Business
The Cost of Technology: How Financial Service Providers Can Accelerate Delivery
“It takes too long and it costs too much.”
If you work in the financial services industry, you have undoubtedly heard these words spoken about technology investments. Perceiving technology as being neither cost-effective nor time efficient is a common complaint among business leaders — yet, technology is the future of our industry.
Despite ongoing global economic uncertainty, technology investments are showing no sign of slowing.
In 2022 alone, banks and investment firms were projected to spend a total of $623 billion (USD) on technology investments. IT services — such as consulting and managed services — are expected to be the largest portion of tech spending, accounting for roughly $264 billion of the total spent.
As the financial services industry continues to become more technologically diverse, businesses in the industry must optimize their investment approach. While all technology investments come at a cost, the right strategy can help cut overall spending and improve the efficiency of implementation.
This article explores the challenges of technology, especially in terms of cost-effectiveness and time commitment. Keep reading as we delve into how financial services companies can accelerate delivery.
Why Do Technology Investments Lack Efficiency in Financial Services?
Technology is complex — no one denies that.
When employing technology in the financial services industry, this complexity intensifies due to required compliance activities, risk management, and other key factors.
As a result, investing in new technologies can be expensive, while finding the necessary professional talent to implement these technologies is immensely difficult.
A major part of the issue when it comes to investing in innovative technologies is a lack of organizational consensus and business unity. When a financial services business team is not united under a common objective, the use of technology can become fragmented and inefficient.
Furthermore, siloed data can cause massive problems when using technology, as the business as a whole cannot gain a holistic, complete view of its operational health and performance.
This can affect all aspects of a financial services business, especially regarding the return on investment (ROI) of a particular technology.
In turn, business leaders end up identifying the technology as the problem, rather than their business approach to implementing and employing the technology. At its core, technology is a neutral resource — how effective or non-effective it comes down to business strategy.
The Auto-Manufacturing Method: Seeking Solutions Outside the FS Industry
To understand the flaws in the financial services industry’s approach to tech investments, the key might just lie in examining the successes of other industries.
For instance, the auto-manufacturing industry has optimized its approach to production by ensuring the cost of change for all parts and product components is known and well-documented.
The cost of change refers not just to the cost of the part itself but also to the costs associated with the installation and maintenance of this part. Likewise, in the financial services industry, the cost of change must account for the costs of implementation and maintenance of new technologies.
To illustrate this, imagine a financial services business that is migrating its infrastructure to the cloud.
If this business already has all the physical infrastructure resources, switching to the cloud can present hefty upfront implementation costs. Yet, over time, this migration to the cloud can result in greater operational efficiency at the business level, which saves the company more money in the long run.
Moreover, the cloud is easier to adjust when changes are needed compared to a physical on-site infrastructure. The cloud allows for a vast range of integrations that make it cheaper for financial services companies to adopt and implement new products or services.
Along with cloud technology, solutions such as DevOps, Microservices, and CI/CD (continuous integrations and continuous delivery) make it possible for the financial services industry to truly reduce the cost of change associated with innovative technologies.
Accelerating Delivery by Addressing the Implementation Challenges
Once a new technology is fully implemented, solving issues that arise can be more complicated than if those issues were found and addressed during the development and early implementation phases.
As such, one of the key steps for financial service companies to take when investing in new technologies is to address implementation challenges head-on.
Here are three ways to boost the cost and time efficiency of tech implementations to accelerate delivery:
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Build Better Business Unity with DevOps
As we have discussed, business unity plays a vital role in the effectiveness of technology investments in the financial services industry.
To ensure business unity and organizational consensus are prioritized, financial services companies must adopt a DevOps method for tech implementations.
DevOps is a method for delivering applications and services that focuses on unifying a business’s development and operations teams. Too often, development and operations departments are disconnected from one another, making it near-impossible to enable continuous delivery of products and services.
With DevOps, these departmental silos can be eliminated, making it easier for development and operations teams to collaborate on new tech investments. These teams can then inform each other of any functional problems or budgetary conflicts as they arise, resulting in real-time problem resolutions.
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Embrace Specialized Technologies
The financial services industry has been evolving at a rapid rate, especially since the Covid-19 pandemic accelerated the use of digital services and solutions in the industry.
As a result, there are more specialized technologies available to financial service companies than ever.
Specialized technologies — such as Industry Clouds designed to meet the needs of a specific industry — can help to reduce the overall costs of new tech investments by making them easier to implement and integrate into an existing system.
Moreover, specialized technologies can offer much greater time efficiency as well, enabling DevOps teams to optimize the development and implementation of new products and services.
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Partner with Experts
Finally, the third way that financial service providers can optimize their technology investments to be both time-efficient and cost-effective is to work with an experienced managed services company.
Managed services experts offer many key advantages that can greatly enhance technology implementations
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Ongoing Support
Ongoing support is a crucial pillar of success for any new technology investment. This is particularly important for financial services providers who have small internal IT departments that may not have the time to train an entire business team on how to use a new technology. With the help of a reliable managed services partner, business leaders can ensure their technology investments are being put to the best use possible.
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Technical Expertise
One of the major complaints of business leaders when it comes to technology is that it takes too long to get up and running. The right managed services partner can eliminate this problem thanks to the in-depth technical expertise the team brings to the table. Managed services companies are often cross-focused on both efficient implementation and thorough risk management, safeguarding your implementations from any compliance or risk-related issues.
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Resource Augmentation
While time efficiency is certainly a top concern among business leaders, so is cost-effectiveness. A worthwhile managed services partner can provide financial service companies with staff and resource augmentation to reduce the cost of not just implementation but also maintenance of new technologies. Meanwhile, business leaders can worry less about resource costs, as the managed services partner will offer transparent overviews of costs via augmentation.
Align Your Business Strategy & Technologies with Exadel
We’ve discussed the technical and personnel aspects of technology that can inhibit accelerated deliveries.
Now comes the challenge to business leaders: Are you prepared to change your mindset to achieve a more affordable and efficient approach to tech investments?
The financial services sector is quickly becoming a digital-first industry. To remain competitive in the coming years, having a solid approach to adopting innovative technologies is of the utmost importance.
Here at Exadel, we offer a wide array of services that can help you reach this new horizon. Along with providing you with the consultative support you need to change your budgeting methods and adopt a more effective cost-of-change approach, we also provide services for:
Product Engineering & Platform Development
Digital Experience Optimization
Data Intelligence
Ongoing Support & Managed Services
Aligning your business strategy with your technology investments takes time and effort. Through a partnership with Exadel, our team helps ensure your new technologies go live as quickly as possible via reliable and secure implementations.
Plus, we have deep industry experience in both finance and technology, giving you the expertise needed to drive industry-specific solutions.
At Exadel, we are more than just experts. Our team strives to offer clients the best possible digital transformation and product engineering services available in today’s market. Exadel has locations spread across the Americas, Europe, and Asia, giving us the global scope to service companies worldwide.
Ready to talk? Get in touch with the Exadel team today to learn how we can help you accelerate your deliveries.