Seamlessly connecting your people, processes, and data helps to eliminate friction across your organization, breaking down silos to drive frictionless, connected finance operations.

Breaking down silos and integrating your finance and accounting (F&A) processes is crucial for driving enhanced business outcomes.

But what causes this barrier between teams – and how can you eliminate them to drive the Frictionless Enterprise?

A lack of common goals and information flow drives siloization

Different departments within the F&A function and the wider enterprise have always required different resources and levels of expertise. However, this often leads to different teams or departments (e.g., payments or HR) only focusing on their own goals, without considering how they can drive the overarching business strategy of their organization.

On top of this, most organizations suffer from a lack of structure created by the market’s shift towards specialization of role. Departments are often filled with people dedicated to just one role, such as queries management or payments, who are not encouraged to interact with the wider function or organization they operate in.

And the challenges don’t stop here.

Leveraging different supporting tools, technologies, and structures across F&A teams can further fragment an already extremely disconnected finance department. Take the record-to-analyze (R2A) process, for example. Its main task is to ensure all financial transactions and data across the organization are properly reflected in your accounting system, giving you a reliable view of your finances at month end. Your R2A teams will struggle to analyze data coming out of functions such order-to-cash (O2C) and procure-to-pay (P2P) that have their own, specialized tools to manage purchase orders and process invoices.

All of these factors create silos in your organization – but how do you eliminate them?

Eliminating silos through integrating your people and data

The obvious solution is to integrate your people effectively. To do this requires common business goals to be clarified and communicated clearly to your teams. Establishing the use of common collaboration tools across all your departments to exchange messages and data efficiently, transparently, and at speed can significantly improve accelerate your efforts.

Data coming out of your finance function is the foundation for sales, planning, and marketing activities. Breaking down silos requires data to be integrated across your teams and departments, leveraging the right technology to ensure data coming from different sources is orchestrated properly.

In conclusion, silos hinder the flow of information and data between departments. Overcoming this challenge requires you to seamlessly connect your people and processes, while also being able to address and mitigate every point of friction in your operations.

To learn how Capgemini’s AI.Controllership solution integrates with your systems and infuses AI into your processes to break down silos and give you more time to focus on insights, analytics, and your business partners, contact: malgorzata.bateup@capgemini.com

Nowadays, the extent of FinOps’ success depends heavily on how well it fits into the organization of your business. The challenges that businesses face along the way will also vary accordingly. Every cloud endeavor can benefit from FinOps; the question is, where should you focus your team’s energy?

FinOps in traditional organizations

In a traditional organization’s structure (one without a lean / agile management structure / DevOps), the primary challenge to implementing FinOps is the limitation on providing – and reacting to – real-time cost data. In this context, FinOps would aim to provide visibility on cloud costs on a regular basis (ideally weekly/ bi-weekly, but no less than monthly) as required by the organization as a starting point. The speed of change to enable cost-optimized and scalable cloud environments will be somewhat slower than what an agile organization might achieve, but significant nonetheless.

In traditionally structured organizations, FinOps practitioners work best when they’re able to collaborate across different departments while organized under a clear corporate identity. They might be a team under the finance department or, preferably, an IT or cloud center of excellence. The FinOps team thus provides a holistic view of cloud costs and plays the role of advocates, enabling better decisions by leaders on how to manage their cloud spending.

FinOps in agile organizations

By adopting contemporary IT management practices such as agile and DevOps, organizations can react faster to changes in business and technological demands. One of the key elements is to group the developers and engineers together with the operational people to develop, run, and enhance IT solutions faster. This is where FinOps should also participate in the DevOps teams to provide input to ensure that the cloud solutions deployed and operated can create the intended business value at the lowest possible costs.

Effective FinOps also comprises collaboration with operations teams – especially cloud operations teams. This is where FinOps plays its critical role of integrating with its counterparts, such as DevOps and SecOps, to ensure they can measure and create the intended business value from their applications and architectures. FinOps practitioners should work closely with cloud and IT security architects to define KPIs and accountability. Through this collaboration, FinOps experts can enable and advise on real-time cost visibility, thus building cost-effective architecture and solutions.

Centralized vs. decentralized FinOps

Another organizational discussion is on whether to centralize or decentralize FinOps-related activities. This too depends somehow on how flexible or agile the organization is. Take reservations purchases as an example. On one hand, decentralizing the reservations and savings plan purchases can ensure accountability of the application owners on their own cloud costs. On the other hand, these purchases (and their management) would preferably be centralized from a risk management perspective, in order to avoid generating idle reservations as a result of resource class or architectural changes.

