Raghuram Krovvidy
The financial services industry is undergoing a significant transformation driven by digital disruption. The widespread adoption of digital banking & insurance applications has revolutionized how customers engage with their financial services provider. Technological advancements, evolving customer expectations, and increased competition have necessitated a rapid digital transformation within the Banking, Financial Services, and Insurance (BFSI) sector.
The importance of digital assurance in the BFSI sector cannot be overstated. Banks, Insurance, and financial services institutions operate in a highly regulated environment with stringent data privacy and security requirements. Any failures in digital systems or processes can have significant consequences, including data breaches, financial losses, and reputational damage.
Digital assurance plays a crucial role in mitigating these risks. Digital assurance involves testing and verifying the performance and security of digital systems, including applications, networks, and databases. By ensuring that digital systems are working correctly and securely, digital assurance helps to prevent data breaches, and other security incidents, protecting the financial institution and ensuring 24/7 services for its customers.
Embracing Digital Disruption
The advent of digital applications in the Banking, Financial Services & Insurance sector is witnessing a wave of digital disruption, with technology reshaping how financial services are delivered. The emergence of digital banking and insurance applications has created a demand for convenient and hyper-personalized financial solutions. Financial service providers are adopting a digital-first approach, harnessing technologies like artificial intelligence, analytics, blockchain, and cloud computing to meet evolving customer expectations. By effectively digitalizing net banking services and mobile applications, banks deliver seamless and personalized experiences and ensure the security of sensitive financial transactions. By leveraging AI in digital testing, banks can enhance the efficiency and effectiveness of their quality assurance processes. For a US-based 100-year-old financial services client of ours, through our digital assurance services, we have reduced outages by 40%, increased customer experience/ratings significantly, and helped transform their tech stack from on-prem to the cloud with improved quality.
Challenges in the Digital Age
Digital transformation brings both opportunities and challenges to the BFSI sector. While advancements in technology and data offer great potential, they also face sophisticated cybersecurity threats that could jeopardize customer trust and the financial stability of the institution. Financial service providers have invested heavily in cybersecurity and compliance, balancing innovation, and risk management. The role of traditional banks in driving financial technology has diminished, leading to many fintech threatening the position of the banks, thereby driving industry concentration. Nonetheless, banks in high-income economies have become digital leaders, benefiting from a sound digital infrastructure, a strong legal and business environment, and healthy competition. Even developing economies like India have leapfrogged and adopted a national digital stack to deliver end-to-end digital financial services to the user. E.g. the UPI of India has revolutionized payments in India. As it is evident, the complexity of interconnected systems, legacy infrastructure, and regulatory compliance add to the challenges faced by the BFSI sector in the digital age.
The Role & Benefits of Digital Assurance
Digital assurance is pivotal in mitigating the risks associated with digital disruption and ensuring the delivery of high-quality digital experiences. By encompassing comprehensive testing, validation, and assurance across diverse channels, devices, and platforms, digital assurance empowers organizations to proactively address functionality, security, performance, and user experience concerns. Digital assurance is fully automated, ensuring the quick turnaround of services expected in today’s 24/7 financial services works. Financial institutions cannot afford to go out of service even for a short while for maintenance reasons.
Digital assurance enables organizations to proactively identify and address functionality, security, performance, and user experience issues, safeguarding customer trust and brand reputation. Embracing digital quality assurance methodologies becomes imperative for financial institutions to ensure reliability, functionality, and security in their digital applications, setting the stage for sustained success in the face of relentless digital disruption.
Digital assurance offers valuable advantages to the BFSI sector that enhance the customer experience by delivering seamless digital interactions and resolving issues beforehand, leading to higher satisfaction and loyalty. Digital assurance accelerates time-to-market through agile testing and automation, enabling quick and reliable delivery of digital solutions. It mitigates cybersecurity risks, protects sensitive data, and ensures compliance with regulations. It ensures regulatory adherence, minimizing non-compliance risks. Lastly, it future-proofs BFSI operations by adapting to evolving needs, technologies, and market dynamics, fostering innovation, and maintaining competitiveness.
Driving Customer Experience and Enabling Successful Digital Transformation:
The digital landscape has redefined customer expectations in the banking industry. Providing a superior customer experience is crucial for banks to thrive in this age of digital disruption. E.g. Hyper-personalization of banking and insurance products to fit the needs and profile of an individual is the growing trend. Digital technologies and analytics have made hyper-personalization a reality today. To keep this engine running, effective digital assurance services for mobile apps ensure seamless access to data, secure B2B & B2C transactions, and provide an omnichannel experience to the end consumer. Banks drive customer satisfaction and loyalty by focusing on enhancing and personalizing the user experience and increasing the ease of use.
For successful navigation of digital transformation, financial institutions must consider several key factors. Developing comprehensive digital assurance strategies that encompass all aspects of digitalization is crucial. Automating end-to-end functionalities from the project’s outset, focusing on omnichannel experience testing, and hyper-personalized user workflows, accelerating the usage of virtualization solutions, defining cloud testing strategies, increasing overall test efficiency, and embracing emerging technologies are critical steps toward successful digital transformation.
In conclusion, the BFSI sector is undergoing a profound digital disruption, necessitating the implementation of robust digital assurance practices. Ensuring reliability, enhancing security, optimizing the customer experience, and fostering innovation are key areas where digital assurance proves its significance. As leaders in the industry, we must embrace digital assurance as an integral part of our strategic initiatives to navigate the challenges and capitalize on the opportunities presented by digital disruption. By doing so, we can build trust, maintain a competitive edge, and drive long-term success in this dynamic digital landscape.
(Raghuram Krovvidy, Chief Delivery Officer, Cigniti Technologies. Views expressed are author’s own. Please consult your financial advisor before investing.)