The financial services area, in general, has undergone many transformations. Most companies in this segment have been impacted by the use of digital systems and resources, which aim to facilitate, optimize and accelerate sector solutions. This transformation brings with it a high IT operations cost, since to adapt, companies need a complete transformation of both infrastructure and software, as well as organizational culture. 

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The technological transformation reflects the market share variation of traditional banks and fintechs, creating a myriad of new financial products and services with the intention of generating business results for companies in the sector. 

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Between 2016 and 2022, 513 new startups in the financial sector emerged, totaling 1,289 such companies in Brazil, according to data from Inside Fintech. This growth meant that 40% of the value invested in Brazilian startups was directed to fintechs.

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With this, the market began to see the need to accelerate Open Banking, as well as banking as a service solutions and open innovation projects stood out. But the evolution of IT solutions does not stop, and goes far beyond traditional applications, internet banking, control systems, to name a few. Increasingly, the technology area presents itself as an enabler that supports various departments of financial institutions, since customer service strategies, user experience, data intelligence, among others, are needed.

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By understanding the impacts on project generation and management in the financial segment, we begin to deepen the problems and pain points of this sector that depends on the technology market.

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Why does high IT operations cost impact the financial sector?

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Reduced productivity

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Low productivity is often due to high employee turnover, since each time a new collaborator is added to a project, a study and adaptation period is necessary.

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But, in addition, this reduction in productivity is very common due to the lack of integration between the tools used by companies within the same project, requiring much greater effort than necessary to perform simple tasks.

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The high demand for activities, and a small team of qualified employees, means that the organization needs not only specialized teams to work on the project, but also good management so that all squads can evolve together towards the final goal.

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Lack of technical knowledge for problem solving, innovation and development of new products

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The lack of technological expertise is a problem in financial sector companies and is linked to the high cost of IT operations. This lack of knowledge among employees requires specialists to be hired to solve problems related to innovation and development of digital products.

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It is important to understand that, often, hiring a specialist company is very advantageous, since it will be able to manage the project and deliver it faster and more efficiently.

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Difficulty finding suppliers with segment experience

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A major difficulty in the financial sector is finding suppliers and partners with experience in the segment. Because of this, sometimes a single project needs multiple suppliers, each of whom will be a specialist in a specific technology. This generates a very active and complex partner management and organization demand, which can hinder project productivity.

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Project Generation and Organization in Financial Institutions

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The financial area tends to be more digitally mature compared to other segments, having an extremely diversified range of data applications.

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The use of Big Data mainly helps in risk management and fraud prevention, using data to identify patterns and suspicious behaviors outside the user’s routine.

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Important stages in digital project generation and organization

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There are some important points that a financial sector company needs to be aware of when hiring a technology partner, always considering the technological maturity stage of the company and its digital products.

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• Discovery & Prototype: To validate the development of a digital product, it is essential to define the project demands and product functionalities in order to show stakeholders how the solution will take shape and validate its usability with users. This stage is very important since, often, despite knowing the customer’s pain, the financial company has no notion of how to solve it, leading to technological debt.
• Digital Project: many managers do not have enough technological understanding to understand the needs behind the development of a digital product, making it necessary to understand how a technology partner will support the organization and meet the project’s demands and problems.
• Digital Transformation: at this point, it is important to understand how system integration will facilitate the company’s routine and day-to-day, as well as consider what the development efforts and real business impact will be. Since digital transformation has ceased to be a competitive advantage and has become a prerequisite, sector companies need to be aware of their technological partners’ credentials.
• Tech Sustain & Support: having a platform 100% available to users is also a clear need. If we use ready-made market solutions, this pain will probably not be met, since several adaptations will be necessary in the product to ensure alignment with that company’s specific processes. Being able to count on a technology partner who understands the specifics of the sector, beyond technological understanding, is fundamental for financial sector technology managers to have peace of mind in the evolution of their projects.

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How to reduce IT operations costs

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According to Robert Half Consultoria, the financial segment’s purchasing profile has changed in the last 3 years, making it necessary to review operations and reinvent itself.

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Open Finance & Compliance

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A company attentive to Open Finance challenges needs strong Compliance. Cyberattacks, according to Check Point (CPR), increased by 28% worldwide and 37% in Brazil during the 3rd quarter of 2022. In addition, in the financial sector, 1 in every 49 organizations was affected by ransomware attacks, a 17% increase compared to last year, demanding greater attention from IT professionals in defining processes, technologies and hiring well-prepared people to ensure maximum security of their systems.

