Financial services were created to provide loans to the public market. As economies grew, the sector changed eventually and has been revolutionizing itself. Over the past decades, Fintech companies have redefined their core business model and embrace digital innovations.

If before these companies only focused on payment applications, lending, and money transfers, then now the industry’s reach has extended into more than 30 areas. The trend has transformed from frontline activities improvement to a broad engagement throughout the value chain. The new offerings cut across a wide range of financial services: retail, wealth management, insurance, capital markets, investment banking, SME and Beyond banking.Pursuing digital transformation is a long journey with a lot of challenges: IT projects fall behind schedule, channel conflicts arise, and unexpected regulatory concerns emerge. Typically, fintech also struggles with cultural issues and challenges in recruiting new types of talent. That’s why, cooperating with notorious Software Development companies might be a good solution to solve the problems and bring more value to the market.

Tech-Enabled areas emerging as new norms in BFSI

Many executives understand that digital technology can significantly improve the performance of their current business. They also know that first-movers have a considerable advantage compared to other followers. Digital can give birth to an entirely new business, innovate the sector and transform the whole business. According to Fujitsu’s global survey, 89% of the BFSI companies are working toward digital transformation. These companies also responded that 29% of their projects had already achieved business outcomes.

However, each stage of transformation will have new challenges, and the most haunting question is: Where to start? How to begin?First, executives must work on the internal plan before finding a suitable Software development company to help materializing ideas. Below are some tips to help launch the journey.

Stage 1: Defining value

Businesses must place digital transformation at the core of its agenda. It is not going to be easy. But every long journey must begin somewhere, even on just some piece of paper. Before drafting any plans, CEOs must understand the fundamental importance of management commitment, significant investment and set clear ambitious targets. Another way to think of it is to consider: What is best for your business model and customers? What technology investment would bring the most value? And how much should the business invest?

Stage 2: Launch and Acceleration

It is easy to launch change initiatives, but it is hard to keep them going in the long run. Often companies decide to set up new units, departments, and even a new entity and then assign people & funds. But in most cases, they still manage everything in the old way with their old process. Digital transformation is more than just adopting new technology, it also requires adopting new methods of thinking and applying changes across the entire organization. To kick off this stage, here are some steps that companies should follow:

• Start with light-house projects, which means the projects offer potential rewards with manageable risks.

• Appoint a specialist team: In the BFSI sectors, during the first 18 months of a new project, companies should expect to build a team of 20-100 people. These resources can be either internal or external.

• Organize to promote a new agile way of working: Setting an independent unit will be a good way to start, but the mother companies must also have a mechanism to support it, and set some KPI to measure its progress.
• Nurture a digital culture: a digital culture must concentrate on the customers rather than processes, procedures. The companies must continuously learn and get feedback in order to improve their service quality.

In this stage, if the internal team doesn’t have enough tech experience to handle the tasks, companies can start evaluating potential Software development partners, in order to boost the growth.

Stage 3: Scaling up

At the 18-month point, companies should be making good progress. They should have a handful of initiatives up and running and be starting to capture value. But just when everything seems under control is also the time to supercharge the transformation and do everything on a grander scale. Companies must start with sequencing initiatives for quick return, then building capacities, and finally adopting a new operating model.

Conclusion

Digital transformation is a long journey with plenty of challenges, especially for larger & established companies. It is also vital for the BFSI sector, where the customers become more and more demanding. To get more insight on the transformation, feel free to contact NTQ- a leading Software development company in the field.