Blog Archives - Page 8 Of 177

From Chaos to Harmony: The Transformative Role of Supply Chain Orchestration | Blog

July 3, 2024

Navigating the complexities of global supply chains has become increasingly challenging due to recent disruptions and evolving customer . Read on to discover how supply chain orchestration helps enable operational efficiency, resilience, and adaptability to thrive amid continuous changes and pressures.

In the intricate world of global business, supply chains serve as the backbone, ensuring products seamlessly move from factories to customers, keeping commerce fluid and consumers satisfied. However, in recent times of uncertainty, maintaining this is becoming increasingly difficult, putting supply chains under more pressure than ever. Effective supply chain management is no longer only about operational efficiencies, it is also about the ability to anticipate, adapt, and thrive amidst disruptions.

Challenges facing modern supply chains

The past few years have been tumultuous for supply chains, affected by the pandemic, geopolitical tensions, macroeconomic uncertainties, labor shortages, and disruptions in maritime trade. Incidents like the tensions in the Red Sea and attacks on pipelines and cables in the Baltic and North Seas have also underscored the fragility of these networks, creating ripples and shocks across the supply chains. Compounding these environmental challenges are additional hurdles, such as limited real-time visibility and evolving customer demands, such as the rise of omnichannel distribution, real-time order status updates, and requirements for same-day or next-day delivery. Furthermore, the use of disparate management systems across processes hampers the ability to capture and transfer real-time data effectively, and organizing, processing, and managing internal and external data remains inefficient due to limited interoperability caused by differing operating and design standards.

The current state of supply chains

Modern supply chains are uniquely complex and multi-faceted, more so than many other enterprise functions. Unlike functions such as Finance & Accounting (F&A) or Customer Experience Management, supply chain operations involve a higher number of decision-makers. Supply chain operations are often overseen by a range of C-suite executives and senior leaders, including Chief Procurement Officer (CPO), Chief Operating Officer (COO), Chief Supply Chain Officer (CSCO), Chief Information Officer (CIO), and Chief Sustainability Officer (CSO), often with distinct and sometimes conflicting priorities. The varied goals of these stakeholders can often lead to fragmented decision-making and operations. For example, a CPO’s focus on minimizing costs may clash with a COO’s priority for agility or a Chief Sustainability Officer’s push for environmentally friendly practices. This misalignment creates operational silos, where different parts of the supply chain work in isolation rather than as a cohesive unit. Additionally, the provider landscape in supply chain management reflects this fragmentation. Providers often tailor their solutions to meet the needs of one or a few stakeholder groups, leading to a segmented approach that exacerbates the issue of silos.

The result of this fragmented approach is a series of data silos, disconnected processes, and isolated systems across various supply chain functions—planning, inventory management, procurement, and logistics.

Fragmented data: Without integrated data systems, supply chain leaders struggle to obtain a holistic view of operations, making it difficult to align inventory levels with real-time demand
Fragmented processes: Disjointed operations can slow down order processing and fulfillment, impacting customer satisfaction and leading to lost sales opportunities
Fragmented systems: When technology systems across the supply chain don’t communicate effectively, it can result in inefficiencies and increased operational costs

These fragmentations significantly impede visibility and the ability to make informed, timely decisions and cause missed opportunities. To overcome these challenges and transform their supply chains into agile, resilient networks, organizations must seek integrated, holistic solutions that foster collaboration and seamless operation across all functions and stakeholders.

Emerging as a solution: supply chain orchestration

C-suite executives are turning to supply chain orchestration to address these challenges and build resilient, agile supply chains.

Supply chain orchestration is the comprehensive coordination and synchronization of all activities and processes involved in the supply chain—from planning to logistics and after-sales services.

It involves integrating and harmonizing various functions, systems, and stakeholders to ensure a seamless flow of information and real-time visibility. It comprises three core components:

Data orchestration

This involves aggregating data from all internal and external sources into a unified data lake, followed by rigorous cleaning, refining, and making the data usable across functions. Multiple teams can then leverage the data for predictive and prescriptive analytics, real-time visibility, and data-driven decision-making.

Technology orchestration

Connecting various supply chain platforms and software, such as planning software, manufacturing execution systems, Order Management Systems (OMS), Transport Management Systems (TMS), Warehouse Management Systems (WMS), Returns Management Systems (RMS), and others, through APIs or integration software ensures real-time data flow and information exchange.

People/Service orchestration:

This component focuses on aligning organizational structures and processes across functions, promoting a unified approach to supply chain management. It also encourages collective planning and decision-making, reducing fragmented communication with external and internal stakeholders.

What’s ahead

Supply chain orchestration, although still evolving, represents a forward-thinking goal for both mature and emerging organizations. Achieving end-to-end orchestration requires significant investments in time, effort, and resources. The path forward involves a phased approach.

Organizations can begin by orchestrating data, focusing on integration, cleansing, and harmonization across all supply chain functions. This foundational step establishes the groundwork for integrating technology systems to ensure seamless information flow across different systems. Subsequently, aligning organizational processes to foster seamless communication and collaboration among departments and stakeholders becomes essential. Additionally, organizational structures, including appropriate governance, change management, and stakeholder alignment, are crucial to enable the holistic orchestration of supply chains across data, technology, and people.

Ultimately, this phased approach sets the stage for comprehensive supply chain orchestration, allowing companies to adapt swiftly to market changes, mitigate risks, and capitalize on growth opportunities in today’s dynamic global landscape.

