The next decade’s world of Sustainable Finance function: achieving higher levels of effectiveness. Reasons to look forward to the future.
“Finance is not merely about making money. It’s about achieving our deep goals and protecting the fruits of our labor. It’s about stewardship and, therefore, about achieving a good society.” – Robert J. Shiller, Economist
As we move deeper into 2021, we see the industries taking on the challenge to recalibrate for resiliency within our modern business environment. Though the future of financial services is far from clear, there have been many recent cases of harnessing technology and human ingenuity to help make the changes work.
Security-first system for COVID-19 test results in the blockchain.
The survey by Appdynamics highlights that 66% of IT professionals say the pandemic has exposed weaknesses in their digital strategy, driving an urgent need to push through initiatives that were once a part of multi-year digital transformation programs.
According to McKinsey, financial services’ high-fliers are exploring new efficiency opportunities, reaching beyond the traditional financial activities, then focusing on data and information (attributed through data visualization, advanced-analytics, and debiasing strategies, etc.) that flow as pillars for integrated, simplified and controlled decisions. And finally, finance organizations tend to revisit the operating model and are bringing about new skills and capabilities.
→ Read more To change or to pretend a change – that is the question
The first stage of finance transformation enables digital channels for financial products and services exchange. Right now, we are experiencing the next step which optimizes customer support with self-service opportunities, as well as business ecosystem development driven by the API economy. Currently, a shift from the project-based to a product-driven mindset is becoming a key element of digital transformation within the financial services sector. So, a financial services firm, be it a bank or investment broker or insurance provider, is expected to become a high performance microservices organization offering tangible advisory services about money through an all-inclusive approach.
Leveraging Digital Transformation in the Financial Services Sector
Moving towards finance transformation is about employing the key dimensions of digital: from finance process transformation to a business model revisit to domain evolvement to a cultural transformation.

Business processes transformation is focused around specific areas of the business. By fast adoption of technology capabilities like data analytics, BI tools, API, machine learning techniques, etc., it can help reinvent numerous processes across the financial organization, commercialize on new ideas, and create additional real value pretty fast. Mobile banking, such as a switch from boring office desktop tables to intuitive solutions with customer-centric design and elements of gamification, is a vivid example of process transformation in the banking customer experience.
Business model transformation implies the re-architecture and evolvement of business logic essentials with a focus on the value delivered. That’s its strategy: gaining a competitive advantage through fundamental changes of the core business axis. As an example, on-demand or micro insurance has added value to the core insurance products. Or by moving from a monolithic architecture, banks are becoming microservices organizations offering flexible services 24/7.
Domain transformation can be vividly observed with the initial IT industry giants, like Google or Amazon, by closing finance customer expectation gaps with technology enablement. Take GooglePay and Apple Pay’s digital wallet platforms and online payment systems, or AWS (Amazon Web Services) who is one of the most trusted cloud infrastructure and services provider for banking, payments, capital markets, and insurance.
Cultural or organizational transformation is the most obvious, yet the most complex layer of transformational initiatives. While moving towards agile workflows, decentralized decision-making, and altering business ecosystems, it is all about changing human mindsets, both simultaneously from the beginning and as a result of the digital transformation process. Yet, Experian, the consumer and business credit provider, moved to become a technology company by demonstrating the potency of digital through small successful digital projects, promoting agility and innovation skills, and gradually changing the organizational culture mindset towards a company-wide one.
The most difficult and important opportunity for financial services providers is to recognize the transformation opportunities afforded by new technologies, be it financial services portfolio broadening or legacy systems transition to a new software or radical architecture refinements across the whole financial organization, and to understand that they can be captured even by traditional incumbents. So with a robust strategy in place to embody 4 interdependent attributes that are backed up by tech components, there are some clear digital transformation advantages for the financial industry.
How Technology Maps out Finance Needs to Deliver Value in Practice
Journey to the Cloud Financial Services
Cloud migration is admittedly the hottest and the most promising trend of digital transformation, and this is particularly visible in finance. Though cloud adoption rates are slower than anticipated, financial service players are looking into cloud technology solutions (i.e., applications, data centers, APIs and storage) and Cloud deployment models (public, private or hybrid) for the promise of gaining a competitive advantage and long-term benefits via flexibility, speed, scalability, security, enhanced analytics and a reduced carbon footprint. The global pandemic situation became a proof trigger for not only leveraging the cloud for upscale, speed and agility, but for down-scaling as well.

