Accelerating Digital Transformation: A Platform Approach
Digitization in banking and insurance was felt for a long time. But it took a pandemic situation to accelerate the transformation. When the whole world was made to stay indoors, financial institutions were open and getting ready for the transformation. Highlights of a web panel discussion:
Manoj: Please share any interesting aspect of digital transformation that you have seen.
Shallu: There was an upsurge of services provided digitally through chatbot and social media, Google Assist,etc. In addition, there was an upsurge of services provided online. Acquisition also saw major transformations. Customers welcomed complete contactless sourcing and they are ready for digital mode of transactions. The entire loan cycle can be digital now.
Ashok: Face-to-face businesses have now seamlessly moved to digital. Offering tools for the customersand enhancing theskills of users were 2 big challenges. In pre-covid times, validation from the customer about the commitment of the policy was typically through phone or agents. This has now moved to webbased platforms. And we get digital confirmation from the customers.
Byju: The customer experience had to be simplified, while productivity of the employees had to be improved. Most importantly, the partners have to also enable digital platforms. The pandemic has hastened the processes for all. A connected ecosystem and simplified platform makea huge difference.
Manoj: What were the major bottlenecks in digital transformation for bankers?
Dheepak: The core banking system has become restful. It has paid to build micro s e r v i c e s - based ar c hi t e c t ure rather than one big system. This way the transformations are visible to the customer.
Jitesh: The standard legacy software has too many branches. A slightest change in one pipe might affect many processes.Whatever the system may be,the skills of employers have to be upgraded. Identification of right solution, partner and vendor are critical aspects of digital transformation. Any solution should look ahead and not remain a stop gap arrangement.
Manoj: What are the key bottlenecks - the people or the technology?
Subroto: There are issues which are common to various firms. They are: (i) organizations are looking for one
omnichannel solution. Whether it is chatbot or AI or WhatsApp enabled, all must get consolidated. It is important to have a system which can bring together all the data from various channels and make it one system. (ii) Core banking is important for the banks. Keeping it intact and trying to develop on top of itwill take more resources. We are trying to build an aggregator layer which will
help to connect the microsystems and all the system of records. This will help in giving multiple systems of experiences to all categories. The question is how fast this transformation can take place.
Manoj: So many i ntegrations are happening i nside and outside the organizations. What are the practical solutions to speed up the transformation process?
Dheepak: There are a l wa y s peripheral and core IT solutions. Systems like core banking will need more stability than innovations. There are areas which have to be more agile.
Shallu: The core of the organization doesn’t change without planning. If the vendor is not able to provide newer features at a faster pace, then certain decisions will have to be taken.
Byju: A dangerous vacuum is being built as the talent pool is decreasing. The core system developers are retiring. So huge resources will have to be spent for the maintenance. After 5 years, the line between core and peripheral will go away. Also, it is a challenge to reskill the inhouse IT team.
Ashok: Beyond a point, the core cannot be pushed. It has its own tolerance limits and its own frameworks and rules. But sticking to it makes the transformation slower. Hence, at some point the core and peripheral have to be delinked to enhance customer experience.
Byju: The core system provides the business logic. It is not a portable model. Today, for faster solutions we are removing the logic portion out of the core.
Ashok: Today, we a r e u s i n g the services of technology partners and providing services. As I see, the transformation will make us a tech company offering products and services to the customer. Adoption of newer technology will happen at a faster pace.
Jitesh: Core banking is transaction recording platform. With the help of vendors, lot of customer experience innovations are happening. The inhouse team supports and helps in maintaining the systems. There is a large pool of talent ready to get associated with the BFSI and
provide services. We have to create an ecosystem for this progression.
Manoj: What are the solutions that Outsystems can give to banks or insurance providers, so that they can be more agile?
Subroto: Going forward, organizations driven by software are going to be the normal. The firms that have pushed their growth on IT have done well in the last couple of years. It is critical to adapt and adopt to technology. The customer acquisition level can be innovated further. One package product cannot meet all the needs. Products will have to be customized. Many firms want to push this process from the cloud native point. But the core system is a hindrance.
There are products to help out in this process. There are lot of firms which want to do customer onboarding through a new transformation partner. We have solutions for every part of the integration. A good and experienced enterprise level platform is required for the development. This has to be part of the enterprise architecture. Safety and agility of the micro systems are the key aspect one should be looking for. While purchasing a package, one has to remember not to be depended on the back-end. Then the customization becomes tough.
Manoj: What are the big decisions that will be hard to revoke?
Byju: We are ser vice product manufacturer. We will not be able to govern the customer experience. Going forward,
we might not own the customer journey.
Jitesh: Core systems are long-term and change cannot happen overnight. Lot of stakeholders are consulted along with the bank’s vision for the future. But plug and play systems can be altered as per the environment. The blocks have to be chosen now so that complete transformation happens seamlessly.
Dheepak: Without taking too much risk and sticking to the basic principles, bankers would like to continue to innovate.
Shallu: As we are dealing with the public money, we would like to work with core systems which are proven, workable and trusted. Risks can be taken with upper peripheral layers. When the core and the peripheral merges or the core becomes agile enough, then most of the firms will start adopting those platforms.
Manoj: How to take decisions so that there is a balance of long term and shortterm needs?
Subroto: What is the firm looking to give as customer experience and employee experience? And what the stakeholders are looking as value to the firm? The customer needs have driven the digital transformations. The use cases are large and varied in nature. We are always looking to better the customer experience. This can be achieved by overall optimization of the systems. Many new dimensions are emerging. The areas that firms want to digitize and transform will drive the change.