What does it mean to digitalize the financial industry? For us digitalization is about utilizing technology that leads to more efficient operations and processes. It is not a complete replacement of a traditional system; instead, it leverages new technologies to make existing systems significantly better. Furthermore, it is not only about a change in technology but also a change in social, business and economic behaviours.

We do not see digitalization as a trend but rather a cultural revolution in which consumers, businesses and governments behave digitally by incorporating technology to further improve the collaboration between systems, processes, people and the entire business community. It is by meeting the change in demand which makes a digital transformation programme a success.

For banks and wealth managers, simply providing a mobile customer experience with no downtime and faster transactions has become the norm. Other areas, such as capital markets, funds and equity markets, use big data and automation for analysis and high-performance computing to track transaction data within milliseconds. What provides a competitive edge today should not just be services and products, but more simply making your customer’s lives easier by fully leveraging digitalization.

We see far too many financial institutions relying on their legacy brands and goodwill for customer acquisition and retention, missing out on lucrative opportunities that are being opened up through digitalization. It is already a considerable challenge for many long-established financial service companies to pull data from older systems and transition it to modern ones as they have missed vital steps in the evolutionary process. It is because of this that Avaloq has invested significant efforts into supporting such organisations through this digital transition. We achieve this by delivering on four key product focuses.

Firstly, if banking software is going to transform your business, it’s going to have to be built around the individuals who use it. We stay focused on high-value opportunities using design thinking and agile approaches. Facilitating the required creativity, we create cross-functional teams that work together to design and develop our solutions. The teams work closely with our customers to ensure a regular feedback cycle and short communication lines. Mixing agile and design thinking makes sure that our teams understand business challenges rapidly and develop a sense of “why” together with our clients, while uncovering new user insights and ‘problem spaces’ frequently.

We do not use design thinking as a methodology, but rather as a mindset which steers and defines our daily interactions with our clients and within Avaloq itself with a high level of empathy, creativity and a spirit of solving problems.

Secondly, customers are the lifeblood of any financial service business. And that’s why it’s important that you engage with them. In an industry which is based on trust and reliability, successful financial service providers understand that customers want to interact with their peers and learn something of value. They know that their clients are looking for a best-in-class service experience 24/7 – which has never been as easy thanks to technology.

Avaloq is creating a new service experience called Avaloq ENGAGE to help our clients become even more relevant to their customers’ daily activities by linking your banking platform with today’s most used communication channels (e.g., WhatsApp, Line & WeChat). In other words, allowing relationship managers to interact with clients in the easiest and most compliant way possible.

Thirdly, financial institutions are subject to an ever-growing set of regulations, putting immense pressure on staff to comply with each requirement. Non-compliance is not an option. There are currently more than 750 global regulatory bodies and governing businesses in operation, which means that financial organisations are under a microscope. Being and staying compliant is a costly exercise.

As an Avaloq client, you are part of a community whose members pool their experience, swap ideas and solutions and effectively share the costs of compliance. When compliance research and insights are shared across the community, solutions can be found quickly and costs can be lowered dramatically. Our community, together with our in-built compliance standards (e.g. MiFID II), ensure a robust and comprehensive safeguard for our client base of leading financial institutions.

Finally, we believe that, notwithstanding the hype around bitcoin, cryptocurrencies and distributed ledger technologies are here to stay. We expect the technology to directly impact areas such as transactions, risk and assets under management in the coming years. Institutions will need to develop solutions much faster than expected.  

In summary, digital transformation is not just a technology strategy but a business and growth strategy that provides you with agile, quick-to-market solutions built around your customers and fulfilling their needs.