top of page

FINTECH-Decision-making struggles in financial services – and how they can be fixed-B-AIM PICK SELEC


From top to bottom, financial services organisations make thousands of decisions every day. Even with the introduction of algorithms and technologies like artificial intelligence and robotic process automation, employees at all levels are faced with the pressure of making the right choices, quickly.

Decisiveness is seen as a key trait across all industries. We praise the individuals who make firm decisions quickly, who can analyse different inputs and make the right choice. We even put more emphasis on how one decision can apparently determine a company’s future fate.

And yet it is rarely one moment that seals a company’s fate. More often than not, the choices we hear about are merely the most notable of a whole raft of decisions, all influenced by the culture unique to that organisation.

The state of decision-making in banking

It is hard to make decisions at the best of times – given the wider context of business today, being able to make effective decisions is both vital and loaded with additional pressure. The pandemic demonstrated what could happen – decisions that previously took many months and several committees were being made in days, if not hours. In financial services, providers rushed to facilitate new ways of paying, to support demographics that previously would not have consider digital banking and services, to try to help customers cope in a world which suddenly preferred contactless seemingly overnight.

But operating at a pandemic state of crisis is neither sustainable nor beneficial in the medium term. That means businesses need to have in place proper procedures and processes that facilitate accurate, timely decision-making.

Unfortunately, our latest report, ‘The State of Decision-Making’, suggests this isn’t always the case. While 63% of respondents working in financial services said their decisions had a global impact, the process behind those choices is rarely uniform. Just over half (55%) use data and insights, yet what is worrying is that only slightly less involve gut feeling in some way. At a time when banks and other financial services providers are creating data continuously, this failure to use it properly can lead to missed opportunities – a major issue when trying to excel in uncertain markets.

Also concerning was the challenges respondents faced when making decisions. Not enough data and insights available was the biggest obstacle for nearly a third of respondents, while a similar number were let down by a lack of collaboration between departments. Financial service providers also suffered from the syndrome of ‘too many cooks’ – having too many people involved was a major issue for a quarter of respondents. Across industry, this issue was only felt by one in five.

What about the tools they were using? Surprisingly, more than half were relying on spreadsheets, despite the issue of how the data gets into these formats. With spreadsheets often relying on manual input, it is little wonder that other research has found that up to 90 percent of all spreadsheets have errors that affect their results.

Three steps to better decision-making

How then can banks, insurance companies, wealth managers and other providers take steps to improve decision-making within their organisations?

Firstly, they need to establish a culture where only those that are absolutely necessary can be part of a decision. That doesn’t mean a select cabal dictating all company policy; it means having a clear understanding of roles, responsibility, and accountability in the decision-making process, and where the boundaries of individual remits fall.

Secondly, those with decision-making responsibility need to commit to using data and insights appropriately. Gut feelings can provide guidance, but it should be timely, accurate data that informs and provides evidence to support decisions.

Thirdly, that data needs to be captured and deployed in tools that are fit for purpose. That means ones that brings interactive reporting, planning, forecasting, and predictive analytics. By doing this through integrated business planning, senior leaders have full visibility of the entire company’s performance, allowing them to take into account everything from KPIs to operations, access instant insights, and make decisions in real-time.

Banking on the right decision-making environment

Everyone wants to make the right decisions, but many businesses struggle to create the right environment in which to do so. To overcome these obstacles, they need to establish the right culture, integrate data effectively, and deploy the right tools. Accurate, timely decisions are increasingly the difference between success and failure, and it is critical banks and other financial services providers make the right choices at a time when few will get a second chance.

Watch this : https://www.youtube.com/watch?v=Z5vxRC8dMvs

Post: Blog2_Post
bottom of page