Transforming financial services through the open data revolution

November 30, 2023

The recent speech by the King reaffirmed we could be approaching a change in UK law with the potential to completely transform our lives and accelerate economic growth. The government has committed to enabling the implementation of revolutionary new technologies via the Data Protection and Digital Information (DPDI) Bill.

The final objective is to reach ‘open data’, where all types of information, whether it be personal financial data or employment details can be shared securely within a trusted platform. Users will have the ability to verify their identity online with the same assurance as with traditional documents. With the accelerated development of digital, more products and services are being purchased and consumed online.

If people can select and securely share their data with trusted groups, it will enable them to instantly receive new offers customised to their requirements and situations.

The Department for Science, Innovation and Technology has estimated that the bill will strengthen the UK economy by £4.7 billion in the next decade. Open finance could deliver a future where your devices can enable you to make smarter decisions in every part of your financial life, from budgeting to retirement planning. This could revolutionise financial literacy and instantly offer people a comprehensive understanding of their finances. This would be critical at a time when many people are experiencing financial challenges with the cost of living and a decline in household incomes. 

Smaller companies also face barriers to obtaining a clear concept of their finances, which impacts their planning, budgeting and forecasting.

Open financing takes centre stage

Open finance can become a priority in the UK’s movement towards open data. Financial services consist of a large portion of most people’s and businesses’ data footprints. It’s inconceivable to achieve a modern, digitally driven connected economy without focusing on financial datasets.

Fortunately, the UK has a globally recognised fintech industry with the ability to respond quickly, deliver new products and collaborate with larger, more established organisations. 

Nikhil Rathi, the CEO of the Financial Conduct Authority, detailed the opportunities a digital identity offers for customers. The Government is using the success of open banking as the initial step towards creating a smarter data economy. We are also witnessing progress within open finance and how to apply open-banking data-sharing within finance is a priority on the industry agenda. 

CFIT has delivered an industry-wide coalition on supporting open finance, allowing for the secure sharing of all types of financial data. By next year, a series of recommendations for industry and government will be released.

If delivered correctly, open finance will provide customers with greater control of their financial lives and stronger access to financial support and affordable credit products. SMEs will benefit from fewer barriers to accessing banking services. Open banking has shown us the path, now the open finance revolution is the next step to enable all datasets, so the UK can become a competitive, smart data nation.

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How AI is transforming the finance industry

November 15, 2023

The Institute of Analytics (IoA) has a strong interest in AI and is committed to this market. While AI offers multiple benefits, it’s critical to appreciate the risks that emerge from unregulated technologies. AI has gained rising interest in the finance industry, transforming multiple parts of the industry. This movement has been supported by new data, including various datasets and online textual information. As businesses integrate hybrid cloud solutions and strengthen their computer skill sets, they are more capable of maintaining high performance at scale, creating a competitive advantage.

AI empowers financial organisations to make data-focused decisions, securing valuable insights and strengthening overall performance. AI provides diverse opportunities within finance, incorporating fraud detection, enhancing the customer experience and the automation of policy enforcement.

It’s critical to highlight that while data is a fundamental element of AI, it can also act as a customer of AI. Not all data is appropriate for model training, and some companies lack the sample size required to test their tools. AI can support data creation, supporting further growth and contributing towards developing more structured AI algorithms.

To explore real examples of AI in finance, we can observe JP Morgan as a good example. The leading bank has publicly prioritised an AI-first approach and underwent various business transformations to break down legacy silos and deliver horizontal data consolidation and collaboration systems. Back in 2021, after volatile retail stock markets, traders observed the impact of retail activity on various stocks. As a consequence, JP Morgan explored a structured approach to monitor social discussions for determining short squeezes and implementing timely risk mitigation measures. This example highlights the need to implement a proactive leading indicator with strong predictive options rather than depending on retrospective factors. By exploring historical data and combining the concepts of influence, the JPM team created a leading risk mitigation algorithm model.

