporate strategies and priorities, it shows that employees across the organization will benefit from this solution. Also, calculate the additional soft and hard benefits, such as revenue lift, risk mitigation, compliance environment and compare these benefits to the total investment such as IT cost, implementation and end user education.
  • Make sure to validate before you launch: Before executing make sure to test in order to assure that the solution will drive the planned improvements. Conduct small scale tests to determine that the project parameters and quality standards are met. Also check to see that documents are scanned successfully, image quality is good, and the images are in the correct order and rotation.

Looking beyond Customer Experience

DigitizationMost financial companies focused on digital transformation prioritize customer experience to effectively meet and exceed the increasing expectations of the present day digitally savvy customers. However, companies must understand the importance of prioritizing their core business processes as well. In a rapidly transforming business world, they must also think about delivering success to all parts of the organization network. Back office automation, for example, is vital to an organization’s long-lasting success and must be given due importance. For true digital transformation to take place, the entire organization must be brought under the digital parasol. You may have to reinvent your business processes and overhaul them to ensure simplicity, agility, and innovation throughout the organization. Only in this way can you build the foundation for growth into new products/services and maybe new and unique business models.

Customer experience is of course important, but financial services organizations must look beyond that and make sure that their organization enjoys an overall digital transformation that will simplify processes and deliver value and quality. This is where data becomes important. The financial sector must focus more on becoming data-centric, which is the prime requirement when it comes to enhancing each and every aspect of the organization.

  • Organizations must make sure that digital initiatives are not happening in isolation, and are well-connected with strategy. These initiatives must impact CEO-level metrics for the business.
  • When driving digital strategy and capability building, adopt a customer-oriented approach. Ensure that you take a cross-functional view of the digitization process, and highlight the need for transformative change over time.
  • Consumer financial firms often find they have to adapt their talent strategy and culture to attract superior, digital talent. It is important to acknowledge the culture divide – digital vs. traditional – but focus on establishing shared goals. Incentive structures can be designed to boost collaboration and shared Profit & Loss (P & L) responsibility. Also, a minimum bar of literacy can be established on business and technology at all levels via cross-training.
  • To keep up with new technologies and fintechs, provide training for a baseline understanding of new technological approaches at all levels. Disseminating “test and learn” approaches to mainstream business applications can help. Develop strict criteria and a robust framework for assessing and partnering with fintech firms.
  • Do not ignore the back office. Automate back office processes and ensure there is a person who is accountable for end-to-end digital capabilities.
  • View data as an important asset and keep it ready for use at any desired time. Your data strategy must link critical strategy questions to analytical decision making. Find ways in which you can combine transaction data with customer data in real time.

With increasing usage of smartphones and other devices, proper digitization of the financial sector is essential to catch up with the increasing expectation of the customers. With the help of data conversion services, all important data of financial firms can be converted into digital format accurately and opportunely. When all data is streamlined and managed, organized functioning becomes easier and constructive collaboration among all divisions is also facilitated. Easily accessible data will help enhance productivity and employee satisfaction and ensure excellent return on investment.

About MOS Team

MOS Team

Managed Outsource Solutions (MOS) is a leading BPO company committed to providing business process outsourcing solutions for a wide range of industries such as Medical, Legal, Information Technology and Online Media.