In today’s economy, a key business priority is the transformation of organizations to become digital. That is a radical transformation that places the customer front and center and builds value streams from that nucleus. Digital transformation is often referred to as the organizational and operational change through the smart integration of digital technologies, processes, and competencies across all levels and functions in a staged way. It is an intentional strategy that has one goal: to create customer value through the use of technologies by creating new services or dramatically improving existing ones.
The financial services industry is not one to be left behind in digital transformation. Financial institutions have what we’ve come to know as a standard set of services (loans, mortgages, etc.), but customers are demanding easier and better ways to access these services. As a result, competition is significant in the financial sector.
“What matters to most customers in 2019 is greater personalization, more automated services, and easier access to services. Institutions that can deliver all three will capture their share of the market. Key to not losing the battle is recognizing that customers are less concerned with brand familiarity than getting the services they want. Providing customers those services is key to client retention.” 1
In fact: “nearly all (97 percent) of financial services firms are making some sort of inroads on digital transformation” and “more than a fifth (21 percent) list developing a digital transformation strategy as their top digital priority”. BDO, Digital Transformation Survey, 2019 2
Moving through digital transformation requires a focus on a continuously evolving architecture. Decisions made today need to be related back to the overall business transformation plan. This plan is not just a technical architecture. It is an enterprise business initiative driving business strategy. Business strategy is then enabled by processes and applications. These applications, in turn, manage data and are part of the enterprise infrastructure. Every one of these layers is constantly evolving – and therein lies the challenge.
A common example organizations face is a legacy application; they need to evaluate whether they want to move to modernize it, integrate it, or upgrade it. It is a continuous evolution of architecture and systems rationalization toward an evolving end state.
Any digital evolution requires 3 key elements:
- A proven architecture framework to guide the strategy
- A systems rationalization strategy focused on key areas of business risk: privacy, security, and resiliency
- Automation that enables the business to move quickly while also balancing risk within the limits of an organizational risk threshold
Changes and shifts in the digital transformation plan must be driven by levels of customer behavior and expectations, new economic realities, industry disruptions, or the emergence of competitive solutions. The key to surviving these disruptions is to ensure that everyone in the organization is aligned and that most importantly privacy and security – key business risk vectors – are not left out of the discussion.
Thankfully, standards organizations like The Open Group are tackling this challenge. Click here to find out more.
1 https://technorely.com/financial-industry-challenges/
Interested to learn how one of the largest banks in the world sped up their secure product lifecycle with SD Elements by balancing automation and risk? Read more in this case study.