Choosing the right partner to operate in a new world of IT orientated service management
Every financial institution is going through a transformation journey of some kind – the only difference is that there are good, bad and, sometimes downright ugly examples of the approaches being taken when it comes to digital transformation. Digital transformation, when done well, delivers benefits across the board for financial institutions, as the IDC InfoBrief New service models to accelerate innovation in banking outlines, institutions that had invested in transformation prior to 2020 experienced improvements in metrics around efficiency, time to market, customer satisfaction, and profits — even during the crisis.
The winners in this space are those who consider the process as an enterprise-wide challenge rather than a customer experience initiative or technical revolution. Any company that sets up a transformation office has already taken a step in the wrong direction. Digital transformation requires the whole corporation to buy into a wholesale change.
Organizations sometimes make the mistake of just dealing with a problem at the surface where customers interact with technology, but digital transformation is a legacy technology challenge. If financial services companies don’t address this, they’re storing up problems for a later date.
Transformation needs to start from the back and move to the front. It’s important to consider the challenge from an outcome-based perspective. For instance, rather than thinking about transforming an existing payments process, instead the focus should be on making it easier for a customer to achieve something, for example, creating a better, simpler experience for them as they transact.
At Finastra we consider transformation as a succession of steps rather than a big bang. The days of a financial services organization buying a license and a software vendor turning up, implementing it and then leaving them to operate it, are over in the new world of service-oriented IT management. Finastra works in close harmony with customers, as partners over multiple years, to ensure that we know exactly where they are on the journey, how quickly they can absorb change and what the right next step is for them to take.
We facilitate the journey with our Customer Transformation Model that is broken down into five steps: stabilize, simplify, standardize, streamline and service. To facilitate that sequence of steps, at the outset of any engagement, we go through a diagnostic process of understanding exactly where a client is on their own transformation journey. At each stage of the process, we leverage our IP and accelerators to maximize the return on their software investment, through an improved technology landscape.
Choosing the right service partner to help on this journey is critical. Industry analyst IDC1 identifies the following four key criteria that can help financial institutions choose a partner.
First, do they know the industry? Financial service providers want to work with partners that have credible expertise and understand the unique requirements of that industry.
Second, do they know your institution? The provider needs to show an understanding of what makes an institution unique. The approach must be holistic and bespoke to your institution.
Third, can they address your specific problems and opportunities? Partners must have industry- and workload-specific capabilities that augment or fully provide solutions that open the path to transformation. They should not only implement technology, but tie transformation to business value.
Fourth, where have they done this before? Any services partner needs to demonstrate previous successes in helping institutions evolve into digital leaders, particularly in demonstrating where it has added business value in previous engagements.
I would add a fifth: do they have their own tried and tested product? Financial institutions are used to working with the major global system integrators (GSIs) when it comes to technology deployment. However, GSIs don't have a direct link to the financial software that we have with our product teams. Through our interlock with product development, we have a strong understanding of how our software behaves under different conditions and how it can best meet evolving business needs, allowing us to leverage our solution-specific IP to enable customers to accelerate innovation.
There is no one-size-fits-all approach to transformation. With some of the more digitally-mature institutions using the Finastra Customer Transformation Model (CTM), we might be a cog that fits into a well-oiled machine, whereas some other firms might need us to take a more prescriptive approach. Irrespective of your maturity we would work to develop a detailed roadmap for moving forward, the Finastra CTM offers compelling service tailored to each stage of maturity.
I won’t pull my punches though, digital transformation is not a cheap exercise nor is it for the faint hearted, but it's very much worth it in the end, as one executive at an $85 billion US bank said to IDC: “There is no area of the bank that would be ‘off the table’ to leverage these services.” When an organization embraces the journey holistically, front-to-back, with the right service partner, they reap the rewards"
To learn more about how financial services organizations around the world are using new service models to accelerate innovation in banking, download this IDC report sponsored by Finastra.
1 IDC InfoBrief: New service models to accelerate innovation in banking: Delivering value through software-led managed services and orchestrated, IP-led services
Get in touch
We are here to help your business reach its goals