Connected finance: Expanding the precincts of experience | HCLTech

Connected finance: Expanding the precincts of experience

February 03, 2023
Bhavdeep Singh Sethi


Bhavdeep Singh Sethi
Vice President Intelligent Automation
February 03, 2023

“Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.” – Warren Buffett, American business magnate, investor, and philanthropist

Business outcomes are important. But for financial institutions, what separates the grain from the chaff is their adaptability to technological innovations and disruptions. And connected finance is the latest opportunity/challenge (depending upon who sees it how) in this dynamic ecosystem. It is an approach to financial management that integrates advanced financial tools, multiple aggregating systems, and diverse data sources. Connected finance supports a real-time view of financial functions and provides real-time business insights by leveraging disruptive technologies like AI, ML, and data analytics. Hence, it has emerged as a powerful business structure and growth strategy. Doing away with siloed data architectures, connected finance nurtures collaborative relationships within and between organizations and their customers if implemented methodically.

The value promise of connected finance

Connected finance is transforming financial organizations by unifying systems of data sharing. As per reports, the smart finance connectivity segment is expected to reach a market size of $286.70 million by 2027. A very encouraging sign of times to come, this can be expected to generate actionable financial insights and facilitate collaborations to impact ROI. The impact of connected finance can be observed in and as:

  1. CRM and ERP: Connected finance brings operational systems and solutions nearer to the real cadence of financial functions to enhance CRM and ERP efficiencies. It makes data from various business systems available in systems of record to support industry-relevant KPIs and the metrics necessary for informed decision-making.
  2. Dynamic decision-making: Connected finance supports dynamic decision-making by computing connected data. It offers organizations greater visibility and an enhanced understanding of their financial health by enabling access to real-time data pulled from multiple systems. With these data insights, organizations can introduce new practices and pipelines of revenue generation.
  3. Continuous collaboration: Real-time, unified financial data acquired from connected systems can also transform inter-departmental interactions. For instance, it can share insights on the impact of collaborative decisions on the cash flow of organizations. Apart from enabling cooperation within the organization, unified data also supports interaction with external stakeholders, such as vendors and partners, promoting true teamwork.

Technology as a force of change – its key drivers

The future of finance lies in unification. It enables connections that expand the precincts of experience and empowers organizations to become smarter, more agile, and change-ready. As the CFO of any future-facing organization that has undertaken finance transformation would agree, empowering technologies that support end-to-end modernization shape business outcomes tremendously. They are the forces of change. We know well of these cutting-edge technologies, but how are they delivering value? Let’s look at two of the leading technologies enabling digital transformation in financial services.

  1. AI

    AI is used extensively by financial organizations to improve their decision-making precision. With global spending on AI in the fintech market expected to reach $ 41.16 billion by 2030, it is clearly an engine of growth for connected finance. Financial organizations can achieve a competitive advantage by extracting data from many systems and generating insights to perform advanced functions by leveraging AI. These include identifying fraudulent transactions, adapting accurate and fast credit scoring, and automating manually intensive tasks for data management. According to Forbes, 70% of financial firms carry out their cash-flow event predictions, make credit score adjustments, and detect frauds by using ML, a subset of AI. Such systems also support better risk management of lending portfolios. They can analyze the degree of interconnectedness between borrowers by drawing data from connected financial systems.

  2. Data Analytics

    Financial analytics is, in essence, to identify patterns to make predictions. With data analytics, finance teams can gather real-time data from multiple systems and generate insights into KPIs like net income, generated revenue, and payroll costs, for faster decision-making. They sift through structured and unstructured data to improve their CRM and ERP efficiencies, enforce compliance, and deliver superior customer experiences. For instance, in the banking sector, 72% of customers deem personalization as “highly important” in today’s financial landscape. BCG estimates that banks can achieve as much as $300 million in revenue growth by personalizing their customer interactions for every $100 billion they have in assets. Finance teams can also use analytics to scrutinize and comprehend vital metrics to detect fraud and manipulation in revenue turnover. It comes as no surprise, therefore, that the global financial analytics market is forecast to grow to $19.8 billion by 2030.

The road map to a unified success story with HCLTech

From the perspective of what connected finance allows you to do, it has become a business imperative. Real-time visibility, agility, and streamlined collaboration have become non-negotiable business requirements. This is where HCLTech’s techno-functional frameworks and comprehensive transformation solutions focused on connecting systems offer a competitive edge―by enabling connected finance on auto-pilot for its customers. They ensure that financial institutions evolve in line with disruptions in the ecosystem and can identify opportunities amidst challenges. With HCLTech-enabled connected finance expanding the precincts of experience, the possibilities are seemingly infinite.

From the perspective of what connected finance allows you to do, it has become a business imperative. Real-time visibility, agility, and streamlined collaboration have become non-negotiable business requirements.

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