Investment in Cloud Solutions as part of the digital transformation by Financial services providers (Forrester)
Cloud computing (SaaS/PaaS/IaaS/BaaS/DaaS…. XaaS) offer some clear benefits for secure, compliant and connected financial services delivery, be it banking or capital markets, asset or wealth management, or insurance. Skillfully implemented cloud solutions are winning financial businesses over by synchronizing the organization to build resilient operations, taking away the complexity and costs of legacy IT infrastructures and software, allowing for the introduction of unique types of services, enabling extreme flexibility, giving them control over their data with democratized data collection, and also on-demand global connectivity. Moreover, as the cloud is becoming a standard for ERP and CRM applications, the financial service processes are becoming exceptionally streamlined and allow for advanced Business Intelligence (BI) on top of those. One more benefit of cloud adoption that is becoming a real value to humanity is that the cloud is about sustainable business practices. Cloud infrastructures support environmental protection utilizing virtual services rather than physical products and hardware. Also, they cut down on paper waste, improve energy efficiency, and (by allowing employee access from anywhere) reduce commuter-related emissions.
Business Intelligence in Finance in the 2020s: A path to value
Data to power up Financial Business

Data represents the biggest opportunity for financial services. Though data itself is not the goal for the BFSI industry, it’s an instrument to support panoptic strategies so that the created products and services match customer expectations. Apart from being a pure numbers game, embracing digital by the financial industry means shorter and efficient financial cycles, data-based business intelligence and forecasting, real-time operational and analytical insights, self-service analytics and informed visualization, and a whole lot more.
Data is power, which is a hidden advantage that financial incumbents have over digital native disruptors. What is an ultimate success imperative today for both is a tailored data management strategy employing technology as a tool to collect, mine, and process big structured and unstructured data, and further visualize it in a transparent and ethical way to actually generate value. All the new tech applied, either building advanced software and applications, the proliferation of APIs, leveraging AI and analytics, creating IoT solutions or enhancing customer experiences, are about working on massive complex Lego-resembling data to uncover meaningful insights.
As Cognizant reports, within the research, data and analytics are the key triggers of revenue growth and costs optimization. About 64% of surveyed businesses and technology leaders claim that they’re getting a moderate or high ROI related to data management.
AI to support Financial Decision-Making
Artificial Intelligence (AI) is widely adopted across financial services and has already transformed some aspects of the financial services delivery. AI can streamline, optimize processes, actualize data-based intelligence, eliminate human errors which contribute to accurate strategic forecasts and market analytics, actual customer sentiment analysis which is critical for business continuity and resiliency.
The growing need of finance organizations for enhanced interoperability and operational efficiency within new working environments pushed for AI-enabled smart workspace management powered by technology.
90% of new enterprise apps will include AI technology into their processes and products by 2025 (IDC).
The most vivid cases of AI and Machine Learning (ML) application within financial services are financial risk management, fraud prediction, transparent underwriting, personalized banking and financial management (PFM) advisory, informed unbiased credit decisions, smart quantitation, algorithmic or high frequency trading, data-enabled investment, and claims management with so much more coming.
Artificial Intelligence & Machine Learning in Finance: the Whys, the Hows and the Use Cases
Increasing role of Automation in Finance Function
Digital transformation strategies, implemented by means of AI and machine learning (ML), are primarily a source of advanced analytics for fact-based decisions, but also a huge enabler for financial service companies in terms of automation. In the world of 24/7 accessible online opportunities, growing customer expectations, surging competition and a pandemic-induced crisis, financial service companies seek to rely on data, augmented analytics and automated solutions or platforms. Experts claim that 80% of industry leaders either use or plan to implement an automation subset – RPA (robotic process automation) recognizing an enterprise-level opportunity for finance functions. According to SSON Analytics, banking and insurance top the list of RPA adoption leaders.
Automation, advancing into IPA (intelligent process automation) is gaining more traction within the improved customer experience, streamlining processes, freeing up staff and creating new value opportunities on top of optimizing back office costs. Starting from automated virtual assistants that respond to basic consumer inquiries, to robust integrated digital ecosystems enabled by open banking, to cloud-based ERPs, to touchless transactions backed up by DLT and blockchain, to mature automation cases in financial planning and audit, to automated trading systems (ATS) and to capital allocation using machine learning technologies.
