The COVID-19 pandemic changed the course of the world and its effects are still seen today on economies. As such, the brunt of the black swan event has been borne not only by small businesses but also by famous financial leaders and their organisations across the banking and NBFC sector. To optimise the finance function for the new normal, 2021 has been all about the swift adoption of digital transformation initiatives. Experts now note that this will remain the top priority of finance business leaders in 2022 as well.
According to Gartner, transformational leaders in the financial space are prioritising investment in IT and technology the most. This is followed by directing their focus on mergers and acquisitions, corporate restructuring, product development, and R&D. This trend is set to spill over into the coming year. Additionally, we will continue to see top financial advisors further recommend the reduction of operational costs across finance, marketing, human resources, and other administrative functions via digitalisation and the introduction of AI and automation.
Closer home, if you ask one of the top ten entrepreneurs in India in the financial domain on what their priorities are for 2022, they will more or less incline towards four key trends. Let’s take a look.
Top 4 Priorities of Transformational Finance Leaders in 2022
- Banking upon advanced data analytics in finance
With data being generated at a quick pace, introducing powerful analytics in finance seems the most obvious way for every digital pioneer in finance to create frictionless customer experiences and drive value. Right from a customer’s key financial credentials to their credit history, purchase behaviour, and personal interests, finance players can easily capture a lot of data from the internet, social media, websites, and apps, and process it into useful insights to personalise offerings. Data analytics is also relevant in identifying operational issues and then plugging the holes with digital solutions that drive efficiency and help stakeholders make correct decisions.
- Automating workflow with Robotic Process Automation (RPA) and other technologies
In the name of delivering efficiency, speed and optimised costs, most successful entrepreneurs must continue adopting Robotic Process Automation. Their challenge for 2021 is how to successfully scale it up. One way to do that would be to leverage chatbots, AI, and machine learning alongside RPA to add further nuance and agility to complex and dynamic processes. As per Genpact, companies that adopt RPA can boost their productivity by almost 50%! That will make a huge difference for the financial sector, especially in the Banking 4.0 era.
- Re-skilling employees for the digital age
Top financial advisors all over the world note that merely introducing digital technology will not help. The key is to re-skill and train the existing workforce in the latest tools and technologies in finance. Identifying the most relevant digital skills is also expected to be a key trend that most finance majors follow in 2022. Some of these skills are- data intuition, programming tools, and languages, data visualisation, and data wrangling. Additionally, financial leaders must also reconsider their hiring policies by placing an emphasis on knowledge and experience of digital skills.
- Ramping up digital investment review and governance across the enterprise
Given that investment made towards digital acceleration might fall outside traditional budgets, every digital pioneer in finance will have to figure out a way to review and manage the same more effectively in 2022. This will also help them align their teams and divisions with core digital business performance ethics and set the expectations right.
It is the emphasis on all the above-mentioned trends that makes transformational leaders stand out from the competition. A good exemplification of this is Sanjiv Bajaj, the leader at the helm of Bajaj Finserv. As one of the most famous financial leaders in the country leading Bajaj Finserv forward, Sanjiv Bajaj has been early to adopt machine learning, AI models, business intelligence, RPA, and data analytics across all consumer lifecycle stages. This has not only shot up customer acquisition and cross-selling for the company but also augmented propensity management, risk management, collections management, and customer service by leaps and bounds.
A key part of Bajaj’s digital transformation strategy is rapidly scaling the talent pool across critical domains such as tech, analytics, and data science. While the managers are enabled and empowered with data and tech platforms, the HR function helps in ensuring governance, enablement, and a cultural shift. Productivity apps for sales, merchants, collections, and partners are also being developed to bolster the efficiencies of employees. With 2022 drawing nearer, Sanjiv Bajaj is taking digitalisation to the next level by announcing the arrival of an all-in-one lending platform, digital platform, insurance platform, investment platform, and an e-commerce platform for its consumers and retailers.
In 2021, 92% of India’s top finance business leaders have stated that they are already on their way to implementing digital interventions in their business. However, the survey from EY also states that only 11% of them have reached an ‘advanced’ stage of implementation. This leaves them with a lot of room for improvement in 2022.
In that regard, it is reasonable to expect that most successful entrepreneurs in finance will be the ones who follow the above-mentioned four key trends for 2022 with great clarity of vision, and prioritise their journey towards digital transformation and Finance 4.0 above all
Ever since COVID-19 shook the foundations of the finance industry, ‘digital transformation’ has become the main buzzword. So far, transformational leaders across global finance and in India have been able to respond to this disruption by ramping up the scale and efficiency of their digital business performance with aplomb. While 2021 has been more about dipping one’s feet into the water and figuring out the way forward, 2022 promises to see a rise in four key trends that will allow famous financial leaders to not only shape the next year of finance but the entire Finance 4.0 journey. This article takes a view of these major trends and why financial leaders must prioritise them.