The movement towards digitization is a hot topic of conversation across many industries. The impact of technology means more agile and efficient systems, which can result in reduced operating costs and increased revenue for a business. Companies are embracing artificial intelligence (AI) and are automating certain processes, allowing them to sift through large amounts of data quickly and effectively.
With the application of new technologies, there are a number of benefits, especially relating to risk management. Looking at financial institutions, digitization can reduce the cost of monitoring risk activities by 20 to 30 percent while improving the amount of time and resources spent on complying with industry regulatory requirements. In commodity trading, digital technologies can be applied across trading and risk management value chains, allowing traders to analyse large quantities of complex data rapidly. Digitization can also improve middle and back office functions by removing the amount of manual processes required, including invoicing, contracts, reporting and margining.
Despite these advantages, some companies have been slow to roll out digitization across all functions, especially core risk management processes. Instead, they have applied a test-and-learn strategy, which mitigates the potential costs and consequences of any errors in a risk environment. However, it is clear that digital technology can bolster risk functions, especially in relation to regulatory compliance, in the long-term. Because of this, we are likely to see further movement towards a broader application of digital technology in business.
With the adoption of automation technology, we are removing some of the most manual intensive processes in the workplace, so how will this impact the role of humans across these functions? Professionals will need innovation skills; they must think outside of established organizational models to support digitization. They will also have to understand how to react to rapidly evolving technology.
How employees interact with technology will also change, so while some processes will be completely automated, humans will be expected to display competencies that AI cannot emulate, including good intuition and emotional intelligence.
As companies recognize the advantages of adopting digital technology, the workforce will have to adjust consequently. During this transition, talent will have to demonstrate flexibility, adaptability and the capacity to stay ahead in a rapidly evolving digital environment.
Above all, critical thinking will be crucial for many roles where a vast amount of information is quickly processed and is then applied to a problem.
The push towards digitization is gaining momentum across industries. It is therefore crucial that businesses think ahead and recognize the skills that employees need in order to work in tandem with changing technology and succeed in the face of a brave new digital world.
by Chrissie Tideyview my profile