The State of Transformation in Financial Services
“To achieve business objectives, financial services firms will need to flex their organisational structures and develop new skills – building a better tech foundation will not suffice.” Forrester
For the past five years, the top driver of transformation in financial services has been customer experience. But a Forrester report on the state of transformation in financial services shows that in 2021, new imperatives prompted by the COVID-19 pandemic shifted organisations’ priorities. Now, improving operational efficiency is the number-one driver of transformation in the sector.
Forrester’s findings also show that it’s become abundantly clear to financial services firms that they need to adapt to the changed business landscape if they’re to survive and flourish. Some 34% of respondents to Forrester’s survey answered that an improved ability to innovate is another critical priority. These two key metrics are symptomatic of accelerated digital transformation across the financial industry as a whole.
Investing in tech for improved customer service
The reasons behind that acceleration are clear. When asked about their motivation for digital transformation, 40% of purchase influencers in financial services companies point to the pandemic as the main factor in its rising importance. Meanwhile, 35% of them agree that the need to invest in digital experience tech has also increased due to COVID-19.
Employees and customers alike have found themselves working and buying online to an unprecedented extent, so many companies were left with little choice but to invest in service-related tech simply to continue trading. Now that that has become the norm, however, Forrester suggests that priorities are being readjusted as companies once again think about the future instead of merely dealing with the present: security and privacy capabilities are a top priority for 35% of respondents.
“Financial firms have embraced end-to-end transformation, focusing more on operational levels in service of customers.” Forrester
Digital transformation hasn’t entirely diminished the importance of CX
Operational efficiency’s rise to be the number-one priority has not meant, however, that customer experience no longer matters. In fact, the number of respondents citing CX improvement as critical has not changed – it remains at 33%. But the financial sector has a much stronger focus on IT, data analysis and of course financial processes than other industries.
When asked “Which business processes are the focus of your firm’s digital transformation?”, just over half the respondents in the financial sector point to IT processes, and some 44% of them cite data and analytics. Responses to this question also illustrate the critical importance of customer retention in financial services, with 37% of respondents answering “Customer service/experience” compared to 34% in other industries who were posed the same question.