Banking and Insurance

Dassault Systèmes defines the banking and insurance segment as:

• All types of banks (commercial, retail, investment, custodian, credit unions and building societies)
• Credit card issuers, stock exchanges and payment providers
• Organizations involved in investment, wealth and real estate management
• Professional services such as accounting
• Insurance and reinsurance companies

The financial services industry faces five primary challenges that can impact each organization. These are:

• Increasing and diverse competition

Competition amplifies the pressure on firms, fostering a landscape of increased mergers, novel product developments and innovative services. Consequently, this environment has given rise to large and intricately-woven enterprises. These firms require strategic solutions to transcend conventional business silos. 

• Customer expectations and behavior

Seamless, personalized, secure and user-friendly digital transactions are becoming the new norm for every end customer. Financial services firms must prioritize the digital experience and understand what their customers’ behavior and feedback tell them about their products and services. 

• Operational, regulatory and reputational risks

Banks and insurers are exposed to many uncontrollable business risks spanning market fluctuations, changing interest rates, currency volatility and geopolitical uncertainties. Therefore, there’s zero tolerance for controllable risks such as operational, regulatory and reputational risks. 

Financial institutions require comprehensive solutions to minimize the error margin, whether for payments and customer onboarding or technology integration and merger and acquisition activities. They need solutions that ensure they’re meeting the regulatory requirements of all the jurisdictions in which they operate. Failing to comply with global regulations can cost a large firm hundreds of millions of dollars and damage its reputation. 

Furthermore, conventional spreadsheets, checklists and emails can create audit issues and leave critical gaps. There’s a clear need for automated solutions that guarantee regulatory compliance throughout the enterprise and across the entire lifecycle of a product.

• Resilience

Managing data redundancy and security are paramount to ensure uninterrupted operations for financial firms and regulators. Within the EU, the General Data Protection Regulation (GDPR) and the imperatives of cloud sovereignty underscore the rigorous obligations surrounding data privacy and storage. Financial institutions need comprehensive solutions that seamlessly ensure resilience, privacy and security across diverse landscapes.

• Efficiency and sustainability 

Automating and digitalizing processes enable financial firms to streamline costs, mitigate operational risks and elevate client experiences. Integrating automation and digitalization into workflows reduces risk exposure and facilitates more streamlined and transparent audit processes. Digitalization is vital to sustainability and the ESG factors it encompasses. This highlights the significance of digitalizing all business processes to ensure effective technology and data management across global organizations. 

The top two priorities are:

• Minimizing risk

Companies are already facing a significant amount of external risks and need to be compliant with regulations. Automation, AI and digitalization are crucial to reducing operational errors and minimizing regulatory and reputational risks.

• Increasing market share and competitiveness

Banks and insurers are focused on their competitive stance and public perception, spurring an imperative for continuous innovation and steering them toward achieving sustainability and ESG objectives. This drives the need to gauge customer sentiment and outperform market dynamics by creating sought-after products and services. These firms actively seek solutions to catalyze innovation, achieve sustainability goals and gain insights into authentic customer preferences.

Financial services companies are susceptible to operational and regulatory risks. Virtual twin technology can help to address these concerns. 

In the UK, new operational resilience regulations aim to protect financial services customers from threats and disruptions, requiring that crucial business services stay up and running no matter what. In Europe, the Digital Operational Resilience Act (DORA) is being approved, and other regulatory bodies around the globe have similar regulations either in force or in draft. 

By mapping and modeling their operations to create a virtual twin, financial services companies gain a complete overview of their critical business services and understand their intricacies, dependencies and vulnerability to interruptions. They can also run what-if scenarios, identify overlaps and address potential weaknesses to mitigate risks and get it right the first time. 

Virtual twin technology improves the energy efficiency of financial services infrastructure, including data centers and office buildings. Combined with AI and ML, virtual twins can monitor real-time events, reduce potential risks and ensure transparency — a synergy that cultivates customer trust and confidence.