Getting back to growthHow the latest technologies can help drivegrowth in Canada’s financial services industry
The global economy is bouncing back and financial services                             businesses in Canada are renewing t...
Social mediaAttract new customers and talent –if you know how to use itFinancial services institutions are taking an incre...
Mobile devices                             Create opportunities for new                             value-added products a...
Business analyticsTurn business data into valuable insightThe volume of business data is exploding thanks to              ...
Cloud computing                             Provide efficiencies and competitive                             advantage – u...
As the financial services sector shifts back into growthmode, you must find ways to capitalize on new andemerging technolo..., one of Canada’s leading professional services firms, provides audit, tax, consulting, and financi...
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Getting back to growth


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Getting back to growth

  1. 1. Getting back to growthHow the latest technologies can help drivegrowth in Canada’s financial services industry
  2. 2. The global economy is bouncing back and financial services businesses in Canada are renewing their focus on growth. One way to do that is by exploring new technologies such as social media, mobile devices, business analytics and cloud computing. These technologies are rapidly gaining momentum in the marketplace, and offer the promise of almost limitless growth. The risk is that companies may get so caught up in the hype that they end up pursuing technology for its own sake, without a clear understanding of what they are trying to accomplish from a business perspective. Three of the top priorities for companies today are customers, talent and cost discipline1. If a new technology does not provide tangible value in one or more of these areas, it may not be worth pursuing. New technologies can help drive both short-term revenue and a sustainable competitive advantage. Here’s a look at some of today’s hottest technologies, and what they could mean for the financial services industry.2 Getting back to growth
  3. 3. Social mediaAttract new customers and talent –if you know how to use itFinancial services institutions are taking an increasingly communicating and gathering information. Companiesactive role in social media applications such as Facebook, with talent programs specifically designed to capitalize onTwitter and blogs. Yet most are still trying to figure out social media generally have greater recruiting success thanhow to use social media to create real business value. Is those that simply dabble.the purpose to attract new customers? Solicit feedback?Generate new ideas and innovations? Promote the brand? Allowing employees to participate in social mediaRecruit new talent? The answer is “yes”; social media can conversations and pull down interesting content cando all of these things and more. But merely participating help an organization improve its performance byin social media is not enough. You need to identify clear enabling people to connect in ways that increase theirbusiness objectives and implement formal programs to understanding and effectiveness2. Through social media,achieve them. companies are able to harvest new ideas and innovations from their employees, customers and suppliers.Social media can help you connect and interact withcustomers and prospects to a degree that simply wasn’t Of course, social media is not without risks. In particular,possible before. You can find out what people really think the technology is still maturing and the behaviouralabout your products, services and brand. These online etiquette continues to evolve. Employees who are alloweddiscussions are already taking place – with or without you. to use social media must be constantly reminded aboutBut by getting actively involved, you can help shape the appropriate behaviours and levels of information sharing.discussion and tackle potential problems while there is still Otherwise, they could become overly accustomed to thetime to fix them. The key is to apply a light touch and to casual nature of social media and might inadvertently sayput your customers’ interests on par with your own. Using or do things that hurt the company. Companies must findsocial media to blatantly promote your company’s agenda ways to actively manage such risks through appropriateis likely to do more harm than good. monitoring and control, without stifling the flow of communication that makes social media effective inSocial media is also an important tool for attracting the first talent, particularly for younger generations that arethe workforce of the future. Young people view socialmedia the same way the rest of us view telephones orface-to-face conversations – as standard tools for The bottom line Develop formal strategies and programs for using social media to build your brand, attract top talent and drive innovation. Clearly define which social media channels will be targeted, exactly how your company will participate, and who will be responsible for executing and managing social media activities. Your strategies and programs must be flexible enough to adapt to changes, since the social media market is still maturing and no one knows which channels will be most important in the future. Getting back to growth 3
