8 Powerful Strategies for Financial Companies to Kickstart Digital Transformation

Compared to other industries, digital transformation in the financial services sector is an altogether different ball game. Why is it different? Digital transformation in the financial sector presents a unique set of challenges, including stricter regulations, the usage of legacy systems, security concerns, and ever-shifting customer preferences.

With so many uncertainties and challenges, financial companies find it challenging to embark on a digital transformation mission and stay ahead of the competition. Banks, insurance, and other financial institutions and companies in Fintech, Insertech, Regtech, and Techfin must adapt to align with the changed industry demands. In this journey, digital experience service providers can be invaluable partners, offering their expertise to help these companies navigate these tricky waters, providing reassurance and support.

However, to embark on the path of digital transformation, companies need to change the way they approach financial services. The leaders must shift their focus from traditional activities like recordkeeping, reporting, and compliance to strategic decision-making, innovation, and efficiency. This blog will focus on the 8 strategies finance companies can use to kickstart their digital transformation.

8-Point Digital transformation Masterplan for Finance Companies in 2024

Digital transformation is no longer an option. Companies must survive in 2024 and beyond. Research shows that 90% of respondents strongly affirm that digital technologies are transforming the financial landscape.

Furthermore, another study stated that 92% of finance leaders from 89 major corporations had already introduced digital technologies in their organizations. Of these leaders, only 11% believed they were in an advanced stage of digital transformation. Below are 8 robust strategies that finance companies should consider to start their digital transformation.

1. Foster a Digital Culture
Establishing a strong digital culture in an organization is crucial. This digital approach lays the framework for business longevity. Below are some of the key points for fostering a digital culture in a financial institution.

Leadership Responsibility

Not all employees are eager to adopt cutting-edge technology, while others may resist change. The leadership team is responsible for implementing new technologies and familiarizing the employees with them. Once these technologies are a part of the processes, employees must adopt them to ensure optimal performance and remain relevant in the organization.

Employee Training

Implementing new technologies without proper training is a recipe for disaster. After implementing new technologies, business owners must conduct detailed training sessions to familiarize the employees with the latest product’s features and functionalities. Even after the training sessions, managers and supervisors must follow up to check if the employees have grasped the concept and learned to use the new technologies/products.

Top-Down Approach

The management’s job is not just to lay down rules and ensure their implementation. They also have to lead by example. Firstly, the managers and department heads must thoroughly understand the new product/technology and train the team leaders. The team leaders, in turn, must see to it that the team members understand how to use the new technology to drive innovation, accuracy, and productivity.

Establishing a digital culture allows everyone in the organization to be on the same page. Simultaneously, leaders can prioritize sustainability while keeping future needs in mind. Also, effective collaboration between team members and departments facilitates the sharing of new ideas, resulting in increased creativity and innovation.

2. Develop a Robust Blueprint
Digital transformation without a vision or a goal is a waste of time and money. It is crucial to have a proper plan of action with KPAs to ensure that you achieve the desired results through digital transformation. The main steps in developing a digital transformation blueprint are as follows.

Outlining Current Scenario and Future Vision

Create a visual representation of your current financial workflows and systems.

Also, ask yourself the following questions.

What tools and technologies will you use?
Who will be a part of the digital transformation team?
What do you want to achieve through digital transformation?
What steps will you take to implement digital transformation?
Needs Analysis
Where do you stand currently?
Where do you see yourself after digital transformation implementation?
What hurdles do you face at present?
What are your weaknesses?
Think about the above aspects while conducting a needs assessment.

Goal Setting

Define your vision and mission for digital transformation.
Outline the finance department’s goals to align with the company vision.
How will digital transformation facilitate the achievement of the company vision?
Considering the above points will greatly help with goal setting.

3. Team Assessment and Strategy Building
Know your team and how it fits into the grand scheme of things after digital transformation.

Skills Assessment

Identify the skills and capabilities of your current finance team members.
Are there any gaps you need to address before implementing new processes and technologies for digital transformation?
Change Management
Are the team members mentally prepared to adopt new processes and technologies?
Establish employee KPIs that align with the new digital transformation process.
Implement training methods like programs and learning sessions to inform employees about their role in the organization after implementing digital transformation.
Team Structure
Think about how the new team structure will look after implementing digital transformation.
Will it involve creating new roles and responsibilities?
Do you need to create new teams?
What will be your areas of focus (data analysis, automation, cybersecurity)?
Process Optimization and Tech Selection

Iron out the flaws in your existing processes before implementing new technologies and processes. This will lay a solid foundation for the technologies to work effectively and highlight hidden needs that may be holding you back.

What technologies will you need? Don’t embrace all the trending tools and technologies. All of them may not align with your business type or bespoke requirements. Consider technologies like the following:

ERP Systems – For business process integration, centralized data management and increased business scalability.
RPA (Robotic Process Automation) – RPAs are crucial for repetitive tasks automation, improved operational efficiency, and system integration without major revamp or infrastructure investments.
Cloud Accounting – Offers greater accessibility, facilitates real-time collaboration, plus automatic updates and data backup.
Data Analytics Tools – Obtain valuable insights derived from financial data to make informed decisions.
Constant Innovation and Fine-Tuning

Digital transformation is not a one-time process. Once implemented, you need to keep fine-tuning to achieve the best results and stay ahead of the competition.