Discover more about how to navigate the evolving supply chain landscape in the webinar, Innovating End-to-End Supply Chain Orchestration.

Changing of the Guard | Blog

July 1, 2024

The other day I was speaking to my good friend Cara Herrick of ServiceNow, bemoaning the fact that when I go to a GBS industry event, increasingly the leaders are sufficiently young enough to be my children—just like her. The discussion prompted me to go beyond their age and tenure, trying to unpack the difference between their GBS leadership approach and those of my age cohort who are moving onto the 4 G’s—grey hair, golf, grenache, and grandchildren at increasing rates.

Now, I must confess that, as a baby boomer, I’m not always au fait with how my younger peers work. I’ve never figured out work-life balance; I prefer picking up the phone; I like writing emails and penning monthly articles such as this one—and I struggle with Slack, podcasts, wearing iPods, and 25-minute Teams meetings.

But I’m increasingly working with GBS leaders who were born after IBM released the first personal computer or even when the Berlin Wall fell, forcing me to figure how these folks tick, and what it means for the future of GBS. No doubt about it, they are a different breed—now more likely to come to the role either as a loyalist—from another enterprise function—or as a step-up leader from a shared services or smaller GBS organization.

Looking at these next-gen leaders, does any of what I am seeing resonate?

Less flash and splash: Next-gen leaders are focused on getting their GBS houses in order and all their internal ducks in a row rather than looking for industry glory. When do they have a story to tell, they often need cajoling to take a conference podium, preferring venues that allow them to share practices and explore ideas rather than play rock star.
Tightly aligned with the enterprise agenda rather than to GBS orthodoxy: I see our younger leaders really focused on their enterprise agendas rather than being seen as external vanguards of a GBS movement as their predecessors did. These folks don’t swallow the GBS common wisdom hook, line, and sinker. While they actively look at industry trends and best practices, imposing GBS best practices as a North Star is not in their DNA. They pick and choose, mindful of what will drive effective change, and eschew the rest of the usual playbook.
Penchant for action: These leaders do not act sequentially, first thinking through a transformation blueprint. Rather, they come up with a thesis, then continually test and learn to drive change. Operations becomes a transformation lab rather than an implementation, driving operations with transformative actions rather than making change sequentially. They are sufficiently agile and flexible to pivot quickly.
IT, their new best friend: Fewer millennial leaders are fighting battles royal with their IT counterparts as their forebears often did. The imperative to go digital, partner in an S4Hana implementation, and figure out AI use cases is forcing a more collaborative co-existence—and increasingly new reporting lines to IT. Under their stewardship, the dialog is combative and fraught with fights over who’s the boss.
Unrelenting incrementalists: More often than previously, our new leaders come into GBS roles as loyalists, having had success in another enterprise position. They take the helm with effective working relationships with their stakeholders and know which change levers to pull when. Adeptness at forming coalition is a hallmark of their leadership. Consequently, they exhibit far less of the “savior syndrome.”
Less tribal: Let’s be honest; our more mature GBSs have been staffed by keeping the tribe together; when an expert leader moves, they are more often than not bringing at least one member, if not the entire tribe, along with them. Next-gen leaders have become adept at blending the DNA of their organizations, with less dependence on their friends.
More tech conversant, if not savvy: It seems to me that they don’t jump as quickly to the trifecta solution of people, process, and cheaper location as their GBS forebearers did (and are still doing) without first looking through the lens of digitization. They know what they are buying and are often more fluent in the features and functionality of their tools than the salespeople knocking at their doors. Last, they expect their workplaces—and GBS to have up-to-date tools and platforms, and are willing aggressively to fight for them.
Fixated on talent and structure: Having the right capabilities on their teams is priority one for these leaders. They tend to think about their organizations as an orchestration of capability rather than a hierarchy, embracing structures that are flat, moving talent into roles laterally as a cross-training exercise, and compelling double hatting responsibilities. And, because their management prowess was honed during the pandemic, they aren’t afraid of appointing a truly global leadership team.
Transparent: No black box for many of these folks; governance is as much about keeping their stakeholders informed as it is managing performance, risk, and compliance. They’ll more easily discuss their challenges and set realistic expectations as opposed to glossing over them.
Adept at forming critical coalitions: Collaborating internally is a priority for these next-gen leaders. They pick their battles when driving change and looking to increase scope, pairing up CXOs and peers that share and support key elements of the GBS imperative (note that I don’t use the term “vision”).
Less dependent on outside help: These folks are sufficiently confident and fluent in GBS operations to keep their own counsel. When a big name is “transforming” their operation, it’s more likely a decision in response to a major corporate change or made by a CXO than by themselves. When they do hire outside consultants, it’s likely due to a) a need for arms and legs; b) a request for strategy validation; or c) a discrete project. They are also less fussed about consulting brand names; they will fight procurement to hire small boutiques, one-man shop advisors, and interims to help move the dial.

So, if you are coming away thinking that I’m dismissing the old guard, nothing could be further from the truth. Today’s GBS leaders have career advantages that those of us around at the advent of the model never had; they don’t have to spend the same amount of evangelizing, fighting, and figuring out what good should look like. The model is accepted, career potential is acknowledged, and we have practices and precedents on which to build.