The central role of centers of excellence

No matter what organizational structure a company has, the existence of a FinOps expert team is crucial. Your FinOps team, which might evolve into a center of excellence, maintains the holistic cloud spend picture while enabling cost accountability down to the lowest organization level possible.

Individual organizations will always face different challenges. The strength of a well-run FinOps team is its ability to adapt to the terrain and provide consistent visibility and savings. Hence, it is time to start building up your FinOps team and move your way through the journey of realizing the values of cloud.

A leader in cloud and operational optimization, Capgemini is helping organizations around the world to optimize their cloud services, saving money and lowering their carbon footprint.

Looking to go deeper into FinOps? Read more in our new white paper here.

Capgemini’s award-winning Automated Finance Code tool leverages AI to create and track codes quickly and easily to drive rapid, accurate, and scalable transaction processing.

Project codes are a critical part of an organization’s finance and accounting operations, enabling the finance function to process transactions quickly and efficiently. They consolidate transactions across multiple organizations and accounts, enabling the total costs associated with a project to be calculated.

Generating these codes, however, can be challenging.

Finance teams often receive information manually from many sources in non-standardized formats (email, Excel etc.), and also send code creation instructions, error reports, and maintenance requests to requesters manually, making the code creation process extremely time consuming.

Couple this with the need to create thousands of codes annually, is it surprising finance teams experience high turnaround times and a variety of accuracy issues in creating project codes during the month-end close period?

Leveraging RPA to automate and accelerate the code creation process

Capgemini saw this as an opportunity to develop an Automated Finance Code tool that enables codes to be created and tracked in real time. This simplifies and significantly accelerates the finance project code creation process, driving rapid, accurate, and scalable finance transaction processing.

The tool leverages a project maintenance form (PMF) to standardize information sources and formats, and highlight errors before they reach finance teams. It also uses UiPath’s robotic process automation (RPA) technology to create and maintain codes and their related master data. And by replicating bots across multiple channels and dividing the workload between them, the tool helps finance teams to address and resolve code creation volumes in real time.

Award-winning code creation technology

All of this is why Capgemini’s highly scalable RPA-based tool recently won an AI Breakthrough Award, 2023 in the “Best Robotic Process Automation Solution” category.

And for Capgemini, the tool has led to a range of tangible business outcomes, including up to 70% reduction in finance project code creation and maintenance time. No wonder it is looking to rollout the tool to its finance teams across the globe in the near future.

To learn how Capgemini helps finance teams unlock value from their finance function through next-generation, AI-augmented finance operations, contact: abhinanda.roy-chowdhury@capgemini.com

Improving finance processes through an automated self-service platform builds lasting relationships with your customers

Customer experience is a crucial differentiator across industries, as everyone wants to interact with companies in a pleasant, efficient manner.

As a result, seamless support for finance and accounting queries, transactions, processes, and other various operations is now the norm in the finance industry, as this offers your clients access to your services through any device using simple messaging and self-service technology.

But what if you’re struggling to implement a setup such as this? And how do you ensure you can keep pace with everything your customers expect? Especially, in a world where they can now do everything on-the-go – from paying bills, to booking a vacation, and even working.

The benefits of a self-service finance platform

One of the easiest ways of addressing this challenge quickly is to implement a next-generation, self-service finance platform that provides a single-source of information for all your finance teams and processes.

By delivering augmented, frictionless interactions and transparency across your entire finance chain, a platform such as this maximizes the efficiency of your finance processes and significantly increases your customer and employee satisfaction alike. It also meets the needs of your ecosystem of employees, suppliers, procurement, organizations, and service providers to drive value across your finance cycle, including:

• Deploying a one stop shop mindset
• Putting business transparency at the center of your operations
• Injecting automation into your assignments and workflow
• Improving services, experiences, and productivity.

Automation helps deliver the experiences customers expect

Self-service finance platforms achieve all of this by automating key finance processes including supplier onboarding, master data management, exception-handling, input checks and rejection, and query management processes.

Additionally, by implementing more automation into your finance processes, fewer agents are needed to run your key financial tasks – giving you more time to improve your finance teams’ way of working, whether they work in order-to-cash, accounts payable, or controllership etc.

All of which improves employee satisfaction, service quality, and customer satisfaction as a result – while also giving you the ability to adapt faster to market changes when they occur moving forward.

Putting customers first makes overcoming challenges easier

Capgemini’s Digital Concierge Intelligent Portal – powered by Zendesk – connects and automates data across your finance teams to provide a single-source of finance information in real time.

