Digitization touches all aspects of our life. The initial goal which is to create an archive of a physical document now is replacing the physical document itself. You don’t need tons of photo albums to collect your pictures; it’s being replaced by the gallery on your smartphone. There is also no need for making your back to suffer while carrying heavy books;, it’s all digitized to an e-book. Have no time to walk to the ATM to transfer an amount of money? Just let your fingers do the task by using Internet banking. Our lives have been heavily digitized.
In this digital era, we assume that the front runner of this digitization is social media start-ups like Facebook, Twitter, or computer and electronics businesses like Microsoft or Apple. It’s true if we say that all the mentioned businesses are making big success today. But you may be surprised to know that the front-runner of digitization is actually the financial services industry. By digitizing the many processes of documentations and other physical rituals that come with financial services. Financial institutions have successfully ruled digitization by collecting, processing and connecting data on clients and transactions via electronic means.
Based on S+B’s article titled “The Digitization Of Financial Services”, financial services and insurance are recognized to be the most digitized industry in Europe, followed by the automotive sector and then, computer and electronics. Why and how did the financial services and insurance industries make such a huge leap with digitization?
The article mentioned that the financial services and insurance industries face a higher demand for products and solutions, and an increasingly complex economic system, “leading them to offer a wider array of investment strategies and instruments—over-the-counter derivatives. For example—to a global client base. Catering to clients around the world. In turn, necessitates the capacity to handle large transaction volumes. While maintaining the ability to meet disruptive changes nimbly.”
The picture above from a 2015 McKinsey analysis on a comparison between potential threats and potential opportunities for retail banks should they pursue digitization shows that there are several opportunities for the business such as lower operational costs due to the digitization of the transaction and increased revenues from new products, or digital sales. On the other hand, there are potential threats such as increased operational risks. Or new offers from competitors to lure existing customers. However, the potential opportunities seem to outweigh the risks and help to propel businesses into the forefront of their industries. This gives us some rational explanation why digitization in businesses is such an urgency.
Adapted from Connected Futures on “The (Real)Challenge Of Digitization”, here are several biggest challenges on businesses who want to pursue digitization:
Does the executive leadership team understand the magnitude of change that is required? The Chief Information Officer (CIO) need to help their organizations change internally and overcome resistance to change, on both the business and the IT sides.
Human capital and up-skilling the staff:
With digitization comes also the need for more staff who are skilled in the particular area hence there is a need to invest in talented human capital to keep up with the ever-changing trends of digitization.
Physical and logical security
Physical and logical security of company systems and infrastructure as well as keeping information safe.
- The lack of development platforms
To transform our business idea into one that is seamless with digitization may hinder your desire to go big.
boundaries of regulations and standards
Understanding how your business can operate within the boundaries of regulations and standards.
Balancing between short- and long-term goals
May not be easy especially if you are working with a small team. Who do you allocate to work on the main business and who do you assign the job of going digital? This may affect your company productivity.
Delivering to the Business:
Once CIOs understand the business – especially in a complex legacy environment – are we able to deliver on the promises?
The main challenge to transforming digitally is usually a lack of understanding of how the digital process works while optimally especially managing human resources since they are limited.
Digitization is demanding a system which runs everything about the business via a digital process. This requires the handling of IT professionals to solve the problem. The solution needed is an effective and smart solution. Which is not to burden the company in pioneering the digitization of its business.
Qiscus is here, ready to solve your problems through the End-to-End solution. Which we have applied and started on many businesses. We can come up with a set of best solutions for you according to the demands of your business specifically.
Have you experienced this common problem in your business? Or is it more complicated? Tell us your challenge to digitization at www.qiscus.com or e-mail firstname.lastname@example.org and we will come up with the best solutions for you.