I’m optimistic that this next generation of leadership will force a radical rethink of the GBS model, about five years overdue to my mind. Perhaps we will be less fussed about GBS orthodoxy, creating new operating models where control and ownership are no longer the main imperative. Perhaps we’ll move a little bit closer to harnessing the promise of technology. Perhaps GBS will become an enterprise state of mind rather than a service organization, delivering value beyond cost.

New guard, I’m counting on you.

Emerging Risk and Compliance (R&C) Outsourcing Needs | Blog

July 1, 2024

In the dynamic landscape of banking, financial services, and insurance (BFSI), risk and compliance (R&C) functions have become critical. Read on to explore the growing trend of outsourcing R&C processes, including the strategic advantages, regulatory considerations, and the role of specialized service providers in bolstering operational efficiency and compliance resilience amid evolving industry dynamics. Reach out to us to discuss further.

Risk and compliance (R&C) functions may not directly generate revenue, but they are crucial for the effective execution of business strategies and ongoing operations of banking, financial services, and insurance (BFSI) enterprises. Conventionally, R&C only receive attention when something goes wrong, like regulatory enforcement. It’s time to adopt a proactive and strategic approach.

Recently, there have been rising volumes for processes related to R&C, putting significant pressure on in-house compliance teams of BFSI enterprises, as the cost of failing to meet R&C mandates is extremely high. For example, Binance faced a US$4.3 billion penalty in 2023 due to lapses in anti-money laundering program. Similarly, in 2024 HSBC has been fined £57.4 million for customer deposit protection failings.

So, what’s the solution? While some BFSI enterprises, due to regulatory requirements or other sensitivities, must keep all compliance activities in-house, for others, outsourcing part or all of their compliance functions is a viable alternative. This shift not only addresses immediate pressures but also positions BFSI enterprises for future resilience and competitiveness.

The catch? Regulatory guidance emphasizes that even when compliance activities are outsourced, the company retains accountability for meeting its regulatory obligations. Hence, the need to have a thorough decisioning strategy when it comes to risk and compliance outsourcing.

Traditionally, R&C outsourcing in the BFSI sector has been limited to areas like KYC, AML, credit risk, operational, and third-party risk management, with some audit support services. However, the industry has recently become more open to outsourcing critical processes such as market and liquidity risk, fraud management and chargeback, enterprise risk management, internal audit support, risk consulting, and ESG services.

Exhibit 1: Risk and compliance value chain as defined by Everest Group

The rising propensity to outsource R&C processes is driven by a multitude of factors, including:

Current macroeconomic headwinds: The ongoing recessionary pressures are putting cost constraints on BFSI enterprises as they navigate a high-interest environment. Outsourcing R&C promises much-needed cost-effectiveness when compared to maintaining an in-house compliance team.

Rising volumes of R&C requirements: Current geopolitical scenarios, such as the Israel-Palestine and Russia-Ukraine conflicts, along with major global elections, have heightened the need for processes like sanction screening and Politically Exposed People (PEP) monitoring. Additionally, the macroeconomic environment, where many are living paycheck-to-paycheck, has led to an increase in fraud and chargeback instances. Outsourcing to specialist firms can help increase efficiencies due to economies of scale and a clear operational focus.

The increasing complexity of R&C processes: Fraudsters have become tech-savvy, and the global regulations keep on evolving. Outsourcing can provide quicker access to advanced systems, such as compliance analytics and AI-based risk models, that might be costly or time-consuming to develop in-house. By outsourcing compliance tasks, BFSI enterprises can focus on their core capabilities and strategic goals, thereby increasing productivity and competitiveness.

Access to specialized talent: As BFSI enterprises expand their compliance efforts and integrate them within core business operations, the demand for skilled compliance talent has risen. Effective compliance management now requires not only financial, legal, and analytical skills but also strong operational experience, a combination that is in short supply and can be complemented by an R&C specialist outsourcing partner.

Evolving enterprise priorities within risk and compliance

The COVID-19 pandemic forced BFSI enterprises to rapidly adapt their operations. As the pandemic evolved into an economic crisis, it triggered unemployment and social unrest, presenting challenges like business disruption, remote work, data security, cyber threats, and increased risk and compliance monitoring.

Failures of major banks such as Silicon Valley Bank, Credit Suisse, Silvergate Bank, and First Republic Bank highlighted the urgent need for continuous investment in legal, risk, audit, and compliance functions amid rising inflation and asset/liability mismatches.

Enhanced regulatory scrutiny is another key factor, as highlighted below:

AI and external data use control: The EU Artificial Intelligence Act, the first comprehensive legal framework for AI, was adopted on March 13, 2024. The new Colorado Division of Insurance regulations require insurers to test AI/data systems for bias
Cybersecurity and data safety: The Consumer Financial Protection Bureau (CFPB) proposed rules on consumer-authorized financial data-sharing, and New York’s expanded cybersecurity rule mandates annual reviews of written policies by a governance committee
Capital and solvency oversight: The Financial Stability Oversight Council (FSOC) finalized a framework for assessing risks to US financial stability, including non-bank financial companies and payment systems. The CFPB proposed supervision of digital wallet and payment apps, while the National Association of Insurance Commissioners (NAIC) seeks to protect consumers by ensuring the solvency of life insurers through revised risk-based capital requirements

This more stringent supervisory environment pressures banking organizations to accelerate remediation efforts and operate with less room for error.

The road ahead

Outsourcing broader R&C is similar to the early days of IT outsourcing, where companies gradually outsourced processes one or two at a time. BFSI enterprises should strategically decide which compliance activities to outsource, ensuring these processes are already stable and effective in-house, as outsourcing alone won’t fix existing issues.

