Connect with us

Business

What financial services firms need to know about digital transformation

Source: Finance Derivative

By Winnie Palmer, EMEA Head of Marketing, Seismic

The financial services (FS) industry has undergone a tremendous amount of change over the last two decades. Technology has accelerated product and service innovation, yet the spread that traditional lenders and money managers can command has been going down – putting a considerable amount of pressure on revenues.

What’s more, clients are increasingly demanding highly personalised experiences at a similar standard to what they are used to from digital-first firms like Amazon and Netflix, while new channels such as social media are becoming increasingly important.

FS firms have responded to these market shifts with increased investments into digital products and systems, accelerating their digital transformation journey. Ironically, this is causing a new challenge in organisations’ ability to deliver meaningful client experiences as the amount of digital content explodes. It is simply harder than ever for clients to sieve through the vast amount of competing information. That said, clients are indeed looking for content on digital channels of their choice, with two out of three buyers now preferring remote interactions and digital self-service at all stages of the buying cycle. This begs the question how can FS firms ensure that their content will cut through the clutter and resonate with each client’s individual needs?

The good news is that technology continues to offer greater capabilities for FS firms. For example, the ability to analyse patterns, personalise recommendations and disseminate intelligence is greater than ever before. The most successful FS firms are using these technologies to increase their operational efficiency and advisors’ effectiveness to deliver superior client experiences. So, when we consider the future of the FS industry, how must firms adapt as competition increases and client expectations continue to evolve?

Building for success

Establishing a culture of continuous learning and development is critical to the long-term success of any digital transformation project. This can help FS firms truly differentiate themselves and their advisors from the competition, enabling their client-facing teams to replicate the organisation’s star players and enhance their level of performance.

Firms should focus on making coaching and training readily available through cwhenever and wherever they are needed. By delivering timely, data-informed recommendations and insights, these platforms can enable financial advisors and money managers to improve their learning speed and knowledge retention. This in-the-moment coaching provides them with the ammo they need to craft and deliver content that truly delights and engages clients.

For example, training programmes delivered through interactive lessons embedded with practice sessions and playbooks that are based on what’s proven to have driven impact in past client scenarios – all tailored to the specific advisor – can help FS teams deliver more engaging and impactful experiences. Leveraging granular performance data, digital platforms can provide insights and recommendations to guide advisers on what to say, do, and show clients at certain stages of the sales cycle. As well as ensuring more effective interactions, this dynamic approach to skill development means advisors can spend more time engaging with clients as they continuously learn and develop.

This is all key to building long-term relationships in today’s FS market. By establishing a culture that focuses on continuous learning powered by intelligent and data-informed training and coaching platforms delivered at the moment of need, FS firms can be confident that their advisors are equipped with the most relevant skills and knowledge – no matter where they are in their career.

Driving operational efficiency at scale

Modernising and optimising data processes through automation is another vital cog in the digital transformation machine. The strict regulatory nature of the FS sector means that compliance risks are a key concern. Leveraging technology can enable FS firms to systematically ensure governance and compliance both company-wide and at an individual level – all while reducing costs and increasing their advisors’ productivity.

Centralising these data processes supports FS teams when working with a wide range of assets such as quarterly reports, fact sheets and meeting reviews. Advisors can quickly modify any information based on materials dynamically served from a single source of truth whenever it’s needed without impacting compliance in order to accelerate the approvals process. Integrating these systems across sales, content training and CRM tools will further improve the user experience, ultimately helping financial advisors be more productive and focused on revenue-driving activities.

These technology platforms can also provide key data insights using AI capabilities to help identify behaviours, patterns, and new revenue opportunities from large data sets that would be impossible to analyse manually, thereby driving further impact, faster.

For example, FS firms can leverage these insights to improve the effectiveness of each piece of content they share with clients. Using the data collected from previous interactions, sellers can gain visibility into what has worked, what needs improving, and where clients have engaged with content the most. Armed with these engagement insights from specific scenarios, firms will have a better understanding of the most impactful content, along with when and how it should be delivered. Also, by linking content investment directly to sales performance, organisations can be more intelligent in identifying cost saving opportunities while maximising effectiveness.