Activities with multiple search processes can take time, with considerable variation in completion time depending on employee efficiency. Businesses like JP Morgan used auto-responsive models to constantly monitor business processes, and determine the task at hand.

The availability of big data relevant to business use cases has opened up various opportunities for AI within the finance industry. For example, asset management benefits from using historical information and emotional analysis to determine certain market trends and investment opportunities. Alternative data types like customer behaviours strengthen the ability of algorithms to identify vital data points and support critical investment decisions.

As new technologies advance, there is a risk of disruption while regulators try to maintain pace. While AI offers various benefits to the financial industry, it’s critical to prioritise implementation safely and ethically. Focusing on the necessary measures will enable the necessary foundations to ensure consistent ethical use of AI in the future. Regarding financial customer and investor protection, AI services in finance can create or intensify other risks. Applying algorithms in financial decision-making can lead to biases, causing risk to customers and investors.

Policymakers should explore the implications of these technologies and recognise both the benefits and risks associated with implementing AI. By focusing on creating regulatory frameworks, policymakers can provide customer protection and the ethical application of AI in the financial industry.

More recently, the European Parliament introduced the Artificial Intelligence Act, a major move towards integrating structured rules for AI technology. The act divides AI into four risk levels, and AI applications involving vulnerable groups would face stricter conditions. The introduction of the AI Act highlights policy recognition of the need to regulate AI technology. The act aims to create clear rules to control risk and safeguard customer investor interest, but with accelerated developments in AI, policymakers face a growing challenge in maintaining pace with the changes.

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Top trends in digital finance over the next decade

November 8, 2023

The financial market is rapidly progressing and has been supported by digital innovation, societal changes and customer expectations. As we look to the future, there are several trends in digital finance emerging that could reshape the industry over the next decade. What could the future of digital finance look like?

Emerging Central Bank Digital Currencies (CBDCs)

CBDCs have enabled customers to have accounts directly connected with central banks, reducing the dependence on traditional intermediaries. Other benefits include a more seamless and cost-effective process for cross-border payments and for central banks to strengthen their ability to introduce supportive monetary policies.

The rising challenge of data privacy and cyber security

While digitalisation has brought many advantages to finance, it inevitably will create challenges, specifically the rise of persistent and sophisticated cyber threats. As cyber-attacks become more regular, stricter standards will protect personal data and financial assets. Creating resilience, and trust, and ensuring customers’ data is secure will be critical.

The progression of big tech and fintech

Technology and finance are becoming progressively more intertwined, providing continuous opportunities for innovation and disruption. Fintechs provide new solutions, and Big Tech businesses are exploring financial services on a deeper level, competing against conventional banking businesses. The progression of data analytics and AI has enabled the delivery of tailored financial services. Furthermore, big tech and fintechs have enabled access for previously inaccessible groups, strengthening financial accessibility for many.

The rise of mobile and digital payment options is inevitable, with a growing demand for contactless options. The demand for contactless payments and digital wallets is rising. With the increase of digital wallets globally, there may be a need for a worldwide protocol for seamless global transactions.

How open banking is transforming the sharing and access of financial data

Open banking has empowered the consumer, giving people more control over their finances and enabling control over who can access it and for what purpose. With greater access to data, financial institutions can deliver more tailored and innovative products for customers. Open banking provides a stronger collaboration between traditional banks, fintechs and other associated providers, creating further innovation across the board.

Open banking isn’t just a trend, it’s a significant shift in how we recognise and determine financial data. It’s predominantly about giving power to the customers, accelerating innovation and supporting collaboration in the industry.

Sustainability and Integrating ESG in Digital Finance

Digital finance must consider the implications of ESG becoming a global priority. Green Finance Platforms, for example, that incorporate sustainable investment and ESG-associated portfolios, will likely rise in popularity. Progression in tech will enable real-time reporting and measuring sustainability measures within financial operations, strengthening stakeholder transparency. Digital financial solutions will be critical in securing resources required to tackle global challenges, like climate change.

The next few years in digital finance will involve considerable transformation, from the disruption of cybersecurity to the increase of open banking and sustainability-related services. As the industry evolves, all stakeholders must be prepared and willing to adapt and innovate to maintain pace with the future.