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In Brazil, according to the English strategic management consultancy Oliver Wyman, the Open Finance ecosystem is expected to reach 60 million users by 2025. Companies like Zappts, a tech specialist in the financial sector, help large banks and financial institutions gain competitive advantages within the open finance ecosystem, aligning consulting, technological development and compliance optimization based on the regulations of the Central Bank of Brazil. This way, it ensures that its customers have the best digital experiences focused on the personalized credit journey, for example.

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For compliance in open finance to happen, it will be necessary to count on specialists from various areas, which generates a high cost, since it will be necessary to hire several qualified professionals.

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Bank as a Service

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Bank as a Service (BaaS) is a technological solution that allows a company to offer various financial services. In BaaS, bureaucracies related to the financial market are under the responsibility of the BaaS developer, duly authorized.

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The objective of BaaS is to allow more companies to participate in the financial market in a safe and efficient way, enabling any company to provide financial services in its portfolio. In general, the great bureaucracy of the financial market is usually a problem, which does not happen with the use of Bank as a Service.

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This type of platform works as a digital environment for the development and management of a payment chain, requiring specialists to ensure everything works in the best possible way.

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Quality Assurance Automation

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Quality Assurance is a set of procedures to prevent errors and failures in digital products and deliver them with the quality required by customers. QA is responsible for developing several tests to ensure the quality of the solution. These tests can occur in an automated way, without human intervention. Quality Assurance automation is gaining popularity in the market seeking to implement concepts like Agile and DevOps.

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Fintechs, in particular, need to rely on Quality Assurance Automation to ensure that their product development processes are safe, functional and reliable. The best way to do this is to have a good software developer, properly trained and dedicated to tests that will ensure the software meets the high standards requested by the client.

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Considering the competitive market environment, Fintechs need to consider agility and customer experience.

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Experience Design

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According to Febraban’s 2021 Banking Technology survey, mobile banking represents more than half of all banking transactions carried out in the year. Considering this scenario, Experience Design has become a necessity in financial institutions.

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The world is digital, and users demand a positive experience that solves their problems in a simple way.

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Fintechs, which are born fully digital, increase the need for this excellent experience design, which makes all the difference in attracting and retaining customers.

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For Experience Design to happen, it is necessary the involvement of specialists in design, products and development who will map user usability strategies, with the objective of optimizing them.

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Digital Channels

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Digital channels are present in everyone’s daily life, especially for the target audiences of the financial sector. From applications aimed at end users, such as apps for buying and selling assets, portfolio management, to platforms for relationship with investors and suppliers.

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According to Febraban research, in 2022 financial institutions recorded a 15% increase in the use of digital channels compared to 2021, driven by mobile banking. Today, 7 out of 10 banking transactions are already carried out through digital channels in Brazil.

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Financial movement through smartphones, for example, grew 75% last year. Febraban’s research also reveals that payment-related transactions grew 72% in mobile banking.

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These data confirm the high demand for Digital Channels, both for Fintechs and financial market companies, which need, more and more, to invest in qualified IT professionals so that these channels work satisfactorily for both the customer and the company.

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Looking at the internal processes of financial institutions, digital channels have become essential to boost relationships with target audiences. From platforms for relationship with resellers, investors and suppliers, to training portals for employees, onboarding platforms, identity verification systems, to name a few examples of digital channel applications in the sector.

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Pix & Financial Integrations Tools

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When we talk about Financial Integrations Tools, the idea is to centralize processes from various sectors in one place. This enables more dynamism and assertiveness to processes, since flows become continuous and automated.

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According to Rodrigo Mulinari, director of the Innovation and Technology Committee of FEBRABAN, the success of Pix adoption and use demonstrates Brazilians’ interest in interacting with technology. The payment method brought convenience and facilities for customers in their daily financial transactions, and has proven to be a powerful tool to boost banking in the country.

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To count on Financial Integrations Tools, it is necessary to choose a technology partner that is capable and has expertise in the financial market, so that the cost of this process is not too high and business results are enhanced.

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How can Zappts help reduce high IT operations costs?

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As we saw throughout the article, there are several analyses to be made to understand how the IT sector impacts project generation and management in the financial segment. The high cost of IT operations is an unquestionable challenge and requires a deep study on where to invest money and efforts to get the most out of the existing technologies within your company.

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Zappts can help your company reduce IT operations costs and enhance the return on technological investments. Since 2014, Zappts has guaranteed business results through technology, delivering high-relevance cases using agile processes, best development and software quality practices, and an unparalleled ability to understand and solve the day-to-day pains of technology development projects. Companies like BTG, Santander, Getnet, PagoNxt, Auttar and Porto trust their consulting and technological development processes with Zappts.

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We contemplate solutions for all phases of digital solution development, from discovery processes to solution sustainment. With defined processes and agile management, our deliveries are always based on expectation alignment, quality and technical robustness.