3 Ways Modern Finance Helps Financial Institutions Become More Resilient

WLP Group

The digital age is a time of rapid development. Thus, financial institutions must be able to keep up with these changes to deliver the products and services that their corporate and retail customers expect from them.

Now more than ever, companies that belong to the banking, financial services, and insurance (BFSI) sector must invest in technologies that improve their capability to match consumer demands and the pace of the changing regulatory landscape. Otherwise, they will not be able to maintain their net profit margins. To make matters worse, said companies may already be dealing with razor-thin margins given the resources they have to allocate to their modernization efforts.

The Role of Modern Financial Systems in Improving Resiliency

The good news is that modern finance systems are loaded with features and tools that will empower BFSI companies to quickly adapt to changes in the market. These systems use automation, advanced analytics, artificial intelligence, and other innovative technologies that are made accessible by digital core banking systems.

With these solutions, financial institutions can anticipate developments in the market, roll out products and services that meet or exceed the expectations of their customers, and make data-driven business decisions more quickly. These capabilities will make BFSI companies more resilient to the ever-changing times.

Here are a few specific ways modern finance systems empower BFSI companies to quickly adapt to rapid developments in the industry:

Leverages Information from All Relevant Sources

A business that still depends on siloed data structures cannot harness data quickly enough to keep up with the rapid pace of development in the finance industry.

As such, one of the first orders of business for BFSI companies is to invest in a data management system that is designed for the digital age. A modern data management system should be able to store information and make it easily accessible to the teams within the organization. It should also be able to harness data from all aspects of the business, even non-traditional sources.

On top of tracking transactions and customer information, for example, such a system should also offer insights into the pain points of a financial institution’s current workflow. This function makes the system an integral tool for improving and refining the company’s internal processes. With this information, the financial organization can then take steps to improve these pain points and find a workaround for elements that slow down its processes or contribute to its inefficiency.

Assures Integrity of Collected Information

Financial companies must be able to provide complete, accurate, and timely information to their customers and the regulatory bodies that they answer to. Because of this, it’s a must for them to ensure the quality of the information they have collected from all teams and levels within the organization.

This is where it’s important to rely on a modern finance system that can deliver granular information. The closer and thinner one can slice a tidbit of information, the more confident a company can be regarding the integrity of the information it provides its clients.

Data management systems that are backed by digital technology are not only designed to effectively collect data. They’re also able to establish the lineage of each piece of information, track it, and enable different business units to use the same information for their own purposes.

Because of this, it’s much easier for BFSI companies to trace the source of the data that they are using. This, in turn, means the reports that they submit are sure to hold water despite the changes in regulations and customer expectations.

Enhances Security and Anticipates Attacks from Financial Criminals

BFSI companies are not the only ones embracing digital technologies. Financial criminals are also utilizing modern strategies to bypass security systems, and their modes of attack are becoming more complex with the aid of digital technology.

Indeed, these individuals have improved their methods for using a financial institution’s facilities to carry out money laundering, terrorist financing, and other types of criminal activities. That said, part of being resilient in the digital age is ensuring that financial organizations are prepared to deter and detect the movement of financial criminals.

Fortunately, modern financial crime and compliance solutions utilize AI and other technologies to ensure that financial institutions are a step ahead of criminals that may be trying to use their systems. Through the assistance of smart technologies, these solutions can keep track of suspicious clients and transactions, determine their connection to each other, and help BFSI companies anticipate the next strategies that criminals will try to use to bypass their security systems.

Improving Resiliency by Maximizing Data to Deliver Better Business Value

Financial services that can keep up with market changes are able to do so because they can quickly get feedback and react to it. The digital core banking systems they employ are designed to expedite the collection, management, and use of information. Having access to current data makes it easier for decision-makers to steer their organization to a position that will enable it to receive the windfalls of the movements of the market. Instead of fearing change, then, a resilient financial organization can maximize the opportunities presented to them by the changing times.