As sustainability begins to work its way up the list of priorities held by businesses, many organisations are starting to embrace more sustainable methods of working. In most cases, this translates as utilising technology to not only go greener but enhance operational processes and improve customer experiences.
For the financial services sector, there is still significant work to be done at an industry level to stimulate digital transformation and utilise technologies – such as AI and machine learning – to unlock cost cutting benefits, streamline operations and improve customer experience and overall functionality.
However, as AI and machine learning are still emerging technologies, adoption carries certain cybersecurity risks. With these risks in mind, businesses must ensure that any digital transformation strategy is met with a proportional increase in cybersecurity measures.
This begs the question – how can financial services organisations successfully implement digital transformation while mitigating risk and remaining secure?
The power of going paperless
There are endless benefits digital transformation can provide for businesses, from enhanced customer experience to driving operational efficiency. One of the most valuable components of a good digital transformation strategy is replacing paper-based communications with digital ones.
With a rise in stamp prices and potential reductions to the Royal Mail’s postal schedule on the horizon, embracing digital solutions will soon become a prerequisite for financial services organisations that want to communicate with their customers efficiently. By going paperless, businesses will experience both economic and sustainability benefits – making the switch a no-brainer from an environmental perspective.
As well as this, by making the switch from paper to digital communications, businesses will also be able to improve the categorisation of key customer information. Digital filing systems offer easier access for both customers and businesses and will allow them to access historic data in real-time.
Mitigating cyber threats
With the amount of personal data held by financial institutions, protecting sensitive documents and messages transferred between organisations and customers is critical. A report from the Financial Services Information Sharing and Analysis Centre in 2021 revealed an increase in global threats due to the rapid digital transformation of the financial services sector, which demonstrates a need for businesses in this space to consider cybersecurity during this process.
As more businesses begin to adopt technologies such as AI and cloud computing, it is important to consider the threat actors also leveraging these technologies. A recent report from the NCSC revealed that “AI will almost certainly increase the volume and heighten the impact of cyber attacks over the next two years” and “all types of cyber threat actors are already using AI, to varying degrees”. The ICO has also reported that UK firms have experienced a 30% increase in data incidents between 2022 and 2023, which highlights the need for businesses to invest in the right technology during the digital transformation process, to prevent becoming a victim of the growing cyber crime wave.
Throughout the digital transformation journey, companies need to prioritise two key actions: addressing security vulnerabilities in legacy infrastructure and refining threat detection and response strategies through enhanced risk analysis processes. Secure communications are a fundamental part of cybersecurity strategies for financial services organisations. Organisations must have a focus beyond simply storing sensitive financial data, to implement robust safeguarding measures to prevent any information from being intercepted in transit.
Adopting a people-first approach
Alongside implementing robust safeguarding measures and the right technologies to drive the digital transformation process forward, the UK must also prioritise closing the digital skills gap to stay competitive. It is also important to consider that new solutions cannot be correctly implemented without upskilling and training the individuals involved in driving this transformation forward.
To ensure this is achieved, financial services organisations must appoint digital-savvy leaders to help deliver change and ensure that the right training is carried out across all levels of the organisation.
Having dedicated personnel across all levels of the organisation to coordinate cyber defence protocols will also boost the success rate of mitigating against threats. Research from McKinsey showed that businesses are two times more likely to succeed with digital transformation when those engaged in key management roles have a deep understanding of digital technologies and strategies. Digital-savvy leaders can then use this knowledge to foster an innovative culture that encourages continuous learning and agility, helping to drive digital transformation throughout the organisation.
Embracing digital capabilities is a crucial component of meeting evolving customer expectations, enhancing operational efficiency and unlocking previously untapped revenue streams. Businesses that delay this transformation leave themselves at risk of missing out on opportunities to grow their customer base and may lead to them falling behind their competitors.