Built on designing, implementing, and optimizing solutions that drive personalized, flexible customer experiences, Capgemini and Zendesk’s approach keeps you connected, which helps you build lasting relationships with your customers, despite any disruptions or challenges they might encounter.

Learn more about how Capgemini’s Digital Concierge Intelligent Portal, powered by Zendesk, drives synergies across your upstream and downstream finance chain to ensure smoother finance operations by contacting: ewa.lichtenstein@capgemini.com

Working with the folks at the Capgemini Research Institute is always fun, when we set up the surveys the intent is always to find things out rather than prove them. With the latest report on Consumer adoption of Generative AI that mindset has led to me losing a friendly wager. Because I was absolutely sure we’d see a generational divide with GenZ in particular being ahead of the game. This is because that is what we nearly always see with new technologies. Instead what we saw is that actually adoption was pretty flat across all groups.

That is over 50% of the 10,000 people interviewed who have tried Generative AI tools, realistically in the 7 months since ChatGPT launched.

50% penetration in 7 months. That is frankly amazing. But what I find more amazing, and heartening, is that this adoption isn’t a “TikTok” curve with younger generations far outstripping older ones, its pretty even across the board, with Boomers actually being a few points ahead of the game. When we look at where they are using it, well that gets even more interesting for me.

Although its a statistically small difference, its great to think of GenX and Boomers getting the edge in Fortnite by using Generative AI! Seriously though, this again shows a very even adoption across the age ranges, really aligning to the ease of use that Generative AI tools enable. It also plays to one of the old adages of technology: There are two industries that drive new technology adoption, Computer Gaming is the other one.

On satisfaction there are some interesting differences, with Millennials and Boomers noticeably preferring the gaming experience but also noticeably liking the search experience much less. Clearly a lot more research is going to be done over that search category, as that represents a very clear an obvious market battle ground, but with two thirds of Boomers already liking the experience it isn’t a case of bad needing to become good, its good needing to become great. As we know however when we saw Google take over from Altavista, the market impact of good to great is dramatic.

OK but there is too much trust here

One finding in there that worried the Trusted AI person in me was the level of trust that all generations have in the created content.

Again we aren’t seeing differences based on age, with nearly 75% of people across all age ranges saying they trust the content. For a technology to have this sort of approval after only 7 months is remarkable, and a little bit concerning. I might be more on the Trusted AI side, but I’ve had enough experience with several models now to say that my trust level in the content isn’t terribly high and I’m validating what I see. There is a risk here that misplaced trust becomes a problem. That this is constant across the generations is extremely interesting though, as often we’d expect older people to distrust new technologies more.

Caveats and more research

So this is a very detailed report that I advise you to read all of the report, and I’ll finish with a few caveats on the data, firstly out of the 10,000 people surveyed 600 were Boomers, that is still a significantly significant sample, but it is less than the number of GenZ people interviewed, which means that the GenZ numbers are statistically more accurate. The other piece is that the education levels are statistically high, with over 75% having at least an undergraduate degree. This means that while within those groups the age discrepancy is low, you can’t say that this is constant across education ranges.

Much more research remains to be done, but one thing is for sure, the ease of use of Generative AI is clearly something that isn’t age dependent.

This article was first published on Medium on June 21, 2023.

Customer centricity might seem like a secondary concern for banks – but it isn’t.

Some firms may view customer experience (CX) initiatives as a trade-off and prioritize other outcomes that they see as having a clearer link to value, such as cost reduction or revenue growth. This may lead to customer experience initiatives being deprioritized or underfunded during budget season.

However, studies have shown that businesses that prioritize CX outperform their competitors in terms of revenue growth, customer loyalty, and brand reputation. Investing in CX initiatives can lead to a range of benefits, such as increased customer satisfaction, reduced customer churn, and improved brand perception. These benefits can ultimately lead to increased revenue and profitability, as well as reduced costs associated with customer acquisition and retention.

Prioritizing revenue growth and cost savings without embedding a customer-centric approach and culture into the firm is tantamount to leaving a well of resources untapped; it is important for firms to recognize that CX is a critical factor in achieving long-term success and sustained growth.

In recent years, many banks have recognized the importance of putting customers at the center of their business strategies and operations and have taken steps to translate this recognition into meaningful action. But the level of preparedness of banks to leverage CX varies depending on the specific bank, its culture, leadership, and resources.

Some banks have implemented customer feedback mechanisms, such as surveys and focus groups, to understand customer needs, preferences, and pain points. They have also invested in predictive analytics and data management systems to gain insights into customer behavior and preferences, and to personalize their customer journey. Banks have also made efforts to improve CX by simplifying their processes, providing digital solutions, and creating more responsive and empathetic customer service.

