Digitization is fundamentally transforming business operations in every industry, including the financial services industry (FSI). From new product and service opportunities to more efficient ways of doing business, digital disruption is happening. The question is how will banks react? As they acquire information through digital channels, banks will have to reassess their business models. “The issue will be how the legacy banks in the market will react and what it will mean for them, versus some of the more agile banks,” says James Cronk, Global Director of the Financial Services Industry with Cisco®.
Response to digital disruption1
Neither appealing nor unappealing
say digital disruption isn’t a board level concern
Digital practices allow for more access to analytics, which leads to more personalized offerings and services for your customers. But what about the potential downside? “The more you put into digital the more you put yourself out there for impending external threats,” adds Cronk. This is why cybersecurity is top of mind for many organizations. And it should be.
Another challenge financial services organizations face is compliance. “When you have regulators constantly adding more layers of compliance requirements, it is becoming more costly for a financial institution to run their business,” says Cronk. “If you are going to secure your firm, what does it mean to start offering new products and services with new business models when you have regulators breathing down your neck?”
Changes within governments and leadership also affect the global financial services market and the ways customers run their businesses. “You have a melting pot of concern,” Cronk adds. While some are concerned about the impact of Brexit, others believe London is going to continue to be the center for financial business globally. The political climate in the United States also has market impact, causing emerging markets to feel financial pressure. “You marry that up with the digital explosion, and add in risk and cyber-security, and some might say you have the perfect storm,” says Cronk.
Many banks are sitting on the fence waiting to see what will transpire. And while they wait, data becomes even more important. For banking, insurance, or wealth management firms, access to secure and timely data is vital. As people and things become more mobile and connected, new devices are generating a flood of data. So how are banks juggling it all? Cronk says, “Having all of this connectivity—securely connecting people, data, process and things—we can provide an intelligent infrastructure in a more cost-effective manner, and you can start embracing new elements around not just the traditional legacy elements of banks, but providing options such as the agility and cost-effectiveness of using cloud and being able to provide a much more seamless experience for technology going forward.”
Being connected drives positive business results.2
of occupants gained a better sense of well-being
increase inoccupant capacity
drop in workplace related OpEx
AI that allows customers to connect to virtual advisors from anywhere, with any device
Collaboration solutions that fit in every pocket, office, and conference room
Intelligent customer service channels that go beyond telephone interactions
And it’s not just Cloud that is creating shifts and disruption in the industry. Artificial intelligence is allowing customers to be connected to virtual advisors regardless of location or endpoint within the branch. “You’re going to see more investment around the Intelligent Contact Center. It’s going to be more than a telephone interaction point. It will be a more intelligent customer service channel,” notes Cronk. FinTech—financial services companies that use new technology and innovation to leverage available resources—is also affecting business operations within financial services firms, as it is putting on the pressure for banks to innovate more rapidly. According to Cronk, “At the end of the day, it should provide a more healthy competitive environment and source of innovation for banks going forward.”
For long term, Cronk says, “The energy of banks will depend heavily on what they do can with the ever-increasing volume of data and best utilize it for competitive differentiation.” This will certainly have a considerable impact on business operations. There is no doubt digital is impacting every facet of the FSI. Digital initiatives are driving connectivity to millions of things that were never connected before, creating tons of new data and increased exposure and risk for financial services firms. When your employees want to evaluate that data, they can do so on the fly thanks to collaboration solutions that fit in every pocket, every office, and every conference room.
The right foundation is key to your digital initiatives—and Cisco is your foundation for transformation. From data center to cloud, we take a cloud-neutral approach to your hybrid IT world to help in closing the cloud gap, an approach that puts the interests and requirements of your organization and your hybrid cloud first, before those of any single public cloud provider or cloud technology. We bring together security, automation, analytics, and collaboration that’s embedded in the network. These capabilities are woven into the fabric of your network and your business.
More from the Cisco Services team
Cisco Services' expertise is at the forefront of pivotal industry transitions, and our services offerings are designed to deliver what our customers value most: true business results. Through innovation, global expertise, and commitment to customer care, we help customers:
- Accelerate technology adoption and transformation
- Enhance business continuity and security
- Enable efficient, scalable operations
Cisco Services understands the needs of our financial services customers. We have a rich history of partnering with organizations to help them quickly and confidently achieve their business objectives. Whether you’re developing a comprehensive cloud strategy, optimizing application delivery framework, creating large-scale automation programs, or ensuring the safety of customers and data through enhanced security solutions, we can help. And chances are, we’ve seen it or done it before.
Our guidance is informed by hands-on expertise and leadership on the frontlines of secure networking, integrated architecture design and delivery, and market-leading products. Our customers are among the world’s elite FSI organizations, as well as new and emerging companies:
- Global: 8 of the top 10 FSI companies (and 15 of the top 20 FSI companies), including all of the top 12 banks, (and 18 of the top 20 banks)
- US: 17 of the top 20 FSI companies, including all of the top 13 banks; All of the Big Four auditing firms
Cisco Services plays a pivotal role helping customers address challenges, simplify IT, secure their business, drive optimal resource utilization, and build a network infrastructure for the future, today.
- Digital Vortex: How Digital Disruption Is Redefining Industries, Global Center for Digital Business Transformation, June 2015.