Financial Technology Investments Strategies to Boost ROI


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As financial industry CIOs face challenges for suitable financial technology investment, following a strategic approach will help them do it wisely.

Tech leaders are revamping their technology investments according to the turbulent economy and other external forces affecting technology adoption.

The finance sector has some very niche requirements for security tools. While financial companies see technological investments as critical to compete with competitors, they must update business models, meet shifting consumer expectations, and increase technology adoption to boost ROI.

Why Consider Investing in FinTech?

Technology investment can help financial companies to offer new products or integrate tools into existing processes to boost productivity. A call to invest in technology is a priority for financial companies to scale services to customers and drive growth.

New financial products and technologies are constantly hitting the market, which is always cutting edge due to adopting the latest technologies.

That makes it imperative to invest in FinTech to keep delivering new products and integrate to-scale processes to stay competitive. In addition, proper investment also attracts investors and collaborations with bigger companies, leading companies to boost ROI.

As the finance industry is expanding, there is a pressing need for CIOs to consider technology investment actively. According to Allied Market Research report Fintech Technologies Market Global Opportunity Analysis and Industry Forecast, 2021-2030, the rate of the global FinTech market was $110.57 billion in 2020. It is estimated to reach $698.48 billion by 2030 at a 20.3% CAGR from 2021 to 2030.

When a financial firm invests appropriately in technology, its business grows faster and establishes trust among investors and customers. Certainly, FinTech companies are at higher risk, but CIOs need to understand how and in which technology to invest and fast. Making their responsibility a bit stress-free, here are result-oriented tech investment strategies to focus on and speed up the investment cycle.

Tech Investments Strategies for Financial Sector

Although some companies have been postponing FinTech spending due to the economic turmoil, they need to make faster decisions, and here are some lines of thought.

Digitalizing the Backend Office Processes

Backend office processes such as payments, banking, account management, customer services, and resources need complete digitalization. They support financial businesses and their front-facing operations. Automating these activities will add to scalability and make the metrics of operations measurable. The metrics and scalability will help to decide when and what technology is required. Gartner finds in Finance Technology Through 2025 that 40% of finance roles will be autonomous by 2025 as technology investment will continue.

Automated finance operations tools will enable a target-oriented operating model. The model operates by self-learning software agents that optimize front, middle, and back-office operations. As automation is a critical focal point, they need to invest wisely in transforming finance-backed office processes to lead product production and tech integration ahead.

Renegotiate Contracts

With the rising competition among giant FinTech companies, they must prioritize continuous communication with contracts, including vendors and buyers over costs, and renegotiate to boost investments. Negotiations are complex now. However, close interaction with MSPs will get better information about the trending financial technology for investment. A constant review of every latest software in the business is paramount before investment.

Collect Font-line Insights

When assessing ops tools in the market, the CIOs should consult the users to understand the exact requirements. It will be easier to match these requirements to the software available. Finance products require solution-driven technology. The leaders must know how to invest in FinTech tools and systems to advance processes and products.

Introduce or Boost Cloud Computing

The Gartner Forecasts Worldwide Public Cloud End-User Spending report mentions that global end-user spending on public cloud services is forecasted to increase by 20.7%, totaling $591.8 billion in 2023. In 2022, the spending was $490.3 billion. That means cloud computing or cloud spending will grow and be the primary target investment among tech leaders.

Finance sector technology leaders are ready to enhance existing cloud usage or adopt new cloud-based tools and technologies, especially due to rapid digitalization. Reasons such as the availability of broader, deeper data on the value of cloud computing are urgently forcing leaders to shift their focus on cloud spending.

In addition, refining key performance metrics, such as cost per sale, is a big focus. Companies must negotiate with cloud computing providers to build cost-effective stacks and track their advancement. This will help evaluate investments and track futuristic technology investments. As technology innovations rise, financial companies also need to focus on the future needs of their customers so that they can refine their technology investments.

Also Read: How Fintech Solutions Can Help Promote Financial Literacy

Acquisition and Partnerships

Being the first mover sector for technology adoption, finance companies today invest in advanced technologies before other sectors. Financial leaders and managers must continue to look at investment rates as an effective way to acquire digital capabilities and services. Acquisitions and partnerships can boost technology investment and drive ROI. Partnerships strategies include systematic partner selection, smart resource allocation, and integrations. All partnerships must be aligned with the business, customer, and technological objectives to succeed.

Deloitte’s study Driving Innovation in Investment Management finds that the financial industry has spent above  USD 1 trillion on technology investments in the past four years. Still, there’s often a lack of clarity about financial technology investment due to delays in modernization projects, siloed data hampering innovation, and a lack of alignment across product development. Mastering technology investments will be essential to maintain a competitive edge.

What Should CFOs Do Next in Technology Investment?

As digital transformation makes companies more competitive, they must adopt and deploy new technologies by actively investing in the right Fintech tools. These strategies can help them to consider the broader and longer-term objectives while making technology investment plans. They should also engage with innovative thinking to make this transformational journey successful.

Anushree Bhattacharya
Anushree Bhattacharya
Anushree Bhattacharya is a Senior Editor with TalkCMO, where she covers stories on B2B business strategies and digital marketing. She is a quality-oriented professional writer with eight years of experience. She has been curating content for the B2B marketing industry, and her writing style is inclined toward how businesses want to perceive information about emerging digital transformations in the marketing landscape with latest developments. Anushree blends the best information on trending digital transformations, technology-driven stories, and SEO-optimized content. Anushree is proficient in curating information-driven stories about marketing for TalkCMO publications.


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