Digitization in the financial services sector
Entwicklung digitaler Strategien, Services und Produkte für Finanz-Dienstleister:innen
Development of digital strategies, services and products for financial service providers
The financial services industry is facing numerous challenges today. In addition to progress through technological advancement, digitized business processes and changing customer behavior are leading to completely new competitors for banks and insurance companies.
To remain competitive, financial services providers must develop strategies to adapt to constantly changing market conditions and increasing customer demands. We support you with entrepreneurial as well as technical know-how so that you can hold your own in this dynamic, digital transformation.
Challenges for Financial Services in a Globalized World
The financial services sector encompasses a wide range of institutions that provide services to individuals, businesses and governments. These include banks, insurance companies, payment service providers and many others. The sector faces a number of challenges that affect its future and its ability to meet the needs of customers and the globalized society. More specifically, our customers face the challenge of proactively addressing the volatility of digital assets, the growing risk of digital financial crime, and ever-changing regulation.
Digitalization and technological innovations
The rapid development of new technologies such as artificial intelligence (AI), blockchain and Big Data has fundamentally changed the financial services sector. End-customers also expect faster and simpler services, as well as a seamless transition between different channels and platforms.
Digitization also enables agile FinTech startups to enter the industry and compete with traditional companies.1 Fintechs use digital technologies to improve traditional financial services or offer innovative solutions. Mobile payment applications such as PayPal or Apple Pay are one example. Companies from the financial services sector must adapt their offerings accordingly and expand digital channels. In doing so, they are faced with the permanent challenge of meeting regulatory requirements while cooperating with innovative new market players and pushing their own developments.
Cybersecurity and data protection
As digitization increases, so does the risk of cyberattacks and data breaches. The location-independent availability of banking is both a blessing and a vulnerability. Financial crime causes considerable financial damage and weakens customer confidence in the companies affected.2
Financial institutions must maintain complex IT infrastructures that span many different systems and platforms. They manage extremely sensitive personal information and are bound by complex regulatory requirements. Translated to digital operations, this means that data protection and secure access to digital assets will always take precedence over the attractive-looking idea of making extensive use of data to formulate offers.
Regulation and compliance
In the financial services environment, operational and compliance structures are designed to ensure that every step can be tracked retrospectively, employees are intensively trained to act in compliance, watertight four-eye workflows are established, and anyone who tries to sail past this regulatory regime with a startup is usually caught quite quickly. Trust in the service is very important, so it is not uncommon to rely on functioning, established processes for longer than is usual elsewhere before new processes can be established.
Financial services companies are under constant scrutiny from regulators. It requires significant resources to comply with increasingly complex and frequently changing regulations. To meet the demands, financial companies need a comprehensive compliance program that establishes a clear strategy, effective controls and regular monitoring.3
This includes the implementation of automated systems and processes that enable compliance to be monitored and documented efficiently and effectively. In addition, employees must be continuously trained and sensitized to cooperate with regulatory authorities.
1 Digital transformation - opportunities and risks for the financial sector | Deutsche Bundesbank
2 BKA - List page for press releases 2020 - Cybercrime in Germany continues to rise
3 Compliance is likely to undergo a radical change in the financial services sector (pwc.ch)
In addition to all the challenges, digitalization offers the financial industry numerous opportunities to become more efficient and customer-focused. With the help of technologies such as artificial intelligence, blockchain and cloud computing, companies in the industry can optimize their processes and expand their offerings.
The use of artificial intelligence in the financial industry
Artificial intelligence (AI) can be used, for example, to identify patterns in large amounts of data and make predictions. This can help reduce the number of self-generated false positives or generate more valid data on which to base forecasts. By processing Big Data, such as analyzing customer data, banks have the ability to create personalized offers and better understand customer behavior or make risk assessments. The trend among banks or even insurance companies is clearly moving toward personalized offers at the earliest possible stage.
Automated processes
Robotic Process Automation (RPA) makes it possible to automate repetitive and manual processes in the financial industry. As a result, work processes can be made faster and more error-free, saving time and costs. Customer inquiries can also be answered automatically with the help of chatbots. Robo-advisors are automated investment platforms that make investment decisions based on algorithms.
These offerings take place in the area of conflict between the obligation to provide advice and automation, supplement traditional investment advice or independent purchase decisions, and are establishing themselves at a time when the topic of sustainability is another decisive factor beginning to influence the investment environment. These platforms are more cost-efficient than traditional investment advice and also offer retail investors access to professional investment strategies.
Especially in the investment sector, customers need to be served who have conflicting interests: some whose curiosity is inhibited by ignorance and others who want to challenge their vast knowledge. Both customer groups are highly attractive and must be picked up separately via one and the same channel.
In the area of banking offers, this is something you encounter again and again: the same website is visited by people with completely opposite interests, from very different needs, resulting from life or asset phases, and a cleverly chosen software helps to refine the customer approach even before the decisive login.
Cloud Solutions
Our customers are in the cloud or on their way to it. Cloud computing enables financial companies to store and process their data securely and efficiently. This allows processes to run faster and improves the scalability of applications. The cloud also offers the possibility of accessing external applications and services, which strengthens the innovative power of the financial industry.
diva-e has been working for partners in the financial services sector for around two decades and has actually provided all services from the entire value chain of an agency. Starting with the development of corporate designs through various models of consulting, service, go-live, editorial support, content management as well as in-depth backend and frontend development.
We have managed dozens of relaunches during this time, provided development teams, all agile services, tracking evaluations, advertising, newsletter design, SEO, accessibility consulting as well as tech consulting. We have developed native and hybrid apps, but have spent most of our time on website design and the establishment and customizing of content management systems in conjunction with the various services of different DXP.
Here, especially in the area before the login, is our home. We specialized in multi-tenant constructs that play out their component sets even across legal entities. News constructs that can take data and deliver it in all directions. Efficient CM systems that enable editors to dynamically and adaptively output different content and the freest possible design forms.
We have conducted large CMS evaluations and have implemented bank websites with at least half a dozen different CMSs.
To successfully meet all the challenges, financial service providers need to invest in technology and innovation, adapt their business models and focus on the needs of their customers.
diva-e is a partner that is fast yet reliable. Our results are service-oriented, we work hard to minimize the necessary additional work of non-involved groups, and we maintain a core of experienced and curious financial service experts who are excited about new partnerships.
With diva-e, you position yourself as an innovative digital player. We know the insurance and financial industry and understand the underlying needs of the stakeholders. Our experts create digital solutions for you that are perfectly tailored to your company and your portfolio. Contact us now!
