Tapping into the unbanked sector while catering to the technology-savvy Generation Z and serving the traditionalists, we are in an era where digital transformation, innovation, and agility are as much a requisite as a challenge for the Banking, Financial Services, and Insurance (BFSI) sector.

Given the increasing approval rate for digital-first banking entities, more traditional BFSI businesses are realizing the significance of digital transformation and its capability to make business practices leaner and customer-friendly. The sector is reimagining its legacy systems without having to compromise on system security or fluidity, therefore paving the way for enhanced customer experiences.

To effect this transformation, both the front and back office needs to be integrated, eliminating data that exists in silos, since the outcomes of both are intertwined and directly impact each other. By gradually replacing their legacy services with digitized processes and integrating their front- and back-office operations, BFSI players can meet customers' expectations for seamless, simpler interactions with their brand and data.

Understanding the Divide: Why integrate Front and Back Offices?

The “front-office” for the BFSI sector refers to the customer facing business processes such as sales, marketing, or customer service, i.e., the revenue generating side of an organization. On the other hand, the “back-office” systems encompass IT, operations, compliance, human resources, accounting, risk management, and other functions which act as the support activities for the front office. Traditionally, the two forces have operated independent of each other, with little collaboration or communication between them.

This division has created inefficiencies that can negatively impact the customer experience, and hence, the business outcomes. Therefore, bridging the gap between the two offices is crucial, as it eliminates or at least substantially reduces the time spent on re-entering information and duplicating processes, which can be frustrating and confusing to both customers and employees during customer interactions. Additionally, it integrates data from both sides, decreases administrative costs, and provides customer service representatives with essential information when it is required, leading to enhanced customer service and lasting impressions.

Building the Bridge: How to Transform your Legacy Systems?

Thanks to modern day digital technologies such as interactive mobile APIs, 24/7 service chatbots, self-service portals, AI-driven tools, and the advances in NLP/ML or Blockchain technology, the front-office functions have come a long way from conventional operating modes and have been transformed significantly. Whereas, the back-office activities have remained stuck in outdated technology, resulting in a legacy baggage that obstructs the goal of providing seamless customer experiences.

Even in the pre-covid era, when the industry was still pretty heavily reliant on traditional, in-person interactions and processes, most players had started to reckon the downside in their legacy systems. A 2018 survey by Accenture with North America Banking Operations indicated that almost 40% of banking operations executives and COOs identified legacy systems as one of the main impediments to digital transformation. However, the focus was on digitizing some customer-facing channels, such as online and mobile banking, while other areas of the business i.e., mid-to-back-office remained largely untouched by technology.

Today, the traditional back-office systems are taking the ‘front’ of digital transformation and most players are embracing an agile mindset to modernize their mid- to back-office functions, gradually bringing them up-to-speed with their front-office nuances. With the availability of advanced RPA capabilities, open APIs and cloud services leading banks are finding ways to integrate the new-age customer-facing applications and with their existing legacy systems. This has allowed them to take advantage of the capabilities of the newer systems while still using their old stable systems. By layering on this new system, financial institutions can replace outdated services progressively, over time instead of in one disruptive overhaul.

Teleperformance – Your Partner for Digital Integrated Business Success

In the world of BFSI, the core objective of any business is to improve outcomes for customers. To integrate the back-office with the front-office, financial institutions should start by taking an inventory of their current services to determine which should be replaced, added, or exposed to the front end. It is essential to begin with the lowest-hanging fruit and to always assess what is available in the back office. By exposing current services and building new ones, banks can embark on a path to deliver end-to-end digitized customer journeys that facilitate a differentiated customer experience.

While transformation is important not only for optimizing business performance but also for delivering a superior customer experience, it is also critical to realize that replacing legacy systems for a BFSI institution, which can be likened to a human heart transplant plant, is by no chance easy and requires a meticulous, insight-driven approach and experienced dexterity. Leading financial institutions are collaborating with third-party systems to improve customer experience while still retaining ownership of the relationship. Teleperformance (TP) has been a trusted digital business services partner with more than 57000+ experts providing digital financial services management support to over 150+ clients across 30+ countries. Connect with an expert to know more about the exceptional benefits and results we have delivered to our BFSI clients.