As the R&C landscape evolves, financial institutions must proactively adapt by assigning clear compliance responsibilities, integrating technology (AI, analytics, automation), and establishing robust risk management frameworks. Service providers will be essential in supporting these compliance efforts.

For more on R&C outsourcing trends and achieving regulatory compliance, contact Dheeraj Maken ([email protected]), Kriti Gupta ([email protected]) and Ritwik Rudra ([email protected]), or download our report, “High Tide of Transformation – Financial Crime and Compliance (FCC) State of the Market 2024.”

Don’t miss our webinar, What’s Next in Financial Services? Driving Transformation Through Sourcing, Technology, and Operations, to learn how BFSI firms are driving business transformation in response to the macroeconomic environment, evolving customer needs, the tightening regulatory landscape, and the rapid adoption of AI and cloud technologies.

UK Banks Ramp Up Digital Banking Services and Redefine Operations. What are the Implications for the Outsourcing Industry? | Blog

June 27, 2024

Facing macroeconomic challenges and shifting consumer demands, UK banks are reimagining their operations to stay competitive. This transformation involves cost-cutting, digitalization, and a focus on core business areas. The restructuring opens new opportunities for the outsourcing industry as banks seek third-party support to drive efficiency and innovation. Reach out to us to learn more.

A wave of macroeconomic shifts and evolving consumer demand are driving UK banks to rethink their operating model. The UK financial sector is under pressure amid high inflation, lower interest margins, shrinking profits, and a rise in digital banking services. The top banks of the UK, which have historically concentrated their core business in specific segments such as lending and investment banking, are particularly jolted as the two segments witness a dry business amid the slowdown.

While there were a few banks that began strategic restructuring during the pandemic, the number of banks accelerating transformation efforts has surged in the past two years amid the slowdown. Following are the current key factors that are leading UK banks to reimagine their business:

1. Cost pressure: A competition for deposits has been rising for UK banks as clients shifted to higher-rate products, while new originations have decreased amid a volatile interest-rate environment. Mortgage rates on new loans fell toward the end of 2023 due to a fall in market swap rates. Even as originations recover, lower mortgage rates imply a reduced net interest margin for banks. The cost-to-income ratio increased visibly for key banks in Q4’ 2023 when compared to Q3’ 2023, as highlighted in the exhibit below

2. The need for diversification: A few banks in the UK have begun looking at diversification of their business. Some moved toward restructuring as part of their internal strategic plan, while others, that have their revenue concentration in interest rate-reliant segments took a reactive measure amid a pressured, volatile interest rate environment

1. In 2022, Lloyds announced that it would strive to move away from mortgages to business lines less dependent on interest rates, including wealth management and insurance
2. In the beginning of 2024, Barclays announced its acquisition of Tesco’s retail banking business to further expand its presence in the segment. It was also planning to cut jobs in the investment banking segment
3. In February 2024, Standard Chartered was reported to have been looking at restructuring plans for its investment banking division

3. Evolving customer needs: With the rise in new-age banks such as neobanks, customers in the UK are increasingly switching to these online banks due to their services. By the first half of 2023, neobanks such as Revolut and Monzo were neck and neck with traditional banks such as HSBC when it came to the number of customers in the UK, as highlighted in the exhibit below

As the competition from these banks rises for traditional banks, leading institutions are changing the way they serve their customers. In the past two years, most of the top banks have closed their physical branches due to lesser footfall and a greater move to bring all the services online. A representative list of such branch closures is mentioned below.

Bank	Year of shutdown	Number of branches closed in the UK
Virgin Money	2023	40
Natwest	2024	98
Barclays	2024 & 2025	96
Lloyds Bank (including Halifax and Bank of Scotland)	2024 & 2025	176

How are banks planning to restructure their operations?

Most of the major banks in the UK have begun taking steps to align their internal structure according to market demands. While some banks are focusing on becoming digitally equipped institutions for customers, other banks are undertaking strategic measures to overhaul their business segments. A few of the examples are mentioned below:

Digital banking services transformation:
- In 2022, Lloyds committed to a £1 billion IT spend as part of its digital transformation strategy, with an aim to increase its digitally active customers by more than 10% by 2024
- Santander UK also started its core banking digital banking services journey in 2022. It has migrated its UK commercial customers to a new digital banking platform, Gravity on Google Cloud
Asset sale:
Structural / leadership changes:
- In February 2024, Barclays declared an operational overhaul, including substantial cost cuts, asset sales, and the division of the business into five business segments
- In March 2024, Standard Chartered announced changes to its group management team, as part of which the leadership structure of its major divisions has been overhauled
Switch to private ownership: Natwest is on its way to returning to private ownership, after the UK government announced in May 2024 to cut its stake to less than 23%

What does it mean for the outsourcing industry?

The UK financial industry is finally opening to outsourcing and catching up with global peers. The post-pandemic environment accelerated the digital push but slowed business for institutions. This is driving banks to transform operations through third-party support. Thus, while operations outsourcing slowed in other regions, it grew in the UK by over 10% in FY2023. With many banks still on their way to the restructuring journey, the UK poses a slew of opportunities for the outsourcing industry. Here is our take:

The demand for technology levers such as automation and AI will rise from banks looking to become more digital
Financially distressed banks could look for sale or carveout of their loss-making divisions to revive profits
Banks that have restructured their business divisions may revisit their sourcing strategies. For instance, new business divisions may warrant a new sourcing plan. Meanwhile, the divisions that have come under common leadership may follow similar sourcing strategies, such as having a common vendor at both front- and back-offices

The era of transformation in the UK financial sector has brought about a diverse set of opportunities for outsourcing. In a market that has remained tough to crack in the past, this serves as a good chance for providers looking to make a headway and expand their presence in the region. For questions or to explore this topic further, reach out to Sakshi Maurya at [email protected] or [email protected].

