Financial services firms deal with certain issues and demands more than nearly any other industry. While these pressures come from a place of regulating and watchdogging for the public good, they can lead to struggles and anxieties when simply trying to conduct business.
Some of the most daunting difficulties the financial services industry faces includes:
Constantly changing demands Competitive pressures Large numbers of transactions Heavy audit requirements
Complying with these requirements while rising to meet the demands and competitive pressures often pushes financial services companies into a hodgepodge of home-grown or half-baked ‘solutions’ that can leave everyone involved feeling overwhelmed. After decades of trying to keep up with new demands, a typical firm’s solution stack may now include multiple sets of manual processes, databases, and spreadsheets for the same work – with no standardization or automation for thousands of repeatable tasks.
As digital transformation races forward for the financial services industry, it is no surprise that efficiency and productivity are the main focus. According to a recent Forrester Survey, 75% of financial services companies report ‘Increasing efficiency and productivity through technology’ as a driver for digital transformation, making it number one out of all survey responses.
From our experience helping financial services companies address efficiency and productivity demands through digital transformation, we’ve identified common struggles these companies face.
‘Big Bang’ transformations that blow up in a company’s face
The financial services world is full of many different business processes that ‘emerge’ as the need to meet a new demand or requirement arises. These processes are largely unplanned and gradually roll out over time, leading to the ‘hodgepodge’ of processes and solutions we spoke of earlier. One way many ambitious IT leaders seek to overcome this issue is to create a ‘Big Bang’ solution for everything.
A Big Bang solution seeks to blow up every process a company has in the hopes of starting from a more efficient square one. While a great idea in theory, this usually ends up being too big of a bang, resulting in a ‘big boom’ instead. The combination of employee pushback to new processes, too much simultaneous change, and the huge implementation costs involved often leads to months or years of wasted time as resources get spent trying to rebuild everything into something that often doesn’t work.
Projects this large are ’too big to fail’, so the problem evolves as more time and resources are poured in to address the fallout from the big boom.
New solutions don’t play well with old friends
Financial services companies operate in ‘non-homogenous’ environments, meaning that there are many different systems used for different processes. Some of these legacy systems are extremely outdated and exist in tight data siloes. This makes it exceptionally difficult for new systems to integrate and interoperate with them – often leading to situations where data sharing is next to impossible.
With new systems hamstrung by the inability to access the data they need, business functionality suffers, and the progress of digital transformation is delayed. In many of these situations we see business users sticking with obsolete platforms – even when newer more modern technology is available.
Over-dependence on IT
With this overwhelming mix of business processes scattered across different systems, it’s harder than it should be to fix problems. Because of this, and the high degree of process auditability required in this industry, financial service employees cannot fix many issues on their own, so they rely on IT, who is usually terribly busy.
The dependence on IT to fix and maintain a large mixture of legacy systems leads to a ‘you WILL wait’ reality when it comes to solving issues identified as pressing by corporate business users. IT is often simply overloaded with a long list of help desk tickets, maintenance issues, and highly prioritized customer-facing requirements. It’s easy for them to lose sight of solving important internal business problems, that matter to the bottom line, as they arrange their own overwhelmed lists and customer-facing priorities ahead of internal process improvement requests.
The three keys to building better financial services systems
When attempting to overcome the many pressures and demands put on their systems, financial services companies can focus on three key areas for success: autonomy, auditing, agility.
Auditing: In order to meet heavy audit pressures and regulations, incredibly high standards must be ensured for any new business process. This includes practices like permanent, unchangeable audit trails and detailed transaction histories.
Agility: The problem with many legacy financial service systems is their inability to quickly adapt to change. Successful systems need to support quick modifications and deliver adaptable and changeable processes – giving organizations the ability to both plan and react.
Autonomy: Applications should give business users the power they need to solve problems as they arise. This includes solving issues that they would have turned over to IT to solve in legacy systems.
HighGear offers the leaders of financial services organizations the technology they need to decentralize solving business problems without sacrificing auditing and security or placing an additional burden on IT. This puts power into the hands of the business user, giving them more autonomy and agility while still maintaining the highest standard of auditing.
Financial services companies use HighGear to create workflow related digital transformation solutions that overcome the pitfalls of legacy systems and build upon these three keys to success.
Moving from manual systems to automation for thousands of recurring tasks
A global investment management firm deployed HighGear across their entire organization. Before HighGear, they relied on spreadsheets, emails, and even post-it notes to capture data for thousands of recurring tasks including client reports, RFPs, regulatory processes, onboarding new clients, setting up new funds, internal audits, and other document and report generation tasks.
Using HighGear, they automated the processes around paydown from compliance-heavy investment funds. Reporting, auditing and regulatory compliance, and massive checklists were all automated to streamline this constantly changing process.
This automation enabled them to monitor, capture, and analyze all the data they needed for these engagements – drastically speeding up the process. They were also able to centralize client facing work under HighGear. Now, 80% of their workforce uses HighGear to manage their work and automate workflows.
Autonomy Unleashed: Streamlining a global investment operation
One of the world’s largest hedge fund managers employed HighGear’s no-code visual workflow designer to empower non-technical users to define their own business processes without IT involvement. They were able to get completely out of spreadsheets and optimize 1,500 daily repeatable tasks that were previously distributed amongst several legacy systems, including spreadsheets and email.
Initially, they focused on daily audits and reconciliation to quickly develop and deploy an effective solution. Then they streamlined their ability to prove compliance with internal operating procedures and complex financial industry regulations using HighGear’s non-repudiable audit trail.
In the end, they merged three separate lines of business into a single shared services team and consolidated three sets of processes, databases, and spreadsheets under one system. Non-IT staff within the business unit made all of these changes themselves.
To learn more about the impact HighGear had on streamlining their digital transformation, see our Case Study, ‘Streamlining Global Investment Operations with No-Code Workflow Automation’.