Superior client experiences

As financial advisors engage more with the younger generation of tech savvy clients, they need to be able to communicate and interact with these clients in the way they desire, delivering more personal experiences and dynamic interactions. In today’s competitive FS marketplace, this is key to meeting the expectations and needs of the modern client.

This is where content engagement data has a vital role to play. Knowledge of exactly how, when and where customers are interacting with pieces of content allows FS professionals to provide a more agile and responsive experience. It lets them tailor each interaction – whether through e-mail, digital sales rooms, social media, or in-person meetings – to the individual.

The key data insights and recommendations that powerful cloud-based platforms provide allow advisors to build meaningful relationships, even in digital and remote environments. Being able to build trust with clients by demonstrating that they understand their unique needs and situation will help advisors engage more effectively and put them ahead of the competition.

Establishing these trusted relationships with younger generations will be invaluable over the years to come as they inherit wealth from their parents and build their own. In what has become a digital marketplace, FS firms must help their teams engage prospective clients with the right content, at the right time, in the right channels – all in a compliant manner. This can only be achieved by tapping into data insights and technologies that enable hyper-personalisation consistently at scale.

This three-pronged approach that focuses on continuous learning, enhanced operations and powerful client experiences must be at the core of any FS firms’ digital transformation strategy. This is what will enable truly holistic transformations, unlocking new revenue generating opportunities and giving firms the tools to succeed in today’s complex and competitive FS environment.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Innovation in banking must go hand in hand with security, and here’s why

Dean Clark, Group Chief Technology Officer for GFT

The banking sector is transforming more and more, with banks under pressure to meet customers’ evolving expectations. This means that even the most traditional institutions have to move away from legacy systems and adopt modern technologies such as cloud computing and AI. The aim of this shift is not just to keep pace with digital-native competitors, but also to improve operational efficiency and deliver better customer experiences.

However, innovation brings new challenges. Transitioning from centralised mainframes to cloud-based platforms is a complex process that can’t happen overnight. Amid this transformation, banks must ensure that security remains a top priority. Striking the right balance between modernisation and robust security is essential to building and maintaining consumer trust in the digital age.

Balancing agility with security

Multicloud is a key component of digital transformation strategies in the financial sector. Many banks are relying on hybrid multicloud to modernise and keep up with the evolving tech landscape. In the meantime, new digital banks are launching entirely on cloud-native platforms, which helps support agility and scalability from day one.

Cloud technologies offer many advantages, including improved performance, flexibility and faster innovation. However, despite these benefits, they do come with security challenges. Cloud infrastructure, often built and managed using Infrastructure as Code (IaC), can include some vulnerabilities and give an entry point into a bank’s system to malicious actors. As such, ensuring that IaC adheres to best practices is essential to avoid misconfigurations or exploitable vulnerabilities as early as possible.

The protection of consumer data must also be central to any digital transformation strategy. Security must be deeply embedded not only in backend infrastructure but also in the user-facing layers such as web portals and mobile applications. This is critical to maintain consumer trust and improve retention.

Why a unified security platform is essential

When undergoing digital transformation, financial institutions need a unified security solution to help streamline the security management process by having all the necessary tools in one place. In fact, a unified security solution is built on three interconnected pillars. First, security must be embedded directly into development pipelines. This integration helps identify and mitigate risks and misconfigurations early, before they can impact production. Second, through continuous monitoring and management of cloud assets, banks can gain more visibility and control over their security posture. Third, runtime protection safeguards cloud workloads, web applications and APIs through tools like cloud threat detection, host security, container security, serverless security, and web application & API protection. Together, these pillars help to establish a robust security framework. This way, digital banks can minimise risks, streamline operations and ensure compliance with regulatory demands.