Catch our webinar, What’s Next in Financial Services? Driving Transformation Through Sourcing, Technology, and Operations, to learn about driving business transformation in response to the macroeconomic environment, evolving customer needs, the tightening regulatory landscape, and the rapid adoption of AI and cloud technologies.

Beyond Conventional QA: Reinventing Quality Engineering for the Phygital Era | Blog

June 26, 2024

Enterprises are welcoming the adoption of phygital systems, blending physical and digital elements for next-level product experiences. While these innovations offer significant benefits, they also introduce unique quality challenges that require specialized quality engineering, multidisciplinary talent, and strategic partnerships. This blog explores these challenges and the necessary transformations needed to ensure seamless phygital experiences. Reach out to discuss further.

Enterprises are rapidly embracing phygital systems, or the integration of physical and digital components to bring out innovative and immersive product experiences in the market. For example, in the healthcare domain, medical devices are being augmented with digital capabilities for remote monitoring, telemedicine, and data-driven diagnostics. Point-of-sale (POS) systems are evolving into phygital systems with the integration of digital payment gateways, inventory management, and data analytics capabilities. The gaming industry is pushing boundaries with immersive phygital experiences through advanced gaming consoles, virtual reality (VR) headsets, and haptic feedback controllers. Automotive companies are revolutionizing transportation with connected cars, advanced driver-assistance systems (ADAS), and autonomous driving features. While these emerging workflows enhance user experience, they also increase the surface area of potential quality leakages.

Enterprise phygital challenges and the role of quality function

As enterprises accelerate the introduction of phygital systems to the market, they open the door to more encounters of unique quality challenges. Enterprises now recognize that compromised product quality can have severe repercussions, including business losses and brand erosion. Consequently, they must proactively plan for contextualized quality engineering interventions tailored to address these specific challenges. The exhibit below illustrates several domain-specific phygital quality engineering challenges and potential solutions required to ensure seamless phygital experiences.

Evolving quality functions to serve emerging phygital assurance needs

Addressing the quality challenges outlined above will require fundamental rejigging of quality functions across key critical dimensions highlighted in the exhibit below.

Transforming quality engineering talent: Quality engineering professionals will have to develop multidisciplinary skillsets spanning hardware, embedded systems, data validation, and deep domain expertise. Upskilling in essential areas such as regulatory compliance landscape, payment gateway workflows of POS systems, game logic, and safety requirements of automotive systems will be key for phygital assurance success
Adopting specific toolsets: Beyond traditional software quality engineering tools (be it open source or third-party toolsets), phygital assurance mandates would require investment in specialized toolsets such as hardware-in-loop (HIL) testing, robotic arms, and data validation tools. Enterprises will also need to invest in developing expertise in using these specialized tools
Forging external partnerships: Forging partnerships with external technology and service providers will give enterprise access to specialized product engineering and testing expertise these firms already possess, which will help enterprises in attaining phygital success

The road ahead

As enterprises race to roll out phygital products, faster time-to-market will not be a differentiator, but a necessity to attain competitive advantage. But this quest to shorten release cycles cannot come at the cost of product quality. Phygital assurance expertise is critical to ensure flawless phygital experiences. However, enterprise in-house capabilities alone may not suffice, and hence, ecosystem partnerships are pivotal. Enterprise must judiciously select partners that can bring in the right set of quality engineering talent and toolset expertise that will help enterprises meet their assurance requirements.

To share your thoughts and discuss research on the future of phygtial assurance, please contact Ankit Gupta, [email protected], or Ankit Nath, [email protected].

Check out our webinar, Engineering Services in 2024: The Market Outlook and Commercial Trends, to learn the pricing outlook, commercial dynamics, market attractiveness, and evolving buyer expectations for engineering services.

Why Continuity of Talent Is Now Crucial for Tech Platform Teams

June 24, 2024

Companies that are well into their digital journey invest a lot in their platform technology stack. As I explained in a prior blog, the relationship between their technology and their business operations is becoming very codependent and intimately related. This causes a need for continuity of talent in the tech teams, which has significant implications in the relationships companies build with their third-party service providers as well as how they configure their own teams internally.

The Region Aspiring to be the Next AI Innovation Superpower | Blog

June 24, 2024

Saudi Arabia is rapidly emerging as a global leader in artificial intelligence (AI) and generative AI (gen AI) innovation. Read on to learn how the nation is making substantial investments to become a pioneer in the AI landscape, attracting significant attention from global tech and investment communities.

The Kingdom of Saudi Arabia has been historically dominated by its O&G industry and, until quite recently, was not perceived as a tech-savvy nation. However, in alignment with the region’s Vision 2030 of diversifying its economy, Saudi Arabia has all its investments in line to become a pioneer in the AI and gen AI landscape. The ripples created by this region have attracted multiple service providers, tech providers, and even the global investment world. In the past two years, the Saudi government’s focus has positioned this region as one of the top AI innovation hubs in the world.