  4. 4. Mobile devices Create opportunities for new value-added products and services Mobile devices such as smartphones and tablets seem to mortgage rates and allow the customer to apply for be everywhere nowadays, and their popularity is growing pre-approval based on the listing price. These kinds of all the time. In fact, in this year’s edition of Deloitte’s technology innovations would enable financial institutions annual TMT Predictions3, authors Duncan Stewart and to develop deeper relationships with customers and Paul Lee predict that in 2011, mobile devices will for the improve the overall customer experience. first time account for more than half of all computing devices sold. These devices are especially popular among The rise of tablet computers is another important trend – the young and affluent – a market segment with obvious particularly within the enterprise. Deloitte predicts that appeal for the financial services industry. 50 million tablets will be sold in 2011, with more than 25 percent purchased for use within the enterprise4. In To woo these customers, financial services firms are financial services, tablets are increasingly being used in developing mobile applications that enable people to customer service as a way to access internal banking view account information and conduct basic transactions. applications from anywhere within the branch, and by However, many of these applications are simply scaled mobile workers such as mortgage specialists. down, mobile versions of the firms’ websites. This thin veneer does not fully capitalize on the potential of mobile With the right applications, mobile devices could have an devices. To achieve a sustainable competitive advantage, even greater impact on financial services than ATMs had companies must create new business models, applications on banking – dramatically streamlining the industry’s cost and infrastructures, geared towards mobile devices. structure, and creating opportunities for new value-added products and services to drive the next wave of growth. In Location-based applications that take advantage of fact, we may soon see increased convergence of mobile integrated GPS capabilities and emerging technologies operators and financial services firms as the content and such as augmented reality represent some of the most touch points on mobile devices become a primary channel promising opportunities. In one scenario, a customer for interacting with clients. could use a smartphone application to take a picture of a house she is interested in buying. The application would then use image recognition and location services to identify the appropriate MLS listing and provide additional details about the house, including images and video of the interior. The application could also provide current The bottom line Review your current mobile strategies and development efforts to ensure all of the pieces fit together. Look at what other industries are doing to harness the power of mobile devices. This can help inspire new ideas and game-changing innovations. Offering an on-the-go version of your website is a good start, but it’s not enough.4 Getting back to growth
  5. 5. Business analyticsTurn business data into valuable insightThe volume of business data is exploding thanks to Network analysis can help a company use individuals’technical innovations such as smartphones, cheap relationships and connections to predict how influentialmass storage and the internet. Today’s consumers are they are, resulting in improved targeting for viral andconstantly generating data, whether they are surfing the word-of-mouth marketing and advertising. Advancementsweb, interacting with friends on Facebook, or simply in data visualization techniques, such as self-organizingwalking around with a smartphone. Of course, all of this maps and animated time series, make it easier to quicklyraw data isn’t very useful on its own. In fact, a larger interpret data at a glance to identify actionable insight.haystack often just makes it harder to find the needlesof insight. Business analytics tends to be more of a business challenge than an IT challenge. Often, figuring out whatBusiness analytics can help financial services firms harness questions to ask is the hardest part, while implementingthe power of data to drive growth and competitive the technology to answer those questions is relativelyadvantage. However, many business leaders find themselves easy. Privacy regulations are another critical businessstruggling to understand what the term ‘business analytics’ challenge. Finding a safe path through this ever-changingreally means. It is a multi-faceted concept that involves minefield requires deep expertise, as well as constant“the extensive use of data, statistical and quantitative monitoring of privacy issues and requirements.analysis, explanatory and predictive models, and fact-basedmanagement to drive decisions and actions5.” There is more to business analytics than software, data and models. Successful analytics projects startThe methods and tools associated with business analytics with business strategy, and then deliver models andrange from commonplace to cutting-edge. Many analytic insights that enable companies to refine theirinstitutions already use analytics to identify early signs of strategies and improve their operational card fraud, or to customize their web banner adsin response to a customer’s particular needs. A growingnumber of firms are also taking advantage of emergingpredictive capabilities, such as the ability to anticipatecustomer needs based on social media activity. Forexample, if a Facebook user changes their relationshipstatus or announces a wedding engagement on thesite, financial institutions with the ability to analyzeunstructured social media data could get a big jump onslower competitors who are stuck waiting for an officialchange of legal status. The bottom line Business analytics can be a powerful growth engine; however, technology tools alone are not sufficient to harness the power of information. To get started, find people with the deep business expertise to know which questions to ask. Make sure your data is accurate, reliable and consistent across the enterprise. Deploy analytic tools that can not only handle structured data from traditional files and databases, but also unstructured data from social media and the web. Unstructured data is where some of the biggest opportunities are likely to be found. Getting back to growth 5
