It’s that time of year when predictions on what will be the biggest trends for the New Year start rolling in. In the spirit of the holiday season, leading analyst
firm Ovum has revealed a new study that forecasts what’s in store for the
financial markets in 2014.
According to the analyst house’s
latest research, 2014 “will be a year of foundational investment for the financial markets, with the primary focus on investment in IT infrastructure.”
As the report highlights, profitability is now much more difficult to come by
since the financial crisis, and it goes without saying that as times are
tighter organisations need to ensure that they are spending their financial
resources on the right technology. But as market conditions, regulations and
customer expectations are constantly evolving, financial organisations are
under increasing pressure to invest in technology that enhances existing IT
systems, whilst allowing them to keep up with market changes. Unfortunately investments in infrastructure often get wasted on technology that is difficult to implement and can’t be leveraged across different systems of the organisation. Moreover organisations
often opt for off-the shelf solutions that address a specific problem, such as complying with a new regulation, but don’t provide the needed flexibility required to achieve long term compliance. This creates a myriad of operational siloes within the organisation
which adds to the complexity of IT infrastructure and hampers productivity and innovation.
At a time when customers are becoming more demanding and their loyalty is waning, having outdated, fragmented and slow to change IT systems can put banks in a very unfavourable position. To remain competitive, financial organisations need agile solutions
that can allow them to quickly adapt to market changes, new regulations and customer requirements as they go along.
The old ‘rip and renew’ approach is not sustainable here as replacing existing IT
applications with new IT systems would be extremely costly, high risk, time consuming and technically complex. Furthermore it would have a huge impact on the end user, disrupting day-to-day business and making it impossible to quickly introduce changes across
Much more effective is the legacy ‘wrap and renew’ approach that focuses on
leveraging existing ICT assets and modernising the access to legacy systems, as
opposed to replacing them with new ones.
Recent advances in BPM technology, for instance, can help financial organisations
achieve more flexibility by providing an agile layer of applications to wrap
around what the organisations already have and connect legacy systems to create a virtual single platform. In-built collaboration between Business and IT will help build new processes very quickly using graphical tools and common
metaphors that capture business requirements directly into the software – no
more lengthy requirements documents! Processes can be designed that align to
customer journeys with built-in intelligence that allows the same process to
dynamically change some aspects of its flow based on the channel of
communication used by the customer. This means the same business logic is
applied whether a customer comes into the branch, contacts the call centre or
uses web-based self-service from his device of choice. By removing the
operational siloes that hinder productivity, financial organisations will be
able to improve work efficiency. Moreover, as such BPM software can be easily
modified to adapt to new changes, it provides unrivalled flexibility to enable
financial service providers to keep up with upcoming compliance requirements
and business changes. This will enable business managers to control the IT
process, whilst driving business change and service improvement from the top. Some of the World’s largest brands are investing in such technologies to improve
customer satisfaction, reduce operational costs and increase sales.