Change Everything & Fail: All Change Carries Risk

In a time of widespread acceptance of digital transformations, financial service providers are feeling the pressures to keep up with new digital expectations.

Yet, without the right approach, businesses can easily fall victim to the risks associated with change.

Optimizing a digital transformation goes well beyond the initial implementation. Trying to change too many aspects of a business all at once can ultimately overwhelm a business team, lead to risky shortcuts, and leave a business at the doorstep of failure.

This article explores the necessity of change and how financial service companies can overcome the associated risks. We discuss why the pacing of a digital transformation matters and how businesses can develop a strategic method for de-risking change.

Come along as we dive into the complexities of business acceleration and the critical risks involved.

The Relationship Between Change & Risk: 3 Key Considerations

Digital transformations have taken over the financial services industry at an incredibly fast pace — and as a result, many companies are focused more on just getting a transformation done rather than ensuring de-risking processes have adequate time to be completed.

In July 2021, McKinsey & Company published the report Derisking Digital and Analytics Transformations — a survey of 100 digital and analytics transformation leaders from companies in all industries around the globe. This survey resulted in several key findings, including:

What this survey reveals is that de-risking has fallen to the back burner to leave more room for digital innovation. The problem becomes that risk management requires innovative thinking as well and can spell disaster for companies that fail to address the de-risking needs of their transformations.

With this in mind, let’s look at three key risk factors that affect a company’s ability to change:

1. Avoiding Resource Contention

When you change too much all at once, you end up leaving various aspects of your business competing for the same resources. This results in resource contention, ultimately leading to delays in projects, development, and delivery of products or services.

Solving resource contention can be difficult depending on how many transformations you currently have underway. This matter becomes even more complex if your company does not have a well-defined system in place for monitoring and assessing resources.

To avoid resource contention, key steps to follow include:

• Identifying performance issues that stem from resource contention and which sources are competing for the same resources
• Establishing a baseline that defines how a system normally functions, allowing business teams to better identify where and when problems arise
• Unifying data and increasing data visibility, enabling IT departments or other digital professionals to better mitigate resource contention in real-time

2. Preventing Resource & Staff Exhaustion

If resource contention is left unaddressed for too long, this can lead to total resource exhaustion.

Once resources become exhausted, financial service companies can be left in a tight spot, with many developmental projects left on hold for indefinite periods of time.

Moreover, insufficient monitoring of resources can also lead to staff exhaustion. As business teams struggle to keep up with digital transformation while also trying to manage risk, their attention becomes more thinly spread out, leaving more room for errors.

Circling back to the McKinsey findings, staff exhaustion can be worsened further if resource and risk monitoring tasks are assigned to digital development teams.

Digital development takes tremendous effort and time, making any additional tasks an extra burden that hinders the quality of a development team’s work. This reiterates the need for better distribution of de-risking activities and leads us to our third major consideration — unifying business teams.

3. Unifying Business Teams

When a business team is divided by departments and not provided with the proper channels for collaborating, de-risking becomes immensely difficult.

As Deloitte’s 2022 Banking and Capital Markets Outlook states:

The need for a unified business team is clear when it comes to implementing effective change.

Financial service providers must establish improved strategies for increasing data visibility. Moreover, clear communication between business teams and the ability to easily share data are the key factors that can help a financial service provider to achieve an improved approach to de-risking.

Developing a Strong Plan for Change that Builds Business Resilience

Before diving straight into business change, it is crucial to first assess the needs of your transformation.

A strong strategy for de-risking change must focus on two key questions: what needs to be changed and how are those changes being implemented?

This requires a suitable method that can be incrementally applied over a sensible timeframe to drive economic value. Rather than rushing into change and attempting to transform all aspects of a business at once, financial service providers should instead assess their current infrastructure and determine what to prioritize first — and what risks are associated with those priorities.

When first developing a de-risking strategy, make sure to address the following factors:

Understanding & Utilizing the Transformation Implementation Method

The Transformation Implementation Method (TrIM) was developed by Exadel FS for the very purpose of de-risking change and accelerating growth.

With TrIM, financial service providers can benefit from many key features, including:

• Educational resources on new methods for de-risking
• A platform for tracking risks
• Practical implementations of modern development techniques

The TrIM method focuses on the quality and thoroughness of new projects or implementations, taking an especially close look at the associated risks and how they can be mitigated.

Additionally, by leveraging the TrIM method, financial service providers can also benefit from extra resources and talent. Exadel is a rapidly expanding company dedicated to providing clients with the essential support needed for effective business change.

Final Thoughts: Get Started with Exadel Today

At Exadel, we have the expertise you need to de-risk your business growth.

Accelerating at scale is a tricky task — luckily, Exadel offers a wide range of services and solutions that can help ensure your business has the support needed to succeed, all while mitigating and monitoring the appropriate risks. Our solutions for the financial services industry include:

As we move further into 2023, it is crucial to prevent your business from falling victim to too much change and not enough de-risking.

Talk with the Exadel team today to learn more about how we can optimize your transformations and keep all of your risk-related bases covered.