  6. 6. Cloud computing Provide efficiencies and competitive advantage – under the right circumstances Cloud computing is one of today’s hottest technology Although cloud computing in financial services remains trends, and for good reason. Under the right in its infancy, companies can’t afford to stand still. If the circumstances, it is a fundamentally more efficient way to technology takes off, it could happen very quickly and deliver and manage IT services, offering key benefits such be highly disruptive. There are two phases of impact. as lower costs, reduced capital investment, faster start-up In the first phase, cloud computing helps companies do and improved business flexibility. many of the same tasks they’ve always done – just better, faster and cheaper. In the second phase, cloud computing In financial services, cloud computing is already gaining reshapes the competitive landscape by enabling companies popularity in the form of ‘Software as a Service’ (SaaS) to do things that simply weren’t possible before6. for non-core solution areas such as collaboration, CRM and HR. Broader adoption is currently being hindered by To avoid getting caught unprepared, financial institutions a number of barriers. However, none of these obstacles should look for opportunities to build their cloud are insurmountable. Large financial services organizations computing capabilities and experience in areas that are starting to expand their use of cloud computing by are not directly affected by the current barriers. Rather experimenting with ’Infrastructure as a Service’ (IaaS) than focusing on core banking systems, which are solutions for development and test environments for non- mission-critical and highly sensitive, banks could initially critical applications. look at areas where cloud-based solutions are already popular and proven, such as customer relationship One of the main barriers to cloud adoption in financial management, email, and enterprise content management. services is the issue of privacy and security. With pure Financial institutions may also consider the future impact cloud computing, companies don’t have direct control of cloud computing when they make major business over their applications and data. In fact, they might and IT decisions. For example, when selecting a new not even know where their applications and data are technology platform, consider choosing a cloud-ready physically located. Everything simply exists in the “cloud” platform even if current applications are not cloud-based. and is accessed through the network. Compliance is another critical issue. Regulations often require specific controls, processes and audits for handling financial and personal data – possibly dictating where data is stored, and requiring financial institutions to maintain direct, first-hand control. In many cases, workarounds have been developed for these barriers. Private clouds enable a company to take advantage of cloud computing technology, but are implemented entirely within the company’s own facilities and IT environment in order to improve security and control. The bottom line Given the unique barriers to cloud computing in financial services, it would probably be a mistake to jump in with both feet. But that doesn’t mean you should stand by and do nothing. By carefully picking your spots, you can start capturing some of the benefits of cloud computing while building valuable experience and capabilities that could give you a competitive edge if the technology takes off.6 Getting back to growth
  7. 7. As the financial services sector shifts back into growthmode, you must find ways to capitalize on new andemerging technologies. But you need to be selective.Scrutinize every opportunity to ensure it can deliver realvalue for your business. Implementing the latest technologyjust because everyone else is doing it is ultimately a losingstrategy. Look for ways to create a sustainable competitiveadvantage, rather than settle for “me too” solutions thatonly focus on short-term revenue.1 Winning in a Flat Market, What IT organizations can do to help their companies thrive in the months to come, Deloitte, 20092 The Power of Pull, How small moves, smartly made, can set big things in motion, John Hagel III, John Seely Brown and Lang Davison, Basic Books, April 13 20103 TMT Predictions 2011, Duncan Stewart and Paul Lee, Deloitte, 20114 TMT Predictions 2011, Duncan Stewart and Paul Lee, Deloitte, 20115 Competing on Analytics: The new science of winning, Thomas H. Davenport and Jeanne G. Harris, Harvard Business School Press; 1 edition (March 6, 2007)6 Cloud Revolution, Cloud services – from technology evolution to business revolution, Deloitte, 2010 Getting back to growth 7
  8. 8., one of Canada’s leading professional services firms, provides audit, tax, consulting, and financialadvisory services through more than 7,600 people in 57 offices. Deloitte operates in Québec as Samson Bélair/Deloitte & Touche s.e.n.c.r.l. Deloitte & Touche LLP, an Ontario Limited Liability Partnership, is the Canadianmember firm of Deloitte Touche Tohmatsu Limited.Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited byguarantee, and its network of member firms, each of which is a legally separate and independent entity.Please see for a detailed description of the legal structure of Deloitte ToucheTohmatsu Limited and its member firms.© Deloitte & Touche LLP and affiliated entities.Designed and produced by National Design Studio, Canada 11-2307