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Tech businesses increasingly dependant on finance professionals

November 3, 2023

According to an industry report from automated finance business Ledge, finance professionals at technology businesses are often encouraged to increase their headcount to manage the rising workload on finance operations.

The new data highlights that as an organisation matures, the finance team grows 3.5 times, which is approximately 20% faster than all other areas of business within a company. Ledge’s findings indicate that tech companies are becoming more reliant on skilled finance professionals to manually manage complex and high-volume finance operations despite an unprecedented shortage of accountancy talent. 

The number of CPA candidates currently sits at its lowest since studies began, and 87% of businesses have stated that they are finding it increasingly difficult to recruit the necessary talent. 

The increased adoption of digital payments has supported the traditional payment infrastructure with various new methods to pay and receive payments, and transaction volumes have increased considerably as a result. Studies from PwC suggest a 42% increase in global cashless payment volumes and is expected to rise further by over 80% by 2025, increasing from 1 trillion to 1.9 trillion transactions.

The shift in the payments market has generated various challenges for finance teams at rapidly scaling businesses, who depend on spreadsheets and manual activities to manage considerable volumes of payment data that often is dispersed across disconnected systems. Around 40% of finance teams’ time is spent processing transactions, and 48% of finance teams highlight that fragmented data is the biggest barrier to them closing their books. 

Many leading enterprises still lack the necessary automated tools they need. Ledge’s study suggests that finance teams have grown 20% faster than other areas of the business, reflecting this pressure and the increased complexity and workload on tech businesses to assign additional talent to finance operations to enable the business to continue.

Tal Kirschenbaum, CEO and co-founder at Ledge explains that while the digital payments area has witnessed significant innovation, the majority of finance systems and processes have changed over the years. Finance professionals still rely on conventional spreadsheets to manage their finances and accounts, combining several fragmented variations of banks, billing systems and databases.

Skilled finance professionals at leading global businesses still lack the automated solutions required to effectively report on simple metrics, like cash position and revenue. The latest report indicates that many of these teams have been forced to increase their headcount with manual activities that significantly increase the risk of material losses, compliance challenges and costly audits.

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Financial services companies move to automated, data-focused processes for new products and services

June 29, 2023

With the rise of multiple fintech startups and continued shifting customer preferences for digital banking, financial services businesses have endured many changes over the last few years.

Shifting to automated, data-driven processes is the most effective solution for businesses to manage disruption and harness new opportunities. As customers have increasingly moved to online services, the number of physical branches has declined by over 900 annually for the last decade. If this trend continues, some professionals believe branches could disappear by 2034. There is an opportunity in this transformative landscape. Conventional banks can apply digital solutions to gain customer insights and use real-time analytics to enhance and accelerate available services. Open banking allows financial institutions to efficiently share data with other groups via APIs to improve the customer experience. For example, in countries overseas, your bank can allocate discounts or extend credit because they’ve opened up a dialogue within an ecosystem. This concept enhances the value banks can offer customers and strengthens their position to provide new services to their customers.

Automation is initially costly and time-consuming, but some critical challenges impacting financial reporting and measurement relate to missing documentation and errors due to missing documents. Adopting digital technology reduces errors and dramatically reduces the time to complete financial processes.

Digitally managed risk

Risk management is a top priority for all financial services businesses. Analytics, supported by machine learning, enables business leaders to manage risk based on multiple variables, many of which necessarily aren’t clear. For example, climate change will significantly impact the success of many projects worldwide and the potential of borrowers to repay loans. Finance companies must consider all of these challenges in their financial plans. The ability to forecast and determine the impacts of climate change could become a vital factor in future success.
Security and regulatory challenges are also significant to financial services businesses. Harnessing data analysis and support by ML can improve fraud detection and enable necessary changes to improve overall customer satisfaction. A singular data platform provides one platform for all customer data and regulatory reporting.

