This article first appeared in the Autumn 2016 issue of The Record.
Digital transformation holds countless possibilities for financial institutions. At Sibos 2016, Microsoft will be showcasing solutions to help them visualise what they can achieve.
“Financial institutions are grappling with digital transformation,” says Rupesh Khendry, capital markets solutions director at Microsoft. “They’re entering an arena that is focused on reviewing digital transformation more holistically across the business, rather than recasting point solutions.”
Visitors to the Microsoft booth can explore the possibilities for transformation, such as how customer insight systems and advanced analytics capabilities can help them enable rich customer interaction. “Changing technology and the expansion of mobile devices and other channels mean that engaging customers is now about much more than connecting through the devices and channels of their choice,” says Peter Hazou, banking solutions director at Microsoft. “Traditionally, banks have approached the customer experience based on branch and internet banking for example, but clients now expect banks to have a better understanding of their needs and preferences, and to provide a much richer experience by surfacing information and products that are relevant to them. At Sibos, we will be showcasing solutions that demonstrate how banks can gain insights and prioritise next best actions based on advanced analytics and machine learning.”
Empowering staff to collaborate and work more productively has also become an increasingly hot topic for banks. As the workforce evolves, the financial services industry is seeing significant generation and demographic shifts, representing an increasingly diverse workforce with very different motivations and expectations. “Enormous pressures are reshaping business models and causing financial institutions to rethink how employees collaborate in a safe, secure and fully digital way,” says Hazou. “In response, banks have become proactive in addressing digitisation, social collaboration and workflow improvements as a matter of concerted organisational strategy, and office tools have become a hot topic with C-level executives and their management teams.
“Banks need to improve efficiency and drive down costs, to better use internal talent and resources through collaboration, and to compete with more agile, non-traditional industry entrants. They need to get more out of their technology and to make sure it is intuitive, simple and effective so it will appeal to millennial workers. At the same time, cost pressures are driving many banks to move their employees to a home-working or ‘hoteling’ model, and it’s imperative that those people are fully empowered with the full use of office tools anytime, anywhere, and on any device and form factor. Achieving this can be as simple as transitioning to the cloud. By moving to Microsoft Office 365 banks can unlock the cloud’s potential to enable the speed, continuity and agility that empowers their people to work together, at their best, wherever they are.”
Data is the key driver for business efficiency, and Microsoft is investing heavily in intelligent solutions that enable banks to collect, analyse and create intelligent insights from the increasing volumes of data they have. “Data is a key strategic asset,” says Khendry. “When combined with the limitless computing power of the cloud, it enables organisations to innovate and unlock new opportunities, increase their speed of business and lead the industries they are in.”
For many institutions, collecting, analysing and creating insights from data remains a major challenge in an increasingly rigorous regulatory environment. “Risk management and related regulatory compliance is the highest priority for banks and capital markets firms,” says Khendry. “Large amounts of computing power are required to deliver a competitive advantage by creating advanced analytics to meet the business need for faster, more accurate reports, projections and forecasts. For example, large financial institutions expect a 20-fold increase in compute grid capacity needs to cater to the new Basel regulation, Fundamental Review of the Trading Book, which could mean calculating the risk on an exposure or trade 10,000 times. This will have huge ramifications on their compute and related storage needs in the coming one to two years, but by moving this workload to the cloud, financial institutions have the flexibility to scale infinitely at the switch of a button so they can manage their risk and related compute requirements on a pay-as-you-go basis.
“At the same time, institutions are spending significant amounts in efforts to anticipate and understand the likelihood of fraud from their customers through analysing customer behaviour and patterns. Most systems that identify fraudulent activity, such as insider trading, look for it after the fact and throw up a lot of false positives, and institutions need the ability to analyse various patterns, customer holdings and their relationships. That’s where Cortana Intelligence Suite and Azure Machine Learning can play a key part in providing the analytic and artificial intelligence capabilities banks need to help deliver insights and better models, enabling them to better predict and anticipate fraud.”
Visitors to Sibos will see first-hand how Microsoft’s Azure cloud and Cortana Intelligence Suite can enable them to source data across internal and external resources and generate the intelligent insights that enable competitive advantage. “It’s about the art of the possible,” says Khendry. “We will be providing demonstrations focusing on different banking personas to show how the computing power of the cloud and availability of data, combined with capabilities like predictive, prescriptive analytics and machine learning, enable Microsoft and its partners to create intelligent solutions that are personalised, predictive and that augment financial institutions’ capabilities in exciting new ways, so they can drive better business outcomes.”
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