DigitalTransformationTalk: Rethinking the digital transformation of your Finance function

On 4 June 2024, Digital Transformation host Kevin Crane was joined by Hooman Razavi, Data Scientist and AI Researcher; Yemi Oluseun, Agile Project Programme Manager - Growth, Global Expansion & Digital Transformation Projects, The Change Hive; and Vijay Anand, Head - Digital Payments & Payments Processing, Mastercard.

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“Firms are becoming more focused on strategy and execution around their purpose,” says Susan Entwisle, an associate partner at EY Digital and Emerging Technology. The challenge is to gather and apply insights from data to deliver value through ever better customer experiences. The big challenge in the financial sector is to take data sitting in legacy systems and transfer them to data bases where insights can be gained from them while also complying with data protection laws. Meanwhile, financial institutions are moving to the cloud cautiously, but first they need to find out whether this strategy aligns with their risk appetite. So, although the sector is behind the curve in cloud service adoption, it is for the right reasons. Another challenge for banks is to create one-stop financial apps, where their clients can sort out a wide range of payments and banking services. With open banking becoming more widespread, incumbents can focus on core services, while fintechs can offer a wide range of B2B2C services on a global scale leveraging banks’ open platforms. The prevailing trend is that payments become embedded in the shopping experience and take place in the background via integrated systems. 

Cyber threats and other risks that digital transformation projects must address

The focus has recently shifted somewhat from deploying technology to combat cyber threat to educating employees and all stakeholders about them. A new approach that can considerably increase a workplace’s exposure to cyber threats is security by design, where security is embedded in a software system right from the start. Regulation can be a great driver of innovation in security. Data analytics is a crucial component of assessing cyber risk with regards to operational costs, reputational risk, lost opportunities, recovery expenses and regulatory fines. Businesses going through a digital transformation have a wide range of advanced AI tools to measure and mitigate cyber risk, such as automated threat detection, risk assessment and prediction, as well as fraud detection. Clear communication about the goals and purpose of digital transformation and showing what the end state is going to look like is key for management in order to avoid scare mongering and resistance to change among the workforce. Staff always need to be educated on what comes next and how changes will impact them. Although reskilling of workforce that became redundant thanks to AI sounds like a great scenario, not all employees are upskillable. However, we can see examples such as Mastercard’s, where it is a common practice to have discussions with employees regarding the skills – both hard and soft -  that their changing roles will require in the upcoming year.  In this new setting, big tech companies have set up their own academies where focus is on hands-on technological skills, and the degrees they offer are on a par with bachelor degrees awarded by universities. On the other hand, employees increasingly need to take ownership of their own careers. If the employee’s objectives are misaligned with where the organisation is progressing, it’s a good idea for the employee to manage their upskilling or make a career switch. 

The panel’s advice

• You need to juggle at least 4 balls at the same time – compliance, your customers, making sure you’re carrying your people along and remaining up to speed with technology.
• Invest in AI tools to automate work processes, such as invoice processing and financial forecasting  and use the vast amounts of available data for better decision making and risk management.
• Make sure your people, processes and technology are aligned.