The combination of real-time analysis and assessing historical data can determine anomalies that suggest potential data breaches. Data and analytics are essential for both data security and physical security. Deloitte has predicted that retail banks can decrease processing expenses by up to 25% and reduce records management costs by a further 70% by eliminating paper. There is still significant space for digital solutions in financial services.

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The data challenge for the finance industry

June 1, 2023

The Chief Product and Technology Officer at Spendesk recently discussed the benefits of data for the finance industry. In our digital world, finance and fintech companies consistently look for ways to use data to deliver more personalisation and relevant services.

Product-related data provides vital insights into behaviours, choices and customer demands, which can support the financial services industry to deliver customised financial products. However, the application of in-product data does create privacy concerns. To strike a balance between utilising the value of data and protecting privacy, the finance industry must implement a customer-focused approach toward data management. 

The fintech industry is an exciting space and while there has been a broader slowdown in investment, the fintech space still can adapt and pivot easier than banks and traditional financial institutions. The agility aspect is critical in times of economic uncertainty when things may need to change quickly. The rise of digital connectivity is providing businesses access to accurate, real-time data that can be applied in a meaningful manner.

The benefits of data cannot be ignored and utilising it in intelligent ways offers significant opportunities for fintech companies. For example, business spending management enables companies can gather so much information from the data collected on employee expenses. Spend management solutions can support business leaders and their CFOs to create spending limits and provide enhanced visibility when examining and allocating budgets. 

A CFO that can show these types of cost efficiencies in the current economic conditions will be in a favourable position. Solutions that utilise AI enable the finance industry to measure large volumes of data, identify trends and apply this information to deliver bespoke financial products and services that meet the requirements of each customer. A financial institution might use data to determine which savings or investment products are the most popular with various demographics, and use this info to create customised financial products that work specifically for those customers. 

One important element of a customer-centric approach is implementing secure data protection policies and processes. The finance sector is heavily regulated, so should be capable of adhering to data privacy regulations. Any customer data has a potential risk, so companies must recognise liability issues and apply the necessary measures to control them. Aside from liability protection, prioritising privacy builds trust with customers. Recent research from Google and Ipsos suggests that 43% of respondents would move from their preferred brand to a second-choice brand if they offered a better privacy experience. 

Another critical part of applying a customer-centric approach is providing individuals with more control over their data. For example, businesses can provide customers with secure online portals to access and manage their data or provide an option to manage who has access to their information and how it is used. It’s vital to consider all opportunities available to build trust with customers while ensuring that data is handled responsibly and ethically. If your business uses data protection policies and processes, remains transparent on data collection and gives customers more control over their data, the data challenge can become a data opportunity. This opportunity can be enhanced by using innovative technology that equally benefits both businesses and their customers.


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Six ways CFOs can increase the potential of transformation success

May 17, 2023

Adapting and transforming business activities during challenging times is vital. According to EY, progression and future success are more likely if CFOs can focus on six complex human-based factors. CFOs recognise from experience that successful transformation is challenging and requires their input. 

A recent study between EY and the University of Oxford Said Business School discovered that at least three-quarters of CFOs have experienced some form of transformation over the last five years, but many CFOs still fail to recognise that acceptance from other employees is critical in determining the progress of transformation. Research indicates that successful transformation leaders are more efficient at managing workplace stress and pressure, and by managing these six key factors, they increase the potential of transformation considerably. 

Key drivers of transformation success for CFOs

  1. Inspire: create a vision that is presented to all and represents a comprehensive explanation of ‘why’. Business leaders may not recognise the importance a vision can have in terms of inspiring others and creating a sense of purpose. The time and investment spent on delivering a vision can be lost. About half of the finance workforce affected by a successful transformation plan stated that didn’t clearly understand the leadership vision.

CFOs may not value the power of a shared purpose in inspiring teams. According to the study, CFOs must maintain the human aspect of transformation as a priority. Leaders need a good understanding of the future and its impact on individuals and groups. Generally, CFOs will consider program milestones and business goals rather than personal and individual targets. CFOs must invest in a plan that supports individual journeys to provide people with a sense of ownership, belonging and control of their positions.