Fueled by its vast O&G wealth, Saudi Arabia is rocketing forward in the AI race, while other nations grapple with economic headwinds

While the resilient O&G industry of this region is one contributing factor for available funds, the region’s economy also did not take a huge hit when the global recession fears and macroeconomic conditions shook the US and Europe. While others took a cautious approach in experimenting with gen AI and budgeting for full-scale implementations, Saudi Arabia approached this opportunity head-on.

As the cost of AI experimentation is quite high, Saudi Arabia is expected to pump around US$40 billion in the development of AI and gen AI – making this region one of the biggest AI investors globally. It is also planning to invest in niche AI startups, including chip makers and data centers, which will power the next generation of computing.

Capitalizing on consistent and proactive government initiatives, Saudi Arabia is making steady strides toward becoming an AI innovation powerhouse

Saudi Data and AI Authority (SDAIA) along with International Centre for Artificial Intelligence Research and Ethics (ICAIRE) are driving the initiatives for AI and gen AI development within the region. The Gen AI for All program supports digital cooperation and capability building for 16 member nations led by Saudi Arabia and also emphasizes the utilization of gen AI for broader global benefit.

To bolster Saudi Arabia’s Media industry by harnessing the power of AI, two new initiatives have been launched – AI Center for Media and Future Camp of Generative AI for Media.

GAIA (Gen AI Accelerator) was launched in 2023 in collaboration with SDAIA, National Technology Development Program (NTDP), and New Native (a global AI platform). GAIA’s goal is to create 300 high-impact AI startups within three years by providing early-stage funding, mentorship, and AI technology access. In 2024, the region committed an additional US$1 billion to strengthen the accelerator program.

Saudi Arabia is prioritizing security and explainability in its gen AI initiatives and fostering a trustworthy environment can attract more investments

AI and gen AI governance concerns have made many regions (especially, Europe) cautious of adopting these technologies. However, SDAIA is proactively tackling this challenge and has already defined very robust guidelines specifically for gen AI. It has released a comprehensive document on gen AI guidelines, risks, and how to better manage or mitigate them. For example, the document lists deep fakes and misrepresentation as one of the top risks. It also enumerates multiple resolutions to combat this challenge, such as watermark implementation, KYC protocols, output verification, and better digital literacy.

The document also entails multiple guidelines targeted toward the developer community working on any gen AI model within the region including fairness, reliability, responsibility, security, privacy, and social concerns.

With dedicated initiatives and strategic investments, Saudi Arabia is paving the way for innovative local enterprises trying to embrace the potential of gen AI

The region is leading by example and is expected to augment many of its current industries, such as O&G and Media, with gen AI capabilities. State-owned O&G company Aramco which is also one of the largest organizations in the world by revenue has launched a gen AI model – Aramco Metabrain AI. A pioneering technology in its industry, it can work on more than 250 billion parameters while utilizing 90+ years of company data spanning seven trillion data points. Aramco expects this initiative to optimize costs and well options by analyzing drilling plans, geological data, and historical drilling time. It will also be leveraged to forecast pricing trends, market dynamics, and geopolitical insights. By the end of this year, Aramco plans to augment this model with 1 trillion parameters. This will add another feather to Aramco’s cap as the World Economic Forum has already recognized four of Aramco’s facilities as “Manufacturing Lighthouses” for their extensive use of advanced solutions.

Government efforts in gen AI have come to fruition with a wave of technology and service providers flocking to this massive and untapped market

The push from the Saudi government and the influx of investments in gen AI has garnered attention from multiple technology and service providers. The providers are focusing on capturing this booming market by making dedicated investments in the region. For example, PwC Middle East is partnering with Microsoft to launch an AI Excellence Center in Saudi Arabia. During Riyadh’s LEAP tech conference, AWS pledged to invest US$5.3 billion into Saudi’s technology market which will be focused on setting up cloud data centers. Based on interests, budget influx, and initial gen AI PoC requests from the region, service providers are expecting Saudi Arabia to be one of the fastest growing gen AI hotspots.

In a nutshell, Saudi Arabia is the new kid on the block, and all its strategies are aligned to become an AI superpower. Riyadh will soon be transformed into a gen AI innovation hub with service and tech providers flocking to it for new deals, investments, and strategic discussions. While LEAP 2024 was a massive success with the who’s who of the tech world in attendance, providers and technology enthusiasts are already looking forward to DeepFest and what Saudi Arabia will come up with next to try to claim its position as one of the top technology hubs of the world.

If you have questions about the key gen AI developments in the Middle East or would like to discuss recent trends in the data, analytics, AI, or gen AI space, please reach out to Mansi Gupta, [email protected].

Learn more about AI and gen AI in the blog, Agentic AI – Exploring its Enterprise Potential, to learn about agentic AI, the next frontier in AI-based automation.

Core Banking in the Age of Transformation: A Ride from Legacy to Modernity | Blog

June 20, 2024

For years, core banking systems have been the backbone of financial institutions. But the landscape is shifting, and customers have high expectations. Nimble FinTech startups with cloud-based solutions are challenging traditional banks. In this dynamic environment, core banking systems are under more scrutiny than ever before. Reach out to discuss with us.

Legacy core systems, while reliable, are monolithic and struggle to meet today’s needs for hyper-personalization and real-time experiences. They’re expensive to maintain, slow to adapt, and can’t deliver the seamless, personalized experiences customers now expect. As the volume of transactions increases, the rise of open banking accelerates, and the need for real-time processing picks up, these limitations become clear.

