The problem is that the financial services industry is hobbled by behemoth legacy systems that make transformation difficult. Data is more often than not stored in silos — disparate, disjointed, and disorganised systems. If upgrading these legacy systems or migrating data was easy, digital transformation would have been a no-brainer for financial institutions and they would have undoubtedly been ahead of the curve. But this is not the case. A ‘rip and replace’ style switch-over is highly risky, and piecemeal add-ons just make the infrastructure more complex.
Traditional financial institutions have gargantuan amounts of data, which gives them a head start over their rivals. But their ability to interpret and extract real value from their data is something they have always struggled with. With new regulations and more competitors, they will need to rapidly change their data management strategies. The Competition and Markets Authority (CMA) and the European Union directive PSD2 are driving change to Open Banking.
That will make it much simpler for customer data to be shared between banks, customers, and third party providers, which will trigger the development of new innovative financial products and services. Financial institutions have a golden opportunity to use their vast data chests to dramatically improve the customer experience.
Harnessing more value from data
Data is a central commodity to the digital economy. It is the route to establishing an accurate picture of customers and their behaviour, enabling personalised information to be shared in an appropriate and timely manner, and creating new revenue generation streams.
One of the big headaches with legacy systems is that they lock valuable data and content away in repositories that are not easily accessible by the people who need the information. Our research found that 75% of organisations believe getting access to this information hived away in legacy systems is vital. Knowing that is one thing — actually easily accessing this data is another.
Traditional financial institutions must learn to utilise their data effectively and transform themselves into data-driven organisations for smart decision-making.
This very modern problem requires a modern solution in the form of a Content Services Platform (CSP), which brings a whole new approach to managing legacy systems. Instead of taking the radical approach of ripping out old systems and replacing with new ones - which is time consuming, costly and risky a CSP enables you to optimise your data management to deliver a richer customer experience, enhance organisational efficiencies, help meet compliance requirements, and boost your bottom line.
Supporting Big Content
So called ‘Big Content’ is often overlooked in data management strategies, but it is a critical and growing challenge for financial institutions. Systems no longer just house static documents, they need to manage a plethora of data types — video, images, audio, and social media. You will find that many insurance claims today, for example, include video and images taken from mobile devices. For organisations looking to provide an enhanced customer experience, they must be able to efficiently manage big content.
CSPs can cope with this exponential growth in the volume of data and file formats, and easily integrate traditional and rich content into the mainstream business processes. In addition, CSPs are so called ‘repository-neutral’. They connect to existing business systems and content repositories, such as other ECM solutions, file share apps, CRM and ERP systems, and other business applications. CSPs are personalised, scalable, and connected — but as the dynamics of business changes — they are flexible enough to adapt accordingly.
And once the connect phase has been successfully executed, there is the ability to review how various pieces of the information management toolkit are actually necessary and retire the others, delivering significantly reduced total cost of ownership (TCO) moving forward and removing both the risk and the business impact.
CSP: the key to modernisation
Information management challenges for financial institutions are very real and sizeable. In a data-led age where mobile apps, online and self-service financial services are becoming the norm, financial institutions must re-think their data management strategies and technology stack to survive and thrive.
The sands are fast shifting and if financial institutions are to hold their own against challenger organisations what are adept at customer-centric service, they must look at modernising their legacy systems with a CSP to transform and prosper. Those that haven’t started the transformation journey are facing a very uncertain road ahead.
David Jones is VP of product marketing at content services platforms supplier Nuxeo
Download our e-book ‘From Legacy to Leverage – Modernizing Information Management Systems’ here