However, despite these efforts, some banks still struggle to truly prioritize customer centricity and embed it into their culture and operations. This can be due to a variety of factors, such as resistance to change, legacy systems, lack of resources or expertise, or conflicting priorities. Additionally, some banks may have a fragmented view of their customers across different business lines, which can hinder their ability to provide a truly seamless and personalized experience.

While many banks have taken steps to translate customer centricity into meaningful action, there is still room for improvement. To be truly customer centric, banks must continue to listen to their customers, leverage data and analytics, simplify processes, and align their entire organization around the goal of delivering an exceptional customer experience.

To do this, organizations need to have a customer-centric mindset and approach that extends beyond just their digital services. CX work is interdisciplinary and requires expertise in strategy, design, development, and organizational structure to effectively improve the experiences of both internal and external customers. This may involve redesigning internal processes, the target operating model (ToM), and policies to support better customer experiences.

Overall, improving the customer experience is an ongoing process that requires a collaborative effort from all parts of an organization, and a commitment to continuous improvement based on feedback and data.

Therefore, firms should not view CX initiatives as a trade-off, but rather as an essential component of their overall strategy. By investing in CX, firms can create a sustainable competitive advantage and drive long-term growth and success.

How to gauge your CX maturity level?

Banks can gain valuable insights into their CX maturity by assessing five essential components – people, process, data, technology and business strategy. Below is a comprehensive framework which banks can leverage as guiding principles to measure their CX maturity against these five pillars:

This article is the third in our series of deep dives on the challenges of T+1. The first articles focused on:

• The urgency of completing a T+1 impact assessment now to be ready for May 2024
• The importance and opportunity that counterparty performance offers

For this third installment, we want to focus on operating models, and look at the global impact that the North American shift to T+1 may have on the financial market institutions.

North America’s T+1 – A global disruption to your operating model:

The impact on the operational team to accelerate their activities and meet the end-of-day affirmations and allocations deadlines could see an increase in operational risks. We believe that the impact on the front office, cash management, and inventory team could also be significant.

From the industry working groups, surveys, and our direct client interactions, we have identified four areas of impact on the global operating model:

Cost of failure. With the acceleration of the settlement cycle, the risk of failing trades increases due to the compressed timeline to manage exceptions (e.g., RAD, RTTM, allocations, new accounts, and incorrect SSI). This will drive higher impact on P&L, especially as the current overnight interest rates used to calculate interest claims are at their highest level in a decade.

International realignment (e.g., US corps). A few North American assets in scope under the T+1 change can settle at different depositories (e.g., US corporate bonds settle on T+2 in Euroclear). Often, trading and booking systems do not contain or capture depos or intended settlement date inventory information; these calculations are left to the inventory management or SBL systems. This could lead to systemic shorts, where a trader sources a US asset on a T+2 depo but sells it on a T+1 basis in the domestic US market. This could cause settlement fails due to short inventory and result in interest claims.

Funding and FX. International investors, buy side firms, and even smaller brokers and dealers could see challenges with their daily funding requirements and cash management. Firms that are funding their purchase on the FX/MM market on a T+2 basis will need to adjust their timeline to meet requirements by T+1, or risk failing purchase transactions or face overdraft charges from their custodians or agent.

Stock borrowing and lending. Borrowing and lending functions, whether for stocks or corporates bonds, could also cause settlement fails. There is a risk that the current borrowing and recall timelines cannot meet a T+1 cycle, which may drive inventory management challenges and result in fails and interest claims.

An impact beyond the operations team: will your front office / investors grab the opportunity?

These four global operating model challenges could also be seen by firms as an opportunity to perform better than their peers, to embrace the “spirit” of the regulation, and strive for a more efficient, more liquid, and less capital-intensive North Americas settlement cycle.

At Capgemini, with our track record of large technological transformation, we believe this type of market change creates opportunities for challengers to become leaders, and ultimately create a better financial market for retail investors.

Inaction is not an option

Firms need to take swift and decisive action in at least three areas:

Optimize your pre-funding and FX management. Firms need to fully understand how they currently fund their US and Canadian trading activities when they place their FX trades, and when they settle currently. These changes could bring additional costs.

“Just-in-time” borrowing/recalling/realigning. Inventory management, and communication between the settlement team, SBL team, and front office, will need to be optimized to reduce the risk of shorts. Organizational changes, SLAs, and operating methods will need to evolve through technological and workflow enhancements or operating model optimization.