The benefits of ‘zero trust’

Modern cloud-native banks rely on ‘zero trust’ security models more and more. ‘Zero trust’ refers to the principle according to which every request to access an organisation’s system should be carefully reviewed. This means that no user or system is trusted by default. They’re all subject to identification and authentication checks. This helps set clear boundaries between the applications the users are accessing and the resources available in the cloud. And even after access has been granted, all activity is monitored on an ongoing basis to identify potential malicious behaviour that could compromise digital banking systems. This continuous verification enhances visibility into potential threats and facilitates compliance with regulatory standards.

To further reinforce security, mutual transport layer security (TLS) can be implemented as a core design principle, enabling secure authentication with third-party entities over the internet. By adopting such measures, digital banks can build a resilient security foundation that safeguards against evolving threats whilst preserving customer trust and operational integrity.

The example of Salt Bank

Salt Bank is a next-generation digital bank launched in Romania. It serves as a good example of a financial institution that embedded security into its digital banking platform from the start. Salt Bank was built and launched in under 12 months, showcasing the power of an approach to innovation that heavily relies on security.

Salt Bank implemented a range of advanced security measures, including zero trust architecture, threat modelling, cloud security posture management, and automated security operations, guided by this security-by-design philosophy. These tools helped the bank implement a strong defence against cyber threats whilst still focusing on improving customer experience.

Central to Salt Bank’s strategy was Engine by Starling, a SaaS platform designed specifically for digital banking, paired with Palo Alto Networks’ Prisma Cloud. Prisma Cloud played a key role in securing the bank’s cloud infrastructure, offering capabilities such as misconfiguration monitoring, risk detection, remediation and compliance management. Together, these technologies provide a unified and efficient approach to managing security in a complex cloud environment.

The future of modern banking is all about security

As digital transformation accelerates across the financial sector, companies must keep security at the top of their agenda. Whilst innovating is key to keeping up with evolving trends and changing customer expectations, it can’t be done without prioritising security. If security isn’t embedded in every layer of an organisation’s digital infrastructure, vulnerabilities may be introduced within the system and easily exploited by malicious actors. And once cyber attackers are in the system, everyone knows it can lead to chaos.

But security isn’t just for defensive purposes, it’s also a strategic advantage. In a climate of growing digital distrust, the most secure bank doesn’t just win compliance, it also wins customers. By choosing to turn advanced security into a visible product feature, not just an internal practice, banks can build marketable trust and differentiate from fintech challengers who may cut corners in pursuit of speed.

Continue Reading

Business

Why heat pumps are the future of heating and cooling

Drew Tozer

We live in a technologically advanced world with artificial intelligence, electric cars, and advancing space travel.

But our primary strategy for heating homes is still “burning stuff”.

We pump gas, propane, or oil into a traditional furnace and light the fuel on fire to keep houses warm. It’s an archaic solution—like sending a fax instead of an email.

Furnaces are popular because the majority of HVAC is replaced in emergency “no heat” situations. The default option becomes a like-for-like replacement (swapping an old furnace for a new furnace) because it’s quick and easy.

HVAC is a top 5 most expensive purchase that a homeowner will make in their lifetime, and we rush the decision by ignoring equipment until it breaks.

Choosing the right HVAC system is an opportunity to improve homes. HVAC is the biggest factor for indoor comfort and air quality, and the chance to pick the right system only comes around every 15 to 20 years.

Heat pumps operate like two-way air conditioners. In the winter, they take heat (energy) from the outside air and use it to heat homes.

So, what makes heat pumps the right decision?

Because electric products are just… better

Consumer experiences matter, and electric products create better experiences. The quality of electric appliances (like heat pumps, electric vehicles, induction cooking, and electric yard tools) surpassed gas alternatives in recent years.