The winds of change: M&A, strategic partnerships, and modernization

The core banking landscape is shifting. Mergers, acquisitions, and partnerships between technology providers and financial institutions are on the rise. This consolidation sends a clear message: modernization is no longer optional, it’s essential for survival. For instance, Visa’s acquisition of Pismo, a cloud-native core banking platform provider. This move strengthens Visa’s ability to offer banks next-generation solutions, while Pismo gains access to Visa’s vast network and expertise.

Banks across various markets are recognizing the need for modernization and are actively partnering with service providers to upgrade their core systems. These collaborations highlight the growing understanding that modernization is key to staying competitive and meeting evolving customer demands.

Progressive banks are adopting next-generation core banking platforms offered by leading technology providers that are:

Cloud-native: Built for scalability and agility in the cloud, enabling banks to adapt quickly
API-driven: Open APIs make it easy to integrate with fintech solutions, fostering a more personalized banking experience
Microservices-based: This modular design allows for faster innovation because components can be swapped out and updated independently

Demystifying modernization: A roadmap for success

Banks are understandably cautious about core modernization due to its critical role in daily operations. Several approaches are available, each with its own pros and cons:

Journey-led progressive modernization: This step-by-step approach prioritizes flexibility by building a digital layer around the core. APIs are exposed for better integration, while legacy parts are gradually replaced with modern microservices. Based on our conversations, this is the most preferred choice (5 out of 10 banks) as it minimizes disruption and allows for incremental changes
Big bang replacement: A complete switchover to a new platform, a faster but riskier approach that requires careful planning and execution. Smaller banks with less complex systems often choose this route (2 out of 10 banks)
Other approaches: Re-platforming, re-factoring, and leveraging a new tech stack for greenfield banking are other options, each suited to specific needs and risk tolerances

However, these approaches are not without their challenges. Change management and the need to decommission legacy systems can be challenging, while progressive change can result in higher costs and the need to adapt to constant technological shifts. Data migration, the availability of a scalable talent pool, vendor lock-in, and cost overruns are additional hurdles that banks must navigate.

Implications and opportunities for service providers

The core banking transformation journey presents a significant opportunity for SPs. Banks will need increased consulting and implementation support as they navigate this complex transition.

The journey-led progressive modernization approach, the most preferred by banks, is a long process that requires extensive guidance. Banks will seek expertise in areas such as modernization and decommissioning strategy, change management, data migration, talent acquisition, and system integration. This translates into a higher demand for consulting services, where providers can leverage their industry knowledge and technical expertise to guide banks through the transformation journey.

The road ahead: A collaborative future

The future of core banking is a collaborative one. Banks and SPs will need to work together to unlock the full potential of next-generation core banking solutions. By embracing innovation and forging strategic partnerships, banks can stay competitive and deliver the exceptional experiences that customers demand. This transformation goes beyond just a modernized core; it paves the way for a future of hyper-personalized financial experiences.

Currently, technology providers can participate in our Core Banking Technology Top 50™ Report assessment. We will rank technology providers based on their scale of core banking business, client geography mix, and significance within the core banking platforms market (retail and commercial). Submit a request to participate.

To learn more about core banking, contact Ronak Doshi, [email protected], Pranati Dave, [email protected], Kriti Gupta, [email protected], and Laqshay Gupta, [email protected].

Sourcing BFSI leaders can also request to join the exclusive virtual roundtable, Banking, Financial Services, and Insurance Leaders Discuss: 2024’s Top Trends in Tech and Ops Sourcing, to learn about the latest trending issues shaping tech and ops sourcing within the BFSI sector.

Enhancing Customer Experience through AI-driven CX: Bringing Innovation and Human Connection Together | Blog

June 18, 2024

Read on to explore how AI is revolutionizing customer experience (CX) in today’s fast-paced digital landscape. In this expert analysis, you will learn how AI-driven solutions enhance customer journeys, personalize interactions, and streamline operations. Discover the pivotal role of human talent in ensuring the success of AI-driven CX and how businesses can harness these innovations to create seamless, customer-centric experiences. Reach out to us directly to discuss this topic further.

In today’s fast-paced digital landscape, customer experience (CX) stands at the forefront of business success. Companies are increasingly turning to AI to revolutionize their customer interactions, streamline operations, and provide a seamless journey from start to finish. AI-driven CX is not just a buzzword; it’s a game-changer, offering a host of benefits to both businesses and their customers alike. In this blog, we’ll delve into how customers stand to benefit from AI in their journey and highlight the pivotal role of human talent in ensuring the success of AI-driven CX.

Enhancing the customer journey with AI

Imagine a seamless, personalized experience tailored precisely to your preferences and needs, available at your fingertips. That’s the promise of AI-driven CX. From personalized product recommendations to proactive customer support, AI empowers businesses to anticipate and meet customer expectations like never before.

Elevated experiences: hyper-personalization for unparalleled connections

One of AI’s biggest benefits for CX is using data to achieve true personalization at scale. AI can analyze a company’s vast pools of customer data – from transactions to browsing behaviors to communication histories – to build rich customer profiles. It can then surface insights to deliver experiences tailored to each individual’s preferences, needs, and contexts.

For customers, this enables a new level of relevance from the brand interactions they receive. AI-powered recommendation engines, such as those from Netflix, Spotify, and Amazon, ensure customers always see the most fitting content or product suggestions.

