The Finance Sector Is Going Through A Massive Digital Transformation, And SaaS Companies Need To Respond Appropriately

CEO of Rookout. Has led data-driven businesses, products and R&D teams over the last two decades, from startups to government organizations.

You can’t go a day without hearing about “digital transformation.” The simple truth is modernizing tooling and workflows have been goals of the finance industry for a decade now, but as technologists and engineers, we need to be sympathetic to just how difficult digital transformations are to go through.

Banks have applications responsible for trillions of dollars in revenue. So it’s more than just “If it’s not broke, don’t fix it.” It’s actually “Even if it’s broken, still don’t fix it” due to what’s at stake if something goes wrong. These are massive applications often held together by glue and patches, where one false move can cause a lot of damage.

But today, in the midst of the pandemic, digital transformation initiatives are being prioritized and expedited. The PwC US CFO Pulse Survey asked finance leaders which programs they wanted to protect versus cut. Programs that were firmly in the “protect” camp were customer experience, cybersecurity and, you guessed it — digital transformation. And according to a survey conducted by the analyst firm Forrester, companies that were successfully adopting new technologies were earning 3.5 times more than their counterparts.

The reasons are straightforward: People are doing more online than ever before. Whether depositing a check or applying for a loan, customer expectations have changed, and young, new challenger banks and applications are forcing more traditional institutions to modernize. Banks are closing physical branches, deprecating paper-based systems and, ultimately, embracing more digital ecosystems. 

So the question becomes: What roles should SaaS companies play in helping with the digital transformation of these legacy systems? As the CEO of one myself, I can tell you one thing for sure: If you think all these companies are moving to distributed architectures and microservices and containers tomorrow, you have another thing coming. My main issue with my industry today — what one may call B2B SaaS — is that it does a great job of painting the future but doesn’t reach a hand out to help companies get there.

If we are to be truly enterprise-grade solutions, we need to understand enterprise problems, concerns and requirements. We need to not only offer solutions that work in the cloud, but also hybrid solutions that can help bridge the gap. We need to build in very granular security controls. We need to get the right certifications. And we need to surface relevant data on demand. 

According to a recent report from Deloitte, “Leading organizations will be operating with a new mantra: There is no close. You’re not forecasting once a month or quarterly. It’s all happening in real time. Many finance cycles today are driven by technology and data-processing limitations. Things happen on a regular schedule because that’s the only way they can happen. When information becomes instantly available to those who need it, traditional cycles become unnecessary. That frees people up to focus on discovering new insights and acting on them.”

The benefits of digital transformation touch everything from the customer experience to profitability. As SaaS providers, we need to help these large financial institutions align and integrate their data so they can capture the full value of digital transformation. It’s time-consuming and tedious work, but the truth is that the SaaS companies that will be lauded in the future will be the ones that reached out a hand instead of acting like the future is already here.

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