Swiss Post Solutions (SPS), an outsourcing provider for business process solutions and innovative services in document management, has released new research that shows the transition from physical communications and processes to digital is the number one priority for financial services leaders in the next year.
This may be driven by the fact that over half reported their ability to deliver a superior customer experience was hampered by issues integrating digital, online with physical, offline communications.
When asked what the top three priorities were for the next 12 months, cutting costs and supporting the transition to new working models took second and third position. The survey of over 200 leaders in the UK financial services sector suggests that the challenges they face are being driven by shifts in customer and employee behaviours and expectations, accelerating the shift in adopting digital channels.
However, it also points to the huge variety of concerns on leaders’ minds – from compliance and regulation to customer service, building operational resilience while also reducing property space. With three-quarters currently overseeing digital transformation programmes, 84% are investing in transformation of back-office operations to support these priorities.
Ranking of priorities for IT leaders in financial services
Transitioning physical communications and processes from physical to digital (49%)
Reducing costs (46%)
Supporting changing working models e.g. hybrid, remote (41%)
Meeting all compliance and regulatory requirements (39%)
Improving customer service (37%)
Building business and operational resilience (35%)
Streamlining processes (34%)
Reducing property space (19%)
Back-office transformation a priority for financial service providers
As ever, leaders continue to face budgetary constraints. Cost-cutting ranked second in their list of priorities for the next year. While four in five are including back-office transformation within the scope of their digital transformation programmes, 46% said that the biggest challenge to reducing costs is the concentration on front-end customer communications and not back-office operations.
Reflecting this, a third said their organisations are suffering from siloed IT systems and manual processing, with a lack of automation further compounding speed and service issues. For example, a quarter said that continued inefficient paper processing meant they were unable to meet cost-cutting priorities.
Gary Harrold, CEO of Swiss Post Solutions, UK & Ireland commented, “To deliver digital transformation priorities within tight budgets, transformation of back-office operations is key. Many are doing so but are struggling to juggle competing priorities. It has never been harder to answer the competing needs of the organisation while trying to cut costs. As such, it’s perhaps unsurprising that three-quarters are seeking to outsource digital transformation initiatives in the next year, bringing in expert partners who can help manage these competing priorities strategically and cost-effectively, with specialist insight and holistic understanding.”
Disconnected communications and poor use of data impacts customer service
Across the industry, financial service providers are keenly aware of threats to customer loyalty.
According to this latest research, the greatest threat comes from customers’ perception of poor service. As a result, over a third of respondents reported that they were focused on improving the customer experience in the next year.
When asked what the biggest challenge is to delivering a superior customer experience, the majority pointed to the integration of digital online with physical offline communications and processes. This aligns with their overall priority; connecting and transitioning physical communications and processes from the ‘physical to digital’.
The challenge of online/offline communication was followed closely by inter-related issues of collation, processing and effective analysis of customer data; over a third admit that they are delivering inferior services due to an inability to effectively analyse and use customer data. The same number report struggling to automate data collection and analysis, leaving much valuable unstructured data languishing as a result.
In addition, nearly 50% said that legacy systems impact the time it takes to process data. In fact, over a third said that slow manual processes are damaging customer relationships.
Ranking of challenges to delivering a superior customer experience
Integrating digital online with physical offline communications (50%)
Legacy systems increasing times for processing data (49%)
Processing increasing volumes of unstructured data (45%)
Utilising customer data effectively (37%)
Manual processes (requiring staff) increasing times for processing data (37%)
Harrold commented, “It’s clear that there is focus on integrating online and offline communications, and that leaders in this sector are prioritising digital processes to support this. Customer expectations in the wake of Covid have changed, and the drive to digital has accelerated as branch and in-person interactions diminish and digital communications increase.”
“However, it is important that in addressing communications issues, resulting data is not left languishing. Delivering superior customer experiences hinges on digital transformation solutions that allow providers to harness data effectively – no matter its type or origin. Essentially this all comes down to how providers transform core processes, which cannot be done piecemeal. It requires an encompassing strategy that joins the dots between data, back-office processes, customer service and employee expectations too. They are all intertwined.”
New working models demand employee expectations are met
The shift to remote and hybrid working models as a result of the pandemic is set to leave a lasting legacy. Support for remote and hybrid working models will remain a priority for leaders over the next 12 months. Four in ten report this sits within their top three priorities, including answering a need for remote access to data (49%), with a third saying this shift is hindered by a lack of processes for remote service delivery.
While remote working during the pandemic hindered digital transformation initiatives for nearly 40% in the sector, a quarter reported that it had no effect on their ability to deliver their digital transformation priorities.
Harrold reflected, “It’s fair to say that the pandemic has resulted in a marked shift in priorities. Ensuring employees can work remotely is as much about delivering great customer service as it is meeting employee expectations at a time when many are reassessing how, and who they work for. Successful transformation relies on digitising back-office processes and implementing systems that deliver information quickly, securely, in digital formats that are easily accessible and easily analysed. Holistic transformation of the back-office delivers on all fronts, to customers and employees alike.”