For businesses, envisioning how AI-powered recommendation engines could work in their own context unlocks a new level of relevance in brand interactions. AI algorithms can ensure that customers receive personalized recommendations for support resources or solutions tailored to their specific needs and preferences. Moreover, AI can personalize messaging tones, channels, and cadences for outreach, creating smoother, more engaging experiences for customers. By leveraging AI in this way, customer service teams can deliver proactive and tailored support that addresses customer needs efficiently and enhances satisfaction.

Anticipating needs: proactive care redefining customer support

AI opens up powerful new possibilities for proactive customer care. With machine learning models analyzing data patterns, businesses can anticipate customers’ likely future needs or issues and be proactive about resolving them. This benefits customers by allowing problems to be addressed before any major disruption or frustration occurs.

For instance, a telecom company notices an increase in calls related to a network outage in a specific area. Instead of waiting for frustrated customers to flood the lines with complaints, the contact center proactively sends out automated notifications to affected customers, informing them of the issue and providing estimated resolution times. Additionally, the system identifies high-priority customers, such as those with critical business needs or medical emergencies, and prioritizes their inquiries for immediate resolution. Another example is when an insurance provider utilizes proactive outreach strategies, such as sending notifications when insurance coverage is expiring or subscriptions are ending, along with discounts or offers for renewals.

Efficiency amplified: faster, smoother, better resolution times

When customers do need to directly engage a brand for support, AI can accelerate resolution times and reduce frustration. Conversational AI assistants are becoming smarter at understanding complex language to quickly identify the true intent behind customers’ requests. From there, AI can directly handle simpler queries, tasks, or transactions through self-service.

For instance, an AI assistant could autonomously resolve a customer asking to return a parcel by walking through the process and initiating a refund. For more complex cases, AI can automatically route the conversation to the right human agent or department for seamless escalation.

This AI-powered triage and assistance cuts down tedious back-and-forth, reducing resolution times and customer effort. When human employees are looped in, they have full context to focus on providing a tailored, speedy resolution.

The human touch: why human talent matters in AI-driven CX

While AI brings transformative capabilities, human agents remain vital for delivering empathetic, personalized customer experiences – especially for complex, emotional situations. AI can augment and empower human workers, rather than replace them. Here’s why human talent is crucial in AI-driven CX:

Empathy and emotional intelligence

AI may excel at analyzing data and predicting behavior, but it lacks human empathy and emotional intelligence. Empathetic human interactions are essential, especially in sensitive situations or complex inquiries where understanding and compassion are paramount. Human agents can empathize with customers, actively listen to their concerns, and provide personalized solutions that resonate on an emotional level.

Complex problem solving

While AI can handle routine queries and tasks with efficiency, complex issues often require human intervention. Human agents possess critical thinking skills and domain expertise to navigate intricate problems, adapting to unique situations and finding creative solutions. By combining AI’s automation capabilities with human problem-solving skills, businesses can deliver comprehensive support that addresses the full spectrum of customer needs.

Building trust and loyalty

Trust is the foundation of customer relationships, and human interactions play a vital role in fostering trust and loyalty. Customers value authentic connections with human representatives who demonstrate understanding, sincerity, and integrity. While AI can streamline processes and deliver personalized experiences, it’s the human touch that cultivates meaningful connections and builds long-term loyalty.

Continuous improvement

Human feedback is irreplicable for refining AI algorithms and enhancing the customer experience. Human agents act as the last checkpoint before messages reach customers, ensuring authenticity and relevance. Moreover, with AI’s potential to hallucinate, skilled agents play a crucial role in validating AI-generated insights and enhancing the overall customer experience. By fostering collaboration between humans and AI, businesses can achieve continuous improvement in their customer operations and stay ahead in a competitive market.

Conclusion: the future of customer experience (CX)

In the dynamic realm of CX, the fusion of AI innovation and human expertise emerges as a cornerstone for success. As businesses embrace AI-driven solutions to streamline operations and personalize interactions, they can unlock unprecedented levels of efficiency and customer satisfaction. However, amidst these technological advancements, the pivotal role of human agents cannot be overlooked. With their empathy, creativity, critical thinking, and problem-solving abilities, human agents add an indispensable touch to customer interactions, fostering trust and loyalty in an increasingly digital landscape. By striking the right balance between AI-driven innovation and human connection, businesses can navigate the complexities of CX, delivering seamless experiences that resonate with customers and propel their brands to new heights of success.

For more details on customer experience and AI reach out to Rishav Kumar, [email protected], or Aishwarya Barjatya, [email protected].

Learn more about how to utilize AI and its latest iteration, generative AI, for anticipating CX needs in the LinkedIn Live session, Leveraging AI for CX.

Could CRISPR Genome Editing Technology Impact Your Business? | Blog

June 17, 2024

One of the SciTech trends I’m currently paying attention to is how scientists are developing CRISPR genome editing technology. When fully developed, it will dramatically affect food product manufacturers, the farming industry, and consumers. Many communities cannot produce enough food products for their population because of natural disasters, climate change, and other destructive factors. But food security is not the only area of importance. It will greatly impact several industries, especially healthcare and the pharmaceutical space. It promises to be disruptive and transformative when and if it enters the mainstream market. What do you need to understand about how it could impact your business?

The Mapping the Next: Key Priorities for 2025 webinar is almost here! Register today.

Category: Blog