2. Create an empathetic and authentic leadership plan that aligns with the finance vision. Successful transformation needs leaders to show courage and empathy, especially around workforce expectations and priorities. While clarity of the vision is important for gaining momentum, CFOs must demonstrate empathy, and show connections between the transformation vision and the benefits to the business and the workforce.

3. Purposely build an environment that supports the workforce and their roles. Successful transformation requires people to invest and commit to the journey. While leadership is vital, creating a transformation culture where everyone feels engaged in the journey is even more necessary. In the EY survey, 46% of finance leaders welcomed ideas from junior staff members, and only 31% of finance employees believes leaders listened to their ideas. CFOs must focus on the personal aspect of transformation and ensure people feel empowered and capable of voicing their opinions. With this in mind, CFOs must actively listen and respond to employee feedback.

4. Empower – delegate decisions and focus on delivering a culture of safety testing. Transformation journeys are not set in stone and can change depending on certain events. In the EY study, successful transformation leaders suggest that taking a step back or changing paths wasn’t necessarily a bad idea. Leaders must set expectations that can adapt when needed and communicate the changes transparently and as early as possible. Traditional finance functions on a basis that requires precision and working to specific metrics at particular intervals. This approach creates a culture of no surprises, which can at times, hinder innovation. The study suggests that finance leaders were more inclined to believe that failed testing would result in a negative impact on their careers, but as transformation becomes more regular, CFOs must encourage creativity and innovation that ensures their business is capable of adapting and learning. CFOs must create a safe environment, ensuring people feel welcome to experiment and test without negatively impacting their careers. 

5. Construct a way of showing how technology will deliver the financial vision. Blending technology with the necessary skills is critical in enabling transformation. Innovative technology is often a priority for finance leadership transformation plans. The study shows that 38% of CFOs identified technology and digital innovation as top priorities for accelerating transformation. That said, only 40% of senior finance leaders, including CFOs, determined technology as the top three challenges in delivering a successful transformation. 

6. Collaboration: create a plan for collaboration, and deliver new ways of working. While nearly half of the finance leaders believe processes were created to deliver collaboration within the business during transformation, only 31% of finance employees agreed with this. The gap here is critical when compared to other functions. It suggests the bigger challenge that finance professionals don’t feel that leaders are finding or valuing their efforts during the transformation. To increase success, EY research suggests that creating a space for new ways of thinking is essential. CFOs must segment siloed and hierarchical ways of working, and implement a multi-discipline approach that enables new perspectives and allows everyone to be involved in the transformation.

Transformation success will come from putting people at the forefront of new plans. CFOs have a holistic view of a business and are well-positioned to determine the tone of practices required for transformation. Today’s CFO must consciously focus on empowering people and lead with a vision with a ‘we’ not ‘me’ approach. 

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How fintech is enhancing data access for finance businesses

May 10, 2023

Data has become the new currency in today’s financial landscape, and the fintech industry is leading the way by leveraging technology to tackle challenges and deliver better financial solutions.

Financial businesses are competing to transform their activities, and with the existing economic conditions, customers are demanding far more services and solutions, with increasing availability of new data, new data management policies and the potential of cyber attacks rising. The various ways of managing data can be vital tool to tackle challenges in the finance industry. Fintech has transformed traditional banking, delivering innovation to a market previously considered unchangeable. New businesses have challenged the norm, driving financial companies to change and move away from legacy systems.

There is now a significant opportunity for finance companies to use the data available in fintech. This will help companies work through the new landscape and improve data access, leading to more effective customer-focused services and enabling banks to remain competitive in a digital world.

Data stands at the core of financial services, from credit ratings to regulatory compliance and fraud detection. The volume of data available in finance is considerable, and the demand to explore and measure this information is more critical than ever. There are several key areas where fintech can drive improvements in access to data for finance companies.

