A recent research by SAP and Oxford Economics has found that only 30% of banking executives believe their communication, data sharing, and process management are completely integrated across their organization’s operations. Falk Rieker, the global head of the banking industry at SAP, explains how banks are using intelligent technologies, such as AI and machine learning, to digitally transform their businesses.
Digital transformation has brought widespread change across all industries, bringing new benefits and challenges to the forefront of business operations. For fintech companies, digital transformation has been gradually taking hold over the last few years. As more of these companies continue to adapt and implement innovative technologies, the challenge of staying compliant and in-line with regulatory requirements emerges. This need is particularly high for the banking industry as these organizations often face some of the most stringent and complex regulatory demands.
For the banking industry, adhering to regulatory guidelines without hampering a company’s digital transformation journey is critical to succeeding in an increasingly tougher market environment. To achieve this balance, organizations should take a more holistic, interconnected approach to their banking operations.
Get to Know Your Data
To meet rapidly changing regulatory demands, banks need to have complete control over their data. However, recent research from SAP and Oxford EconomicsOpens a new window found that only 30% of banking executives believe their communication, data-sharing, and process management are completely integrated across their organization’s operations. This presents some major challenges for organizations looking to better meet regulatory needs.
Limited visibility means you can’t look at data from the entire enterprise, leaving a chance that parts of the organization might not be operating how they should be. To combat this visibility problem, banking institutions should turn toward an interconnected approach to management. This means driving collaboration across all sections of the business.
In the case of banking, many organizations lack insight into their HR operations and current talent pool. From a reporting perspective, this can make identifying crucial employee data much more difficult and could potentially have ramifications on the compliance side. Creating a holistic view informs better decision-making and streamlined processes and ensures that compliance and regulatory reporting are as accurate and efficient as possible. Â
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Meet the Demand of a Rapidly Growing Fintech World
Technological innovation has brought a radical change to the fintech space. Payments are made through various digital platforms, and customers increasingly demand more complex banking features to be made available in a digital setting. To keep up with these changes, banks need to take steps to integrate their operations enterprise-wide.
PayPal is an example of this strategy. The company wanted to harness data at the transactional level to meet both its business and regulatory demands. By partnering with SAP, PayPalOpens a new window implemented a solution that helped it streamline and automate vital business functions. This, in turn, improved the overall reporting on important financial data and mitigated overall risk by centralizing data governance and business accounting rules. This platform gave PayPal a scalable and agile system capable of providing financial reporting and transparency into their quickly expanding global business.
At a time when unpredictable factors have added stress to banking institutions everywhere, being in complete control of business data is essential. The added flexibility that an interconnected approach provides helps alleviate regulatory burdens and better navigate the ups and downs of unique situations like a global pandemic.
Cut Down on Complexity
For many banking institutions, the existing systems are complicated, and digital transformation can be inherently disruptive to the current processes. This process can greatly disrupt reporting efforts, as data is difficult to track down and gain useful insights from.
Adopting an interconnected banking approach can cut through the complexity of outdated systems and streamline the digital transformation journey. For Erste Group BankOpens a new window , there was a clear need to implement a new system to increase transparency across the organization. Through its work with SAP, Erste Group pushed for better interconnectivity, simplifying back end processes and improving data visibility, making for simplified, quicker reporting on compliance, regulatory, and financial data. By streamlining systems, Erste Group gained total visibility and empowered leaders to make better-informed decisions quickly.Â
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Maintain Compliance Without Sacrificing Innovation
Digital transformation projects can often be complex, time-consuming. They may even conflict with existing operations. Because of this, organizations may feel they need to prioritize keeping operations in line with regulations instead of innovating with new technologies.Â
However, when banks implement an interconnected approach, there’s no need to sacrifice one for the other. Interconnected banking creates more visibility and makes reporting more accurate and faster. The added data insights help banks identify redundant and inefficient processes that need to be streamlined, enabling them to better scale as market demands fluctuate.Â
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