Design and source inventory and funding information in near real time. Sell-side front offices need to be equipped with the near real-time MI and information from their middle office and operations teams to rectify trade errors as soon as they are identified to avoid costly fails. Buy-side firms should continue to increase their dialogue with their service providers (e.g., prime brokers, custodians, and middle and back office outsourcers) to fully assess the impact of the accelerated timeline and agree on a sustainable economic model.

The financial services industry is changing all around us. The trend started in the property and casualty insurance (P&C) industry and rolled into banking. And, let’s be honest, it was a necessity. Now we are seeing major changes occurring in the life insurance as well as benefits spaces. What’s bringing up the rear? Annuities and retirement.

The impact of disruptive tech and more

Regardless of which financial services sector you are in, you are being impacted by the current socioeconomic and geopolitical environment we live in today along with the changing tech pressures that come from the likes of Amazon and Netflix. Yes, those two companies may be operating in different industries, but they have had significant impact on consumer behavior. It isn’t enough that we have to keep up with changing interest rates and come up with different combinations of products to support our customers well into the future (when we don’t know what the future holds), but we also have to keep up with personalized approaches and on-demand technology that most consumers now expect as standard user experience.

Retiretech 2.0: A deep-dive into the state of the industry

Nassau Financial Group sees the need to support this industry and bring others together to discuss these challenges and the impact it is having on the retirement industry in their annual Retiretech forum. This meeting of the minds is key to the success of our industry and supporting our customers, but more importantly, it is a safe place to talk freely and ask the hard questions to those that are in the same predicament as you are! Retirerech 2.0 in 2023, held last month at the Capgemini Innovation suite in New York City, was attended not only by annuity providers and wealth management advisors, but by regulators, rating firms, start-ups, and distribution arms to discuss these hard topics.

Here are few of the highlights from experts who participated in the various panel discussions and expert talks during Retiretech 2.0:

• Although the industry has consolidated, the top positions in the market have changed quickly due to new product designs and fresh capital. As a result, competition for shelf space has never been fiercer. The value proposition for marketing firms buying smaller ones has also changed to emphasize technology.
• The discussion also addressed the evolving preferences of clients, with most people wanting to talk with an agent or advisor when making a large investment. However, a growing number of people are now comfortable with conducting these transactions online. Additionally, there is a growing need for education that agents can use to help their clients.
• With fewer workers to support an increasing number of seniors, there are mammoth funding challenges that countries and communities need to address. Different countries, such as Japan, China, Canada, and Western Europe, are trying to tackle this problem by adopting various policies, launching new products and services, and investing in technology.
• Too often, we focus on the technology and not enough on the person who needs our help. Retirement is about finance, but also about health, education, and a life of purpose. It will be less about older individuals and more about younger ones planning and saving for their future retirement. The industry can’t just focus on the baby boomer generation, it has to prep for more generations than it has ever focused on at once.
• Furthermore, life and annuity providers hold great promise in developing more personalized products in the future. Connecticut, in particular, hopes that innovation will help to close the insurance coverage gap, especially for underserved communities across the country. The state is committed to supporting the insurance market, in part because it is home to 110 domestic insurance carriers and licenses an additional 1,400 carriers to conduct business.
• To drive positive change in the industry, insurance regulators are rapidly building teams with the capability of supporting innovation activities. These departments recognize the potential benefits of innovation and the importance of creating an ecosystem that enables innovative insurance products to flourish.

How do we evolve in changing times?

In the end, we find ourselves in a cycle of change; of give and take. The lingering question to the audience was centered around the technology – the elephant in the room. Do you have what you need to evolve in these changing times? To meet the needs of new products that provide services and benefits that have never been applied? To meet the digital and personalized demands of not only your contract owners, but of your distribution partners? To connect with third-party partners, such as rating firms and data partners? The short answer from most, was no and we have a long way to go to get there.

It isn’t enough to add in new technology, we must solve for the technical debt in which we find ourselves. We must build technical wealth in order to meet these new needs. And we have to do it by creating scalability and sustainability while managing change at the same time. We have to reduce costs, create automation, and maintain business as usual.

Fortunately, there is a happy ending to this story and it isn’t that we are not alone in this world of change. There are more technology options today than there has ever been to support new product development, data integration, digital distribution, and policy administration. You don’t have to build it all. There may be some segments you want to build, but the great thing here is that low-code/no-code tools are a great accelerator. The best news: it isn’t something you have to do alone. There are consulting and systems integration partners like Capgemini who can help you make the right decisions on buy versus build, help you integrate or build, but more importantly help you design and achieve the RetireTech future you want.

Learn more about Retiretech by visiting, https://imagine.nfg.com/retiretech-forum-2-0/