The future leaders in auto and equipment finance will be those who make strategic investments in digital transformation, platform modernisation and capability development to attract a new kind of customer and stay competitive in a rapidly evolving industry.
Based on extensive experience, we have identified four keys that are proven to successfully help top lenders and lessors to achieve exactly that.
Getting the data right
Your lending and leasing software platforms are the engine of your business. Put the wrong fuel in your engine, and your business will go nowhere.
The following six steps will help organisations to get clean data into its system and prepare them to receive data generated by consumers and channel partners:
- Identify: Comprehensively audit and aggregate all data sources for uploading into the new system
- Analyse: Take the time to understand the complexity of the data and what makes it different from other industry segments.
- Retool: Legacy data structures may have to be adjusted to fit decentralised finance before it can be uploaded
- Maintain: Establish change management and resource training and readiness plans with quality assurance and control capabilities
- Convert: Design a plan and validation approach that will enable conversion of data with minimal business disruption
- Unlock: Apply advanced analytics to gain purpose-driven and actionable business insights from the data
Creating processes that create value
In theory, there are virtually infinite variations of business processes, but in practice, refining processes for the purposes of modernising a platform can be split into three key groups.
Standard processes
These processes can be thought of as commodities that are built on universally accepted, industry-leading practices and require minimal customisation. In our experience, they account for ±80% of all processes at a typical financial services organisation.
Differentiating processes
These processes are not key strategic advantages for an organisation, but still differ from industry standards. One such example, is organisational design. Differentiating processes account for ±15% percent of a typical organisation’s processes.
Innovative processes
These are the processes that form a business’ x-factor and are almost always the source of strategic advantages. Roughly 5% of processes fall in this category.
Integrating innovative processes with the new platform is not necessarily easy but has the potential to yield significant business results. We recommend using design thinking to take the customer’s view and create new value.
Solving the technology equation
Selecting and implementing the right technology is about taking an ‘open banking’ approach that balances off-the-shelf capabilities with custom solutions.
In fact, most requirements can be met with a low-cost, off-the-shelf software package. Custom software development only becomes necessary for strategic capabilities that differentiate your business.
We call it the ’80/20′ approach, because roughly 80% of required capabilities can be acquired off-the-shelf, and only the remaining 20% calls for customised development. The 80/20 approach helps organisations reduce IT costs but applying this rule can be more challenging than what meets the eye.
We take a co-creation approach with our clients to help focus attention on their technology needs and determine the best use of technology resources. We run design workshops to produce a solution blueprint and a business process inventory that collectively guide future development decisions.
Managing change for the better
The worlds of work and financial services are changing quickly. Interestingly, our latest Future Banking Workforce Survey indicates that 67% of C-suite executives in financial services agree that AI will be critical to their organisation’s ability to differentiate in the market.
Yet, only 25% say their employees are ready to work with intelligent technologies, and only 3% plan to significantly increase their investment in training and re-skilling programmes over the next three years.
Financial services institutions now have an opportunity to set new benchmarks for customer and workforce experiences, a change that not only serves their best interest, but that is much needed.
To plan and execute a journey that makes change happen with the organisation and not to the organisation, we recommend the following four steps:
- Forge strong alliances: The change leaders across the enterprise, are the people steering the ship and they must agree on where it needs to be and the best way to get there.
- Understand the mindset of employees: It is critical to know how they feel about the change instead of relying on wishful thinking or impartial data. While it may be tempting to cut costs by avoiding research, it could prove a lot more expensive in the long run.
- Take an audience-centred approach: Assess what each aspect of the change will mean for each stakeholder group and plan accordingly.
- Use insight-driven tactics to manage the change: While doing so, be sure to maintain a bias for proactive dialogue and early intervention.
Any change management strategy is only as good as its capacity to detect and adapt to the unexpected. These steps will help create an agile, predictable, and sustainable change process.
In conclusion
Getting the data, processes, technology, and change management strategies right will determine the success or failure of your platform modernisation.
Essentially, making strategic investments in digital platform modernisation is not only imperative to building a flexible organisation that can better adapt to the ever-evolving market landscape, but it is also necessary to keep on creating relevant and personalised offers to clients, in the moment.
Kirtan Sita | Managing Director | Technology Practice | Accenture Africa | mail me |