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Six Frameworks for Financial Services Modernization

Financial Services

April 17, 2024

In today’s rapidly evolving landscape, technology presents unprecedented opportunities for financial institutions to serve their customers better. Core modernization in financial services isn’t just about upgrading systems—it’s about enhancing operations and maximizing margins; it’s about reimagining processes and workflows. By embracing modernization, institutions can improve efficiency and witness substantial returns on investments. By revamping financial services applications, systems, and procedures, institutions can elevate customer experiences, streamline operations, and accelerate product innovation. Join us as we explore the imperative for modernization in financial services, uncovering its myriad benefits and the key technologies driving this transformative journey.

Opportunities in Modernizing Financial Services

Modernizing financial services is imperative for organizations to transition to a secure, efficient, and effective operational model. With changing times, the focus is on delivering innovative products and services to meet evolving customer needs.

1. Legacy Systems

Financial institutions often rely on legacy systems, which face high demand. Through modernization, these organizations can unlock opportunities for enhanced performance and agility. Modernization improves the turnaround time vis-à-vis opportunities and enables faster time-to-market for new products and services. This ensures swift adaptation to evolving customer needs and market responsiveness.

According to a Gartner survey, 61% of respondents identified technical debt from legacy systems as a moderate challenge, with 91% highlighting its impact on agility and delivery speed as the most common issue.

2. Data Management

Modernization offers the chance to harness the power of data. By integrating disparate data sources and implementing robust data governance strategies, organizations can gain comprehensive insights, drive informed decision-making, and capitalize on data monetization opportunities to unlock new revenue streams.

3. Serving Internal and External Stakeholders

Modernization unlocks opportunities for enhancing customer experiences through advanced technology. Through modernization, financial institutions can elevate engagement with both internal and external stakeholders to the next level. By enhancing self-service capabilities and streamlining processes, organizations can foster stronger relationships while reducing operational costs.

4. Improving Operational Efficiency

Modernization presents an opportunity to revolutionize operational efficiency and effectiveness. By adopting modern tools and techniques, financial institutions can streamline processes and workflows, maximizing output while minimizing manual efforts. Automation reduces human intervention, mitigates risks, and ensures rule-based consistency, leading to enhanced operational performance and error reduction.

Achieving these outcomes requires a strategic approach, collaboration, and a commitment to innovation.

What Is Financial Services Modernization?

Financial services modernization entails leveraging technology to overhaul legacy systems and processes, fostering a data-driven environment. This transformation optimizes operations, enhances customer experiences, and ensures end-to-end transparency.

How Does Modernization Serve the Purpose?

Modernization brings forth fresh opportunities to conduct business in a highly efficient manner by leveraging new technologies. It enables financial institutions to adopt innovative approaches and enhance existing practices for improved outcomes. By investing in modernization strategies, financial institutions can reduce technical and operational debt, gain control over data quality, enhance customer experiences, improve service level agreements (SLAs), and create avenues for new service offerings. This provides much more control over the quality of your data, from acquisition to consumption, using organization-level taxonomy and data governance.

For example, modernization tools such as Hexaware’s Amaze® for Modernization platform can help businesses reduce the cost of operations and enhance scalability by moving data and on-premises financial services applications to the cloud.

How Hexaware Can Help Modernization in the Financial Services Industry

Hexaware’s proven framework is your organization’s secret to building its digital core. Our cloud adoption and customer experience enhancement solutions, composable architecture framework, and transformation levers will help your business leverage financial services modernization to take its processes to the next level.

Hexaware’s 6-point Framework for Financial Services Modernization

1. Amaze® for Modernization

Facilitating cloud migration and application cloudification. Amaze® for Modernization enables the seamless movement of data and cloudification of applications, thereby enhancing scalability and reducing technical debt and total cost of operations (TCO). This allows businesses to maintain a competitive edge in the market.

2. Composable Architecture Framework

Empowering innovation and go-to-market acceleration. The composable architecture framework enables financial institutions to add new products and services seamlessly, monetize data, and capitalize on new revenue opportunities. Adopting a composable architecture approach enables organizations to break down processes into component levels, facilitating the seamless integration of additional components to meet evolving regulatory requirements. This proactive approach not only ensures compliance but also enhances operational efficiency and agility.

3. Enterprise Data Management Framework

Ensuring data monetization and customer satisfaction. The enterprise data management framework establishes robust data management and governance practices, ensuring data quality from acquisition to consumption. By enhancing data quality, organizations can identify and resolve revenue leakages, unlock opportunities for data monetization, and grow their market segment into new areas of business. Leveraging customer data and analytics enables institutions to tailor products and services to individual preferences, fostering satisfaction and loyalty and driving business growth.

4. Process Mining and Operations Transformation Framework

Enhancing operational efficiency and standardization. End-to-end visibility of processes and data results in increased transparency and efficiency, improved operational agility, and optimized resource utilization. Process mining can identify revenue leakages in the form of additional services that are being offered unnoticed, which can become potential products or services. Modernization also helps to pinpoint inefficiencies and discrepancies in processes, such as unavailability of data on time, optimize operations, and maximize revenue potential.

5. Customer Experience Excellence Framework

Facilitating faster revenue realization and enhanced customer experience. By accelerating client onboarding and ensuring timely and accurate communication, organizations can enhance customer satisfaction and strengthen customer relationships. Modernization empowers financial institutions to offer customers personalized and seamless experiences through omnichannel access to services.

6. Generative AI-powered RapidX™ Solution

Enabling de-risked application modernization. Our generative AI-powered RapidX™ solution facilitates the modernization of complex and heterogeneous IT applications. It helps with faster analysis of code and project proposals by automatically generating business requirement documents (BRDs), process flows, and design specifications. App modernization can accelerate the development and launch of customized or new products and services. This accelerated go-to-market translates into faster realization of business.

By embracing modernization strategies and leveraging advanced technology, financial services organizations can position themselves for long-term success.

Business Benefits

Partnering with us unlocks opportunities for end-to-end visibility of processes and data and identifying revenue leakages, leading to reduced technical and operational debt. Our solutions accelerate product innovation and enhance client servicing, ensuring that financial services institutions stay ahead of regulatory compliance requirements. Depending upon your current organizational setup, this can translate into improvement in the bottom line by up to 20–25% and a 30–40% increase in efficiency. Through our financial transformation services, we drive innovation, cut operational costs, and bring prosperity to our clients and their customers.

To learn more about Hexaware’s core modernization services for financial institutions, download the flyer.

About the Author

Bhupendrakumar Panchal

Bhupendrakumar Panchal

Bhupendrakumar Panchal (aka Bhupen) is a Project Director for Hexaware’s Financial Services vertical. Bhupen is a techno–functional expert with 28+ years of industry experience, predominantly working with the financial services client across the globe. He has passed CFA- level 2 and has excellent understanding of the Capital Markets domain. He has donned the consulting & advisory hat with large Investment Banks, Asset Managers, Fund Managers, Transfer Agencies, Index Providers, Custodians, Private Wealth Managers, Retail and Corporate Banks.

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