Firstly, data security is a top priority for all businesses as cyber-attacks are rising, with studies suggesting that businesses experienced a 77% increase in attacks in 2022. This figure represents a significant threat for financial companies as finance holds valuable information that makes businesses potentially more vulnerable to cyber security threats. The fintech industry offers innovative ways to protect data via advanced encryption processes, sophisticated authentication and blockchain-focused solutions. These progressive forms of technology can support finance companies in protecting customer information, building stronger relationships and defending themselves against possible reputational and financial loss.

Delivering a more flexible approach

Data interoperability is critical in today’s financial ecosystem. Customers increasingly depend on various financial providers, while demanding an effective experience and customer service. Existing legacy systems used by many incumbents often lack the flexibility and available services needed for seamless data exchange, resulting in relatively slow and unstructured customer service.
Fintech companies offer solutions to these challenges, utilising open banking processes and APIs, enabling the integration of services between various groups, and improving collaboration and data sharing.

The enhanced use of data can improve business operations by changing the way financial companies determine plans, manage risk and support their customers. Data-focused decision-making, supported by new techs like AI, ML and big data analytics is all possible because of solutions presented in the fintech industry.

The fintech industry can strengthen the financial sector by providing solutions that can improve operations and enable companies to create services that meet customer needs and ensure they remain competitive. By rethinking how we use data and utilising the potential of fintech, finance companies can streamline their operations, improve customer experience and make better decisions, driving growth and increasing competitiveness in the industry.

The fintech industry has a significant opportunity to generate positive changes and improve data access for finance companies. It is the responsibility of the finance industry to recognise and implement the services available and the fintech providers to continue generating new solutions to improve operations. Through collaboration, the fintech industry can reshape traditional finance companies, unravelling a reformed, efficient and secure financial future while enabling a customer-focused approach leading to accelerated future business growth.

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Digital transformation in banking: Exploring the Future of Finance

April 26, 2023

Digital technology has transformed the finance industry by enhancing the customer experience, improving operational efficiency and reducing overall costs. AI, big data analytics and automation are top trends reshaping the finance industry. There are challenges, however, including regulatory compliance, outdated tech systems, security, the demand for talent and the potential risk of losing connection with personal banking.

Digital banking today has transformed our personal experience with our finances. From mobile payments to AI-driven technology, the finance industry is rapidly changing. The traditional banking system has carved a new path to a more accessible digital banking model. Customers can access their accounts, transfer money and pay their bills from home or via their smart devices. This movement towards digital banking has enhanced the customer experience and improved overall business operations. Digital technology has allowed banks to improve security measures and prevent potential fraud cases. Digital technology will continue shaping the future of finance.
Enhancing the customer experience and business operations

Industry transformation is supported by several factors, including improved customer experience, increased efficiency and reduced costs. The rise of fintech businesses and changing demands of customers have played a critical role in driving digital transformation in finance. Furthermore, regulatory changes and tech advancements have made it easier for finance businesses to adopt digital solutions. The increased use of mobile tech and the Internet has also supported further growth in digital banking.

The shift toward digital technology has transformed traditional finance practices. It has enabled new businesses to emerge, offering a range of advantages to the finance world. It has improved the overall customer experience by providing accessible services for all. Digital technology has also increased operational efficiency for finance businesses by creating quicker transactions and reduced costs.

By recognising the advancements, you can make informed decisions about which finance businesses to work with and which technologies to adopt to manage finances effectively.

Navigating the digital finance scene

The digital finance industry is rapidly evolving, and finance companies must remain in touch with the latest trends to stay competitive. Many benefits have emerged with digital tech, but there are also challenges finance companies face when adopting digital solutions. One of the main challenges is related to regulatory compliance. Finance businesses must meet a range of regulations and standards when implementing digital technology to ensure complete security and privacy of customer data. This process can take time and requires considerable resources.
A secondary challenge is legacy systems, with many conventional banks relying on outdated IT systems incompatible with today’s digital solutions. Upgrading these systems can be expensive and time-consuming, blocking the potential adoption of digital technologies.

