By Jim Brill and Jairo Camacho, Oracle
Financial institutions are among the most sophisticated technologists in the world. The importance of the industry’s relationship with technology has been captured by several Tier 1 CEOs who contend, “We’ve become a technology company with a banking license.”
But those same CEOs—and the industry at large—are alert to the forces that are outpacing banks’ ability to adapt to new realities. The combination of low growth, thinning margins, and the potential for higher risk costs are top of mind. Fueled by lower barriers to entry, new competitors are forcing incumbents to rethink their business models. Fintechs, challenger banks, and neo-banks are driving changes in customer behavior that established banks can no longer ignore. And the rise of a myriad of influential technology companies (Apple, Facebook, etc.) has the potential to upend traditional banking relationships forever.
In order to survive and prosper going forward, banks must adapt quickly. They must transform data from stored treasure to shared wealth by extracting value and maximizing the intelligence to be found there. They must become more agile and improve performance by driving down costs and accelerating time to market, processing, and reporting times. And they must become integral—learning from their new competitors to take advantage of innovations in technology to delight both customers and employees.
Earlier this year, Oracle teamed up with the Association of International Chartered Professional Accountants to conduct some groundbreaking research, Agile Finance Unleashed: The Key Traits of Digital Finance Leaders. More than 700 finance executives around the world, across seven industries, were surveyed to identify the essential components of digital finance. Emerging technologies (AI, machine learning, IoT, blockchain and more) and a cloud-first mindset are at the heart of the digital finance operating model. According to our findings, organizations that prioritized digital finance were more likely than their peers to have reported positive revenue growth over the past 12 months.
Still, the majority of finance teams are lagging behind the leaders. Among respondents in the financial services sector:
To keep pace with digital leaders, more financial institutions will need to adopt a digital-first, cloud-first mindset. Cloud ERP offers significantly lower cost of ownership, continuous automatic upgrades, and scalability that grows with your business—but more importantly, it’s a way to outpace change as new technologies continuously emerge.
Join us for a discussion on “The joys and pains of moving ERP to the cloud.” Moderated by by technology reporter Will Hernandez, this American Banker webcast will discuss the potential benefits and challenges that banks face as they consider their move to cloud ERP.