Managers and department heads must involve all team members during all phases of digital transformation.
After implementing new tools and technologies, gathering feedback from your team members is essential. Constructive feedback is a valuable resource for making necessary changes and improving our processes.
Culture of Innovation – Encourage the finance team to experiment with new tools and technologies. They can share their insights and foster innovation and constant improvements.
4. Streamline Processes for Powerful Digital Transformation
Streamline your business processes to ensure that introducing new tools and technologies contributes to achieving strategic business objectives.

Proper Collaboration for Streamlined Processes

Whether it’s top management staff or subordinates, involve everyone in the technology selection and implementation process.
Including everyone ensures successful technology implementation and adoption while minimizing resistance to change.
Identify Redundant Processes
Analyze existing processes and workflows. Eliminate obsolete processes or steps that add no value to the organization.
Identifying redundancies and eliminating them ensures optimal resource utilization and streamlined processes.
Align Processes With Strategies

Understand that technology is the means to an end. It is not the ultimate goal. Hence, choosing the right tools and technologies to help you achieve your business goals makes sense. Don’t go by what is trending or what your competitors are using. Analyze your specific requirements and choose wisely.

While developing processes, consider simplicity and convenience for employees, customers, and users. This is necessary for easy adoption and user satisfaction.
Using analytics-powered insights, we can measure results, identify trends, and pinpoint areas for improvement.
Change is the only constant. Aim for continuous improvement. Implement constant testing to eliminate what’s necessary and adopt what’s useful.
Smart Adaptation

Companies must critically evaluate their existing processes and then hop on to digital transformation.

Do not automate existing processes because your competitor did it.
Your business is unique. Consider the pros and cons of automating each business process.
Rather than completely revamping each business process, find pre-packaged solutions to help you perform the specific tasks.
Simultaneously, these ready-to-use solutions will save considerable time and resources.
Concentrate on Your Pain Points
What problems do you want to solve by implementing digital transformation?
List out the problems and determine how digital transformation will solve them.
When faced with situations that require modification of pre-packaged solutions, it’s essential to coordinate with your technical team. Train your employees to prepare for digital transformation, including new processes, tools, and technologies.
Provide adequate training and follow-up to check if they have grasped the required knowledge to perform their new assignments.
5. Supercharge Decisions With Data Analytics
Real-time data is like oxygen for a finance company. Not only does it help companies stay relevant in the face of fierce competition, but it also adds value to the organization. How does it benefit finance companies? Let’s find out. Enhanced Decision-Making
Trends, customer preferences, and situations can change quickly in dynamic sectors like financial services.
Live data from various sources, including internal systems, market feeds, payment networks, social media, and others, gives companies the power to adapt to a dynamic business environment.
For instance, powerful algorithms harness the power of live data to analyze stock price changes, social media buzz, and news sentiment analysis. This results in identifying robust trading opportunities, which finance companies can use to fine-tune their investment strategies.
Identifying Value Creation Opportunities
Real-time data goes beyond historical data. It combines operational data, market trends, and customer sentiments.
The finance department can explore this valuable data treasure to analyze various aspects of their financial performance, including revenue, expenses, and profitability.
Real-time data analysis facilitates significant cost-savings, optimized resource utilization, and identifying new investment opportunities.
Enthusiastic Risk Management
Conventional risk management follows a reactive approach where companies identify the problems after they have already caused damage.
The conventional approach relies heavily on historical data, which doesn’t consider the latest trends and market fluctuations.
Also, the damage would have intensified when companies analyze data and develop strategies.
Therefore, it is highly recommended that we shift to a proactive risk management approach. This approach involves constant market data analysis, risk metrics, credit risks, and regulatory compliance in real-time.
For example, some financial organizations conduct regular stress tests to understand changing market conditions, portfolio composition, and regulatory requirements. This exercise ensures that the company’s risk management strategies remain relevant over time.
Improved Collaboration
Technology and automation have entered the finance industry, but many companies rely on spreadsheets and legacy systems.
Data stored in multiple formats, systems, and software lead to inaccurate data being shared within the organization.
Relying on siloed data results in poor inter-departmental collaboration. You remain a step behind because you react to historical data rather than anticipate future trends.
Real-time data ensures shared insights across multiple departments, allowing for optimized decision-making.
Be it inventory, sales, marketing or other departments, real-time data facilitates accurate forecasting and target setting. This results in the proper fulfillment of customer requirements.
With the adoption of real-time data, the finance team is no longer a passive observer. It now plays a proactive role in identifying potential threats and issues, thereby assisting companies in taking preventive measures.
Examples of Data Analytics Tools Include the following:
BI (Business Intelligence) Tools
Predictive Analysis
Data Visualization Tools
Most importantly, companies can gather valuable insights from analytics tools to highlight their performance and prospects. Finance companies can use detailed reports and forecasts to present annual reports or obtain funding from potential investors.

