Navigating Financial Evolution: Business Process Optimization and Digital Transformation in the Finance Sector
DOI:
https://doi.org/10.47941/ijf.1475Keywords:
: Digital transformation, Finance Sector, Business Process Optimization, Regulatory Compliance, Technology Adoption, Robotic Process Automation (RPA), Artificial Intelligence (AI).Abstract
Purpose: This study presents a thorough analysis of the financial industry's digital transformation environment with a particular emphasis on business process improvement. Financial institutions are navigating a changing environment where cutting-edge technology is being employed widely. Financial operations are changing as a result of advances in cloud computing, blockchain, as well as artificial intelligence (AI), which enable scalability, and cost-efficiency, along with improved consumer experiences. However, this change is not without its difficulties, such as the complexity of regulatory compliance, worries about data security, including the necessity of talent acquisition. The purpose of the study is to develop an in-depth assessment of the alternations in numerous financial aspects, where there has been a rise in process optimization and digital transformation. With the help of the study, the examination of the various measures included with the aid of digital technology for the intensification of company processes optimization has been achieved.
Methodology: The methodology implemented in the development of the study is that of secondary analysis. Through the application of interpretivism, addressing the issues have been provided, where deductive reasoning has been inculcated for reaching the expected outcome. The collection of information had been enabled from academic journals and other data sources from PubMed, IEEE Xplore, and Google Scholar. The application of literature analysis has been enabled for assessing the various concepts.
Findings: As per the findings of the study, it has been noted that digital revolution has been extremely fruitful for the growth of financial services. A harmonic balance between technological innovations including compliance needs to be attained via cooperative efforts between financial institutions and regulatory organizations. Efficiency gains, particularly in risk assessment procedures, are being driven by robotic process automation (RPA) and AI-based algorithms. This study highlights the necessity of constant flexibility inside financial institutions to be robust as well as competitive in the rapidly changing digital ecosystem. AI has helped in increasing data security within the financial firms and increased the rates of customer satisfaction.
Unique Contribution to Theory, Policy and Practice: The unique contribution of the study towards the theory, policy and practices relates to the betterment of theory of digital disruption for increasing the overall potential of the digital services.
Downloads
References
Kraus, S., Jones, P., Kailer, N., Weinmann, A., Chaparro-Banegas, N. and Roig-Tierno, N., 2021. Digital transformation: An overview of the current state of the art of research. Sage Open, 11(3), p.21582440211047576.
Fischer, M., Imgrund, F., Janiesch, C. and Winkelmann, A., 2020. Strategy archetypes for digital transformation: Defining meta objectives using business process management. Information & Management, 57(5), p.103262.
Nadeem, A., Abedin, B., Cerpa, N. and Chew, E., 2018. Digital transformation & digital business strategy in electronic commerce-the role of organizational capabilities. Journal of theoretical and applied electronic commerce research, 13(2), pp.1-8.
Singh, A. and Hess, T., 2020. How chief digital officers promote the digital transformation of their companies. In Strategic information management (pp. 202-220). Routledge.
Ivančić, L., Vukšić, V.B. and Spremić, M., 2019. Mastering the digital transformation process: Business practices and lessons learned. Technology Innovation Management Review, 9(2).
Bag, S., Wood, L.C., Mangla, S.K. and Luthra, S., 2020. Procurement 4.0 and its implications on business process performance in a circular economy. Resources, conservation, and recycling, 152, p.104502.
Gomez-Trujillo, A.M. and Gonzalez-Perez, M.A., 2021. Digital transformation as a strategy to reach sustainability. Smart and Sustainable Built Environment, 11(4), pp.1137-1162.
Soto-Acosta, P., 2020. COVID-19 pandemic: Shifting digital transformation to a high-speed gear. Information Systems Management, 37(4), pp.260-266.
Gabryelczyk, R., 2020. Has COVID-19 accelerated digital transformation? Initial lessons learned for public administrations. Information Systems Management, 37(4), pp.303-309.
Ulas, D., 2019. Digital transformation process and SMEs. Procedia computer science, 158, pp.662-671.
Zaki, M., 2019. Digital transformation: harnessing digital technologies for the next generation of services. Journal of Services Marketing, 33(4), pp.429-435.
Baiyere, A., Salmela, H. and Tapanainen, T., 2020. Digital transformation and the new logics of business process management. European journal of information systems, 29(3), pp.238-259.