For now, there continues to be a place for gas appliances in niche situations. But the overwhelming consensus is that electric products are better than gas products

A few examples:

  1. Oversized furnaces are the primary cause of comfort issues. Heat pumps are the direct solution—they can be properly sized to match the heating and cooling needs of a house, improving comfort and eliminating hot and cold rooms.
  2. EVs are more fun to drive, while being quicker, quieter, more convenient, and lower maintenance. The stress of “range anxiety” has largely disappeared with better infrastructure and battery performance.
  3. Electric yard tools are quieter, safer, and lower maintenance than gas tools.
  4. Gas stoves increase the risk of asthma in children. Induction is safer and healthier while offering similar control and faster boiling times.

The performance gap of electric over gas is growing. Every generation of electric products takes a leap forward while gas appliances stay largely the same.

Over the last decade, gas furnaces have increased from 90% to 97% efficiency. That’s the only change.

By comparison, cold climate heat pumps achieve efficiency ratings above 300% by moving heat instead of burning fuel to create heat. Heat pumps continue to improve, both in efficiency, reliability, and cold weather performance. They’re a proven success in cold climates like Canada, Sweden, Denmark, and Norway.

Heat pumps can also be sized to provide the right amount of heating and cooling at any given time, and the lack of combustion eliminates the risk of carbon monoxide poisoning, gas leaks, and explosions.

A sustainable world is an electric world

The cost of ignoring climate change continues to grow.

There’s no way around it. Ignoring climate change won’t solve it.

The frequency and severity of wildfires in North America are a key example. Large parts of the US are becoming uninsurable as the damage risk becomes untenable for banks and insurance companies.

These aren’t political choices, it’s the free market working: climate change is bad for business.

When we choose to not take action, it increases pain and suffering without decreasing the economic burden. We’ll have to implement the same solutions, but we’ll have to pay more to rebuild and replace more infrastructure and homes along the way.

Delaying action is the more expensive choice.

Heat pumps are part of the solution because they create a path to sustainable heating. They can be powered by renewables, either on-site or within grids.

We have access to the cheapest source of electricity in human history: solar. We choose not to embrace and scale renewables for political reasons. It’s a people problem, not a technical one.

We’re fortunate that the sustainable option (heat pumps) is also the choice that improves the comfort, health, and safety of homes.

Energy (in)dependence matters

Heat pumps and renewables allow homeowners and countries to heat and power their homes with local energy. It makes homes and communities resilient against geopolitics and global energy costs.

A house can be entirely energy independent by combining a heat pump and electric appliances with rooftop solar and battery storage.

Conversely, you can’t extract and refine oil in your backyard. If you rely on combustion heating, then you’re dependent on the person or country that supplies your oil and gas. A situation that played out with Europe’s reliance on Russian gas.

In the tenuous landscape of global politics, energy dependence is a risk.

Heat pumps are the future of heating and cooling because they create a path to sustainable heating powered by renewables. They create comfortable, healthy, sustainable homes that benefit from energy independence and improve consumer experiences.

Continue Reading

Business

What can the West learn from the Arabian Gulf’s payments revolution?

Hassan Zebdeh, Financial Crime Advisor at Eastnets

A decade ago, paying for coffee at a small café in Riyadh meant fumbling with cash – or, at best, handing over a plastic card. Today, locals casually wave smartphones over terminals, instantly settling the bill, splitting it among friends, and even transferring money abroad before their drink cools.

This seemingly trivial scene illustrates a profound truth: while the West debates incremental upgrades to ageing payment systems, the Arabian Gulf has leapfrogged straight into the future. As of late 2024, Saudi Arabia achieved a remarkable 98% adoption rate for contactless payments in face-to-face transactions, a significant leap from just 4% in 2017.

Align financial transformation with a bold national vision

One milestone that exemplifies the Gulf’s approach is Saudi Arabia’s launch of its first Swift Service Bureau. While not the first SSB worldwide, its presence in the Kingdom underscores a broader theme: rather than rely on piecemeal upgrades to older infrastructure, Saudi Arabia chose a proven yet modern route, aligned to Vision 2030, to unify international payment standards, enhance security, and reduce operational overhead.

