What Does the 4th Industrial Revolution Mean for the Financial Services Industry in Sri Lanka?
Microsoft’s Asia Digital Transformation Survey (2017), involving 1,494 business leaders in 13 Asia Pacific markets, found that 81% of Financial Services Industry (FSI) leaders believe they need to transform to a digital business to enable future growth. They also believe that big data, AI and cloud computing are now an essential part of that transformation strategy.
In spite of this, only 31% said that they have a full digital strategy in place today, and 53% are in progress with specific digital transformation initiatives for selected parts of their business. These findings reflect the situation in Sri Lanka, where we are seeing an increasing number of financial services hoping to digitally transform.
While Sri Lanka is considered to be a leader in South Asia for financial inclusion, with 68% of adults possessing bank accounts (Asian Development Bank Institute Paper, 2014), the usage of cashless payment schemes for example have remained relatively low.
Increasing cyber-attacks targeting financial institutions are demanding the attention of business leaders to ensure security is a boardroom discussion and not merely a discussion at the CIO’s office. Further, a growing share of Millennials in the workforce and customer base are demanding FSI organisations to embrace the 4th Industrial revolution and kick-start the digital transformation journey before it is too late.
Banks today are dealing with customers who expect their mobile devices to be their banking agents, and are vocal about their opinions in public. We recently held a CXO Conference on “Banking in the Digital Era” to initiate and nurture this discussion among business decision makers in the FSI community and the response we received was overwhelmingly positive.
Financial institutions need to be prepared to pivot in this wave of digital disruption to stay relevant in order to attract and retain customers. The FSI sector, as a whole, can only increase profitability—and have the flexibility to scale, while ensuring consumer trust and confidence in its ability to protect customer data and assets from cyber-attacks—when it can provide personalised services.
It is also a very positive sign to see a serious dialogue being developed in Sri Lanka on Blockchain and Fintech. In order for our FSI sector to leapfrog and reap the benefits of technology, this dialogue must continue, while the necessary policy frameworks must be put in place.
Focussing on the four key pillars of Digital Transformation will decide the success or failure of Sri Lankan FSI organisations, for these pillars operationalize what the 4th Industrial Revolution may mean to FSI organisations.
Engage your customers: FSI companies will need to treat customers as savvier than ever before, since interested customers will often educate themselves on products or services before any engagement. At the same time, FSI companies will need to reimagine and simplify the customer experience to deliver more value through data insights and relevant offerings. When you offer an optimal customer experience, you have a greater chance of converting them into your advocates.
Empower your employees: With the entry of Millennials, the workplace has undergone a dramatic change. Today, it is crucial to provide employees with cloud-based productivity tools that provide seamless access to data. This will enable organisations to innovate faster, meet compliance requirements, and deliver exceptional client experiences.
Optimise your operations: Technology disrupters such as AI and big data are accelerating the potential for businesses to optimise their operations. FSI companies can gain breakthrough insight into risk and operational models with advanced analytics and act on real-time intelligence to optimise risk management and meet regulatory requirements.
Transform your products: The opportunity to embed software and technology directly into products and services is evolving how organisations deliver value, enabling new business models, and disrupting established markets. Moreover, FSI companies that leverage open and connected systems —with highly automated digital processes to support new product development—will meet the security, privacy and transparency expectations of customers, regulators and stakeholders.