Cybersecurity is a major concern when implementing digital technology in finance. Businesses must ensure their systems remain secure and protected from potential cyber-attacks. Furthermore, there is a need for skilled talent capable of managing and maintaining new digital solutions. This requires additional investment in training and development plans to ensure employees have the skills to work effectively with new technologies.

Finally, there is a risk of losing the personal connection in finance as more activities move online. Financial institutions must find ways to balance the accessibility of digital banking with personalised customer service to keep customer loyalty. While there are challenges in adding new digital services, finance companies must discover ways to alleviate these concerns to remain competitive in a digital future.

As finance companies slowly transition from physical branches, it will become more important to balance the convenience of digital banking and the personalisation that people demand. While online banking has become very popular, many people still want personal interactions. To address this, emerging technologies like AR and VR may provide solutions to connect the gap between digital accessibility and personalisation. Utilising emerging technologies may enable us to strike a balance, improving customer satisfaction and loyalty. As finance moves closer towards a digital transformation, it’s critical to remember the value of personalisation. Augmented and virtual reality provide a solution to connect digital and personal services. Incorporating these types of services will create an experience that provides customers with more insights into financial products and services.

We are embarking on a new transformation journey and should embrace the power of tech to deliver a promising future for finance. By using digital technologies, banks can transform how they support their customers. Innovation and digital disruption are vital to generating new opportunities and exceeding customer expectations. Finance companies must keep close to emerging trends and provide more convenient and accessible services to their customers and deliver an enhanced finance experience.

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Driving digital transformation in finance requires getting the data right

April 12, 2023

Applying data skills and governance for leaders and employees is critical for CFOs to make progress with digital transformation plans. With the rising speculation around AI and other technologies, digital transformation remains a priority for CFOs. To make real progress on their digital plans they must position data governance and skills at the top.

Industry professionals believe that getting the data right is vital for their clients. Bad data will directly impact the ability to use new features with AI. If businesses lack data governance or their systems are clustered with duplicate customers and other information, for example, the insights gained from predictive analytics cannot provide much-added value. Understanding data structure basics is critical in this process as it recognises the overall strategy and how it connects with digital transformation.

Digital transformation is dependent on understanding the data

CFOs take on a vital role in driving their digital transformation goals forward. While CTOs or other executives can provide essential insights, accountability goes back to the CFO because such measures are a significant investment into their organisation.

Having a complete understanding of a data governance strategy is crucial for finance leaders. Industry leaders believe that having a CFO, a decision maker at the senior level capable of making those major decisions, will accelerate the digital transformation journey. 

Gaining a broader understanding of data structure and building those necessary skills can enable leaders to be more prepared when exploring new technologies. For example, exploring the potential of AI is becoming a necessity for businesses, especially in the current economic climate.

Uncertainties for our economy mean applying a ‘wait and see’ approach toward digital transformation is no longer viable. Businesses that fail to adopt new systems may not be capable of taking advantage of emerging technologies to navigate further disruption. AI can be integrated with other platforms to aggregate vital information, explore data and find key insights to drive businesses forward.

CFOs and senior leaders are trying to determine what areas to focus on, finding the reports or key performance indicators that will enable them to make the best decisions, move forward, empower their colleagues and retain skilled employees.

Data skills can support talent retention

Applying a data-focused approach can support finance leaders with talent retention, as upskilling in this area can save businesses money and enable them to progress with their digital transformation plans. Businesses are beginning to focus on empowering their workforce to learn new skills. 

While recent studies show job growth is slowing, cost optimisation remains a high priority for CFOs, with headcount and compensation regarded as two areas where financial leaders may look to reduce expenses. According to a study by Grant Thornton, 42% of financial leaders highlighted these areas as a means to reduce costs, with the number of CFOs who stated they are unsure they can meet their labour needs declining to an all-time low.

Upskilling talent not only means businesses avoid hiring new people, but it also helps with employee retention. More millennials and next-gen people want to learn and grow at an organisation, and if they aren’t offered this, they will quickly leave. Investing in their training will strengthen their employees and create a workforce prepared to continue investing in the business.

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