Impact of Digital Technologies on Diverse BFSI Functions
Arjun Chib, Managing Director, Standard Chartered Bank
Asia Business Outlook recently got a chance to interact with Arjun, wherein he shared his insights about the current financial services landscape the impact of technology on its overall functions. Below are the excerpts from the exclusive interview –
The current financial services landscape
The financial services landscape has undergone a thorough metamorphosis over the last decade. Technology advancements that are happening on a regular basis are enabling the industry to evolve at a much higher rate than ever before. Companies today are leveraging technology to significantly reduce the time-to-market of their products & services, thus acting as the primary enabler for business growth. In tandem with the tech advancements, customer preferences too have changed drastically in recent times. They now expect to have everything at the quickest timeframe possible, that too at their convenience. Digital technologies have been a true enabler inn this regard by fast-tracking the process enabling businesses to cater their customers as per their preference. With the advent of digitization, we now have new channels where almost all business functions can continue to operate without any hassles even during any crisis such as the Covid pandemic.
The nature of service also has transformed completely in recent times. Due to the emergence of various cutting-edge technologies, the quality of service that is being offered to customers today is way higher than what it used to be earlier. However, this requires the employees to be proficient with these new technologies and stay updated with the latest industry dynamics. This has forced organizations to invest lots of time and money on their employees’ skill development programs.
The nature of service also has transformed completely in recent times. Due to the emergence of various cutting-edge technologies, the quality of service that is being offered to customers today is way higher than what it used to be earlier.
Standardization and various other aspects related to it in an organization.
Firstly, the organization must have a clear vision and understanding of why they want to standardize the process. Also, having all the right stakeholders (process owners, impact players and risk owners) engaged in the standardization journey is very much necessary for the process to go as planned without any hassles. Lastly, putting-down the right metrics that show the outcome of the current process will play an important role in fine-tuning the organization’s processes in accordance to the set aspirations.
When you put down the as-is process and start designing the to-be, the human instinct is to solve each and every exception. While doing so, the process can potentially become very complicated and may not be able to get the right outcomes. Also, the technology that is being used must be kept up to date, failing which might result in catastrophic effects on the company’s growth and brand image among the customers. Thirdly, if one is trying to solve exceptions and technology on a continuous basis, there will always be a running cost associated with it. Thus, companies must make sure to pay attention to the cost aspect as well and take decisions that are well-balanced between cost-effectiveness and risk.
"Design thinking is a toll that helps us to take a step back and take a look at the entire process from a different viewpoint and focus primarily on the client needs."
The incorporation of technology into financial services firms’ offerings in order to enhance their use and delivery to customers
‘Complete Digital Offering’ is what customers mostly expect in the current market scenario. All BFSIs are trying to do this, and there are a few banks that are already offering it to their customers in various shapes and sizes. Almost the entire banking functions are completely digitized today since the sector has been one of the early adopters of digital technologies in terms of digital banking solutions. Not only BFSI, but companies from many other sectors too have tasted significant success in this process of ‘Complete Digital Offering’.
The advantages of a bank embedding its services in a business in other industries.
Just like any other companies, banks also must ensure that they attract new clients on a regular basis. Embedding its services into other industries opens-up new channels for the bank to add new clients in a very cost-effective manner. This approach is one of the most effective ways in which a BFSI can enhance its revenue generation and build cross-industry relationships. Thus, I feel that embedding financial services in business is an integral part of banking in today’s context to offer services on a larger magnitude.
The design thinking approach in terms of financial services
Design thinking is a toll that helps us to take a step back and take a look at the entire process from a different viewpoint and focus primarily on the client needs. There are three phases from a design thinking perspective – understanding consumer preference & current market dynamics, explore products/solutions that solve customers’ pain points, and rolling-out the MVP into the market to test it and get customers’ feedback. Since the sole purpose of companies developing solutions is to solve client problems, it is paramount for every organization to have an efficient customer feedback system in place. This not only helps the company to cater to every client demand, but also enables it to understand the present customer dynamics and accordingly tweak their business strategies.