Sam Wilson, UK Country Manager at Serviceware, discusses the path to achieving growth and innovation required of the financial services sector to accommodate the needs of both customers and employees.
Working practices changed radically in 2020, but not just for the lockdown period – working from home has become the ‘new norm’ for many employees. It is expected that hybrid working is likely to be the dominant model in organisations for the foreseeable future, especially with working from home being a lifeline and an important enabler for businesses that are weathering the energy crisis. According to statistics average cost of occupying a new build office in the UK rose by 1.2% over the 12 months to June 2021 to just shy of £80 per sq ft. With no energy price cap for businesses and government support not expected to arrive for some time, this figure is expected to significantly increase. As a result, businesses could ask staff to work from home instead.
Even before the energy crisis, employees from a wide range of industries were keen to continue to work from home following the wake of the COVID-19 outbreak in early 2020. In fact, 42% of all IT decision-makers and 38% of business decision-makers in the financial services sector believed that half (50%) of their workforce will remain hybrid post-pandemic, according to Riverbed’s Hybrid Work Global Survey 2021. While it is no secret that workers have become accustomed to the convenience and flexibility of remote working, hybrid working comes with a new set of challenges for many business leaders.
Even before the pandemic, the financial services industry was under increasing pressure from its customers to deliver greater speed, convenience and personalisation by embracing digital innovation.
Many organisations in the industry that had previously relied on legacy systems have had to completely restructure their services to cater for both existing and rapidly evolving customer needs. Previously the sector relied heavily on face-to-face interactions to build meaningful customer relationships, but we are now seeing these appointments being carried out virtually. Yet, many major commercial and retail banks that embraced remote work during lockdown have now committed to permanent hybrid set-ups. Lloyds Banking Group has decided to embrace hybrid working, following a survey where 77% of its employees said they wanted to work from home three or more days a week. In 2021, the bank announced that it would reduce its office space by a fifth (20%) over the next few years.
Similarly, Deutsche Bank is implementing a hybrid working model that enables staff to work remotely if they choose to do so.
James Von Moltke, Chief Financial Officer and Member of the Management Board at Deutsche Bank, said: “Innovation is a vital element of the way we work. We’re fostering a spirit of innovation as we build the Finance function of the future, working in more agile ways to drive efficiency and deliver change.”
How IT must adapt to power the future of hybrid working
The shift to remote working has demonstrated that on-premises, legacy IT systems are no longer suitable for the needs of many modern businesses, particularly those in the finance and banking industry.
Over the past two years, businesses and IT leaders have had to quickly accelerate their Digital Transformation efforts, while reassessing their workplace investments, resources and priorities to ensure they can meet current and future hybrid working needs. As hybrid working cements itself across financial services, CIOs must adapt accordingly to help their teams remain fully operational and productive. At the heart of striking the right balance is putting the right technology solutions in place. CIOs should take the time to review their interim solutions and assess what their business needs are.
The cloud is perhaps one of the most popular solutions for the financial sector when pursuing innovation with financial institutions already using cloud-based software for business processes such as customer relationship management (CRM), human resources (HR) and financial accounting. Moving to the cloud has several benefits such as reducing internal costs, the ability to scale up quickly and improved data management with no more siloed systems. Growing demand for cloud among enterprises is coming on the back of rapidly evolving customer expectations and we expect this trend to continue in the next few years. According to The Future of Cloud in Banking report, the majority of retail and commercial banks aim to triple their use of cloud services by 2025 and migrate more client-facing applications and data.
For the CIO, driving the business to compete in the market, it’s essential to understand the value of all technology investments – legacy, new and purchased directly – to establish their role in the digital-first world. Financial management tools are vital in enabling businesses and leaders to uncover the truth about IT costs and make smart financial decisions for new ways of working. They not only allow organisations to make fact-based decisions around IT spending based on informed scenario planning, but they also free up liquidity that can then be invested in new digital initiatives.
Digital innovation must start at the core
Hybrid working is revolutionising the world of work and the reality is it’s here to stay. Now, more than ever, rock-solid IT infrastructures and technological innovations that unlock value are crucial for businesses. Cloud usage increased massively due to the flexibility, scalability and speed of deployment needed to pivot business operations. By leveraging technology, financial services businesses can put human relationships and customer experience at the centre of a digital strategy.
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