And it matters, because in a region heavily reliant on expatriate workers whose steady stream of remittances powers whole economies. The stakes for frictionless cross-border transactions are unusually high. Rather than tinkering around the edges of an ageing system, Saudi Arabia opted for a bold and coherent solution, deliberately aligning national pride and purpose with practical financial innovation. It’s a reminder that infrastructure, at its best, doesn’t merely enable transactions; it reshapes how people imagine the future.

Make regulation a launchpad, not a bottleneck

Regulation often carries the reputation of an overprotective parent – necessary, perhaps, but tiresome, cautious to a fault, and prone to slowing progress rather than enabling it. It’s the bureaucratic equivalent of wrapping every new idea in bubble wrap and paperwork. Yet Bahrain has managed something rare: flipping the narrative entirely. Instead of acting solely as gatekeepers, Bahraini regulators decided to become collaborators. Their fintech sandbox isn’t merely a regulatory innovation; it’s psychological brilliance, transforming a potentially adversarial relationship into a partnership

Within this curated environment, fintech firms have launched practical experiments with striking results. Take Tarabut Gateway, which pioneered open banking APIs, reshaping how banks and customers interact. Rain, a cryptocurrency exchange, tested compliance frameworks safely, quickly becoming one of the Gulf’s trusted crypto players. Elsewhere, startups trialled AI-driven identity verification and seamless cross-border payments, all under the watchful yet adaptive guidance of Bahraini regulators. Successes were rapidly scaled; failures offered immediate lessons, free from damaging legal fallout. Bahrain proves regulation, thoughtfully applied, can genuinely empower innovation rather than restrict it.

Prioritise cross-border interoperability and unified standards

Cross-border payments have long been a maddening puzzle – expensive, sluggish, and unpredictably complicated. Most Western banks seem resigned to this reality, treating the spaghetti-like mess of correspondent banking relationships as a necessary evil. Yet Gulf states looked at this same complexity and saw not just inconvenience, but opportunity. Instead of battling against the tide, they cleverly redirected it, embracing standards like ISO 20022, which neatly streamline data exchange and slash friction from global transactions.

Examples abound: Saudi Arabia’s adoption of ISO 20022 through its Swift Service Bureau will notably accelerated cross-border transactions and improve transparency. The UAE and Saudi Arabia also jointly piloted Project Aber, a digital currency initiative that significantly reduced settlement times for interbank payments. Similarly, Bahrain’s collaboration with fintechs has simplified previously burdensome remittance processes, reducing both cost and complexity.

Target digital ecosystems for financial inclusion

One of the most intriguing elements of the Gulf’s payments transformation is the speed and enthusiasm with which consumers embraced new technologies. In Bahrain, mobile wallet payments surged by 196% in 2021, contributing to a nearly 50% year-over-year increase in digital payment volumes. Similarly, Saudi Arabia experienced a near tripling of mobile payment volumes in the same year, with mobile transactions accounting for 35% of all payments. 

The West, by contrast, still struggles with financial inclusion. In the U.S., millions remain unbanked or underbanked, held back by distrust, geographic isolation, and high fees. Digital solutions exist, but widespread adoption has lagged, partly because major institutions view inclusion as a long-term aspiration rather than an immediate priority. The Gulf shows that when digital tools are made integral to daily life, rather than optional extras, the barriers to financial inclusion quickly dissolve.

The road ahead

As the Gulf region continues to refine its payment systems experimenting with digital currencies, advanced data protection laws, and AI-driven compliance the ripple effects will be felt far beyond the GCC. Western players can treat these developments as an external threat or as a chance to rejuvenate their own approaches.

Ultimately, if you want a glimpse of where financial services may be headed towards integrated platforms, real-time international transactions, and widespread digital inclusion – the Gulf experience is a prime example of what’s possible. The question is whether other markets will step up, follow suit, and even surpass these achievements. With global financial landscapes evolving at record speed, hesitation carries its own risks. The Arabian Gulf has shown that bold bets can pay off; perhaps that’s the most enduring lesson for the West.

Continue Reading

Copyright © 2021 Futures Parity.