Osmundsen, K., Iden, J. and Bygstad, B., 2018. Digital transformation: Drivers, success factors, and implications.
Vial, G., 2021. Understanding digital transformation: A review and a research agenda. Managing Digital Transformation, pp.13-66.
Chanias, S., Myers, M.D. and Hess, T., 2019. Digital transformation strategy making in pre-digital organizations: The case of a financial services provider. The Journal of Strategic Information Systems, 28(1), pp.17-33.
Sebastian, I.M., Ross, J.W., Beath, C., Mocker, M., Moloney, K.G. and Fonstad, N.O., 2020. How big old companies navigate digital transformation. In Strategic information management (pp. 133-150). Routledge.
Gomber, P., Kauffman, R.J., Parker, C., and Weber, B.W., 2018. On the fintech revolution: Interpreting the forces of innovation, disruption, and transformation in financial services. Journal of management information systems, 35(1), pp.220-265.
Chang, V., Baudier, P., Zhang, H., Xu, Q., Zhang, J. and Arami, M., 2020. How Blockchain can impact financial services–The overview, challenges, and recommendations from expert interviewees. Technological forecasting and social change, 158, p.120166.
Alt, R., Beck, R., and Smits, M.T., 2018. FinTech and the transformation of the financial industry. Electronic markets, 28, pp.235-243.
Warner, K.S. and Wäger, M., 2019. Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal. Long range planning, 52(3), pp.326-349.
Correani, A., De Massis, A., Frattini, F., Petruzzelli, A.M. and Natalicchio, A., 2020. Implementing a digital strategy: Learning from the experience of three digital transformation projects. California Management Review, 62(4), pp.37-56.
Bartsch, S., Weber, E., Büttgen, M. and Huber, A., 2020. Leadership matters in crisis-induced digital transformation: how to lead service employees effectively during the COVID-19 pandemic. Journal of Service Management, 32(1), pp.71-85.
Milian, E.Z., Spinola, M.D.M. and de Carvalho, M.M., 2019. Fintechs: A literature review and research agenda. Electronic Commerce Research and Applications, 34, p.100833.
Kouhizadeh, M., Saberi, S. and Sarkis, J., 2021. Blockchain technology and the sustainable supply chain: Theoretically exploring adoption barriers. International journal of production economics, 231, p.107831.
Batubara, F.R., Ubacht, J. and Janssen, M., 2018, May. Challenges of blockchain technology adoption for e-government: a systematic literature review. In Proceedings of the 19th annual international conference on digital government research: governance in the data age (pp. 1-9).
Kumar, S., Raut, R.D., Nayal, K., Kraus, S., Yadav, V.S. and Narkhede, B.E., 2021. To identify industry 4.0 and circular economy adoption barriers in the agriculture supply chain by using ISM-ANP. Journal of Cleaner Production, 293, p.126023.
Masood, T. and Sonntag, P., 2020. Industry 4.0: Adoption challenges and benefits for SMEs. Computers in Industry, 121, p.103261.
Mani, Z. and Chouk, I., 2018. Consumer resistance to innovation in services: challenges and barriers on the internet of things era. Journal of Product Innovation Management, 35(5), pp.780-807.
Raj, A., Dwivedi, G., Sharma, A., de Sousa Jabbour, A.B.L. and Rajak, S., 2020. Barriers to the adoption of industry 4.0 technologies in the manufacturing sector: An inter-country comparative perspective. International Journal of Production Economics, 224, p.107546.
Al-Ruithe, M., Benkhelifa, E. and Hameed, K., 2018. Key issues for embracing the cloud computing to adopt a digital transformation: A study of saudi public financial sector. Procedia computer science, 130, pp.1037-1043.
Stewart, H. and Jürjens, J., 2018. Data security and consumer trust in FinTech innovation in Germany. Information & Computer Security, 26(1), pp.109-128.
Ali, O., Ally, M. and Dwivedi, Y., 2020. The state of play of blockchain technology in the financial services sector: A systematic literature review. International Journal of Information Management, 54, p.102199.
Pejić Bach, M., Krstić, Ž., Seljan, S. and Turulja, L., 2019. Text mining for big data analysis in financial sector: A literature review. Sustainability, 11(5), p.1277.