Investment in Security, Data Privacy and Risk Assessment
Customer experience is stated to be a priority and key digital transformation strategy for the financial services domain. So, in the world of cybercrime, data breaches, and advanced hacker attacks, a significant investment is being plunged into consumer protection, data privacy, security, and compliance solutions. A modern consumer is not ready to tolerate unauthorized data sharing, unconsented emails, etc. Those are becoming unique value offers of digital financial services providers of every caliber, from FinTech startups and technology providers, to finance incumbents associated with financial stability.
Essentially, Data is good. It’s the use cases that can be problematic.
Regulations like the EU’s GDPR, PSD2 and MiFID I/II and similar supervisory requirements are putting an extra focus on risk management practices, aiming for a more secure and transparent financial sector. This calls for a thorough data analysis across all the processes enabled by big data analytics, AI and DLTs. These technologies have proved to be real working instruments in identifying operational and cyber risks, monitoring risks and improving fraud detection in peer-to-peer operations, measuring financial market risks and volatility, improving client risk profiling, minimizing credit reporting and scoring bias, etc.
There is more here: Artificial Intelligence & Machine Learning in Finance: the Whys, the Hows and the Use Cases
Digital Transformation is about People after all
As technology is on a mission to facilitate humans, it can not function without them. It’s clear that tech proliferation tunes up talent experiences. With digital transformation being pushed by COVID-19, the entire business operating model shifted. Finance staffing models are also evolving with a key search focus on data scientists, business analysts and technical literacy which support core job requirements to form cross-functional teams. As financial services adopt a digital working environment, which suggests flexibility, collaboration and support, agile practices spread across the whole organization from everything to attracting and retaining talented customer-oriented staff to delivering differentiated financial service levels. But it requires more than additional skills to build a strong technology ecosystem within a financial organization, but rather shared values and a commitment to the co-development attitude. By augmenting professionals with tech capabilities and investing in automation along with leveraging tools like self-service BI, digital assistants, and predictive modeling, financial service companies better use their time on value-added activities that drive actual business performance.
The Financial Services Industry is taking on the challenge to recalibrate financial functions for resiliency. Though the future of financial services is far from clear, there have been many recent cases of mobilizing technology and human ingenuity to help make the change work. Download our whitepaper showcasing the most critical factors impacting finance transformation and the opportunities of the digital financial services. Some assume that the sector will transform through tech gradually, while others believe that traditional finance is dead. The reality lies somewhere in the middle. Technology is past just disrupting finance organizations, but rather uniquely positioned to support the digital transformation.

Finally, Sustainable Finance. Doing better together.
Digital transformation is a huge and multifaceted evolution. It’s far from merely abolishing dated systems, building a banking mobile app, or digitizing an analogue paper archive. Digital transformation is a long strategic process, at times arduous but clearly seen to deliver lasting change. Staying on the right side of change means a clear vision of how technology can support business resilience within new business ecosystems and partnerships.
Though the challenges of regulatory pressures and geo-political tensions, evolving customer expectations, legacy systems modernization, workforce enablement, competitive environments of rising cost pressures, cybersecurity issues and data privacy concerns are present for every financial services company. Whether an incumbent bank, asset manager or FinTech startup, questions remain and the pandemic-hit world sees technology as one of the drivers of value for business. As allegedly said by Winston Churchill, ‘Never let a good crisis go to waste’. Our current situation keeps causing a huge impact on finance organizations but it also opens up a field of breakthrough opportunities to create a more sustainable future.
By scaling digital transformation ambitions, the financial service industry, like no other (except maybe Pharma & Life Sciences), can help make real changes and deliver 360-degree value to all. Technology application within a new inclusive economic context makes it possible for finance teams and financial service providers to accelerate time-to-value along with gearing up operational efficiencies and customer engagement, the ability to scale, so that market shares and even shareholder values increase.
As a digital technology partner and enabler, Avenga can navigate and support you through every stage of your digital journey, so that you are prepared for future challenges and can turn them into opportunities. We can help you adopt agile approaches to bridge your strategic initiatives, develop a product-centric mindset, leverage DevOps practices for on-demand continuous service delivery, make sense of your data capital, and support your innovation.