6. Employee Participation and Development
Digital transformation is not just about implementing new tools and technologies and revamping processes. It won’t succeed until companies involve their staff in the process.

Training and Resources

After implementing digital transformation, the company’s employees must receive proper training. Comprehensive training will enable them to perform their duties with confidence and efficiency.
Companies can impart training through online courses, seminars, workshops, and other materials.
Assign specific time slots for these activities so employees can focus entirely on learning. Assess their learning through tests and quizzes.
Foster a Learning Culture
Learning must not be restricted to internal employees, lectures, and online learning material.
The best teachers can be competitors. Analyze your competitor’s strategies and actions to understand what works in finance.
The next step is to examine your finance operations, identify flaws, and make adjustments to refine your strategies.
Don’t resort to blatant copying in the name of inspiration. Modify your strategies and plans to align with your business vision and goals. Differentiate yourself with unique offerings.
Constant Learning
Technologies evolve, and so do market trends and customer preferences. Why should learning be stagnant? Companies must implement a plan for continuous learning and development. The outline of the plan can be as follows:
Planning – Identify areas of improvement and establish actionable goals and practical strategies to achieve them.
Action – Implement the changes.
Check – What results did you achieve after implementing the strategy? Examine the results.
Corrective Action – Fine-tune your strategies, measure the results, and repeat the cycle.
7. Choose the Right Technology
Choosing the right technology for your digital transformation is paramount. You must follow a structured approach to selecting the right technology for your finance business.

Get Your Priorities Straight

Total Cost of Ownership – Long-term costs, including fees, infrastructure upgrade costs, and ongoing maintenance requirements.
Initial Investment involves upfront investment costs, including technology, licensing fees, implementation, and training costs.
Data Security – Robust security measures, including encryption protocols, access controls, and intrusion detection systems.
Business Needs – The technology must align with the business vision and objectives.
Scalability – Technology must adapt to future needs, such as expansion requirements, an increased customer base, mergers and acquisitions, product offerings, and more.
Integration Features – New technology must integrate with existing systems, legacy equipment, and third-party apps, such as payment gateways and credit checks.
Think About Future Needs
Company stakeholders and decision-makers must have the vision to adopt new and emerging technologies, such as AI, blockchain, cloud computing, AR and VR, and IoT.
Talk to multiple vendors and explore your options. Choose the right vendor that matches your requirements while prioritizing post-sales support, maintenance, and continuous product development. This will ensure the technology remains relevant in the ever-changing financial landscape and customer requirements.
Finally, the technology must be simple and easy to use. It must also include training material and user guides to facilitate smooth adoption.
8. Team Structure
The success of a digital transformation project depends not only on technologies but also on the team. Hence, it is crucial to establish a strong team structure to realize your digital transformation objectives.

Leadership Team

This team includes people with a holistic understanding of the project requirements and implementation. The head of operations will define the digital transformation strategy, delegate the responsibilities to the others in the middle-level management employees, and ensure proper execution. The leadership team may include individuals like the following:

Executive Sponsor like a CEO or CTO
Digital Transformation Officer (DTO) or Chief Digital Officer (CDO)
IT Leadership like CIO or CTO
Subject Matter Experts
Change Management Leads
Second in Command aka Core Digital Experience Team

The core digital experience team comprises people with immense experience and knowledge in their respective fields. Such individuals mentor coders, developers, programmers, testers, and others who actively work on and execute projects. Examples of core digital experience team members include the following:

Product Managers
Program Managers
Solution Architects
Customer Experience Leaders
Product Development/Creation Team

The product development team consists of people who will work on the actual product and build it from scratch. These professionals include coders, designers, testers, AI and ML specialists. All these employees work together to execute projects from start to finish.

Besides the team structure, choosing a suitable methodology is essential. For example, agile methodologies like Scrum and Kanban are considered lightweight, making them ideal for collaboration and communication. Smaller teams of developers (5 to 9 members) are best suited for agile methodologies, which focus primarily on short iterations and quick feedback loops.

On the other hand, the waterfall methodology adopts a conventional and sequential approach. It works best for a medium-sized team of 10-20 developers. The methodology clearly defines the tasks; it doesn’t call for frequent communication and iterations. Lastly, effective teamwork, proper task delegation, and collaboration go a long way in achieving common goals.

What can Tridhya Tech Do for Your Business?

Tridhya Tech is a reputed organization with a global presence in over 8 countries. Thousands of companies have benefited from our digital experience services. These companies hail from diverse industries, including manufacturing, retail and commerce, transportation and logistics, real estate, insurance, etc.

Emerging technologies like AI, cloud computing, cybersecurity, and hyper-personalization can take your business to the next level. However, not every company may have the required knowledge, expertise, and resources to implement digital transformation. Our team comprises seasoned industry experts who can create robust digital transformation strategies and execute your projects from start to finish.