Lui, A. and Lamb, G.W., 2018. Artificial intelligence and augmented intelligence collaboration: regaining trust and confidence in the financial sector. Information & Communications Technology Law, 27(3), pp.267-283.
Scott, H.S., Gulliver, J. and Nadler, H., 2019. Cloud computing in the financial sector: A global perspective. Program on International Financial Systems.
Mogaji, E., Soetan, T.O. and Kieu, T.A., 2020. The implications of artificial intelligence on the digital marketing of financial services to vulnerable customers. Australasian Marketing Journal, pp. j-ausmj.
Mbama, C.I., Ezepue, P., Alboul, L. and Beer, M., 2018. Digital banking, customer experience and financial performance: UK bank managers’ perceptions. Journal of Research in Interactive Marketing, 12(4), pp.432-451.
Eling, M. and Lehmann, M., 2018. The impact of digitalization on the insurance value chain and the insurability of risks. The Geneva papers on risk and insurance issues and practice, 43, pp.359-396.
Barbu, C.M., Florea, D.L., Dabija, D.C. and Barbu, M.C.R., 2021. Customer experience in fintech. Journal of Theoretical and Applied Electronic Commerce Research, 16(5), pp.1415-1433.
Hoyer, W.D., Kroschke, M., Schmitt, B., Kraume, K. and Shankar, V., 2020. Transforming the customer experience through new technologies. Journal of interactive marketing, 51(1), pp.57-71.
Komulainen, H. and Saraniemi, S., 2019. Customer centricity in mobile banking: a customer experience perspective. International Journal of Bank Marketing, 37(5), pp.1082-1102.
Manser Payne, E.H., Peltier, J. and Barger, V.A., 2021. Enhancing the value co-creation process: artificial intelligence and mobile banking service platforms. Journal of Research in Interactive Marketing, 15(1), pp.68-85.
Batat, W., 2019. Experiential marketing: Consumer behavior, customer experience and the 7Es. Routledge.
Bolton, R.N., McColl-Kennedy, J.R., Cheung, L., Gallan, A., Orsingher, C., Witell, L. and Zaki, M., 2018. Customer experience challenges: bringing together digital, physical, and social realms. Journal of service management, 29(5), pp.776-808.
Eller, R., Alford, P., Kallmünzer, A. and Peters, M., 2020. Antecedents, consequences, and challenges of small and medium-sized enterprise digitalization. Journal of Business Research, 112, pp.119-127.
Bonfanti, A., Vigolo, V. and Yfantidou, G., 2021. The impact of the Covid-19 pandemic on customer experience design: The hotel managers’ perspective. International Journal of Hospitality Management, 94, p.102871.
Khin, S. and Ho, T.C., 2018. Digital technology, digital capability, and organizational performance: A mediating role of digital innovation. International Journal of Innovation Science, 11(2), pp.177-195.
Matarazzo, M., Penco, L., Profumo, G. and Quaglia, R., 2021. Digital transformation and customer value creation in Made in Italy SMEs: A dynamic capabilities perspective. Journal of Business Research, 123, pp.642-656.
Martin, J.W., 2021. Lean Six Sigma for the Office: Integrating Customer Experience for Enhanced Productivity. Productivity Press.
Foroudi, P., Gupta, S., Sivarajah, U. and Broderick, A., 2018. Investigating the effects of smart technology on customer dynamics and customer experience. Computers in Human Behavior, 80, pp.271-282.
Kaur, S.J., Ali, L., Hassan, M.K. and Al-Emran, M., 2021. Adoption of digital banking channels in an emerging economy: exploring the role of in-branch efforts. Journal of Financial Services Marketing, 26, pp.107-121.
Schallmo, D.R. and Williams, C.A., 2018. Digital transformation now! Guiding the successful digitalization of your business model. Springer.
Kane, G., 2019. The technology fallacy: people are the real key to digital transformation. Research-Technology Management, 62(6), pp.44-49.
Brock, J.K.U. and Von Wangenheim, F., 2019. Demystifying AI: What digital transformation leaders can teach you about realistic artificial intelligence. California management review, 61(4), pp.110-134.
Sharma, S.K. and Sharma, M., 2019. Examining the role of trust and quality dimensions in the actual usage of mobile banking services: An empirical investigation. International Journal of Information Management, 44, pp.65-75
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Sunil Chahal
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work’s authorship and initial publication in this journal.
