Recent posts

5 Significant Challenges Faced By Financial Services While Choosing SaaS Service

Nida Sahar

Introduction#

Technological modernization makes it easier to carry out various business operations within a second. One can manage different tasks by adopting leading computer software.

The financial services industry is one of the world's most heavily regulated and complex industries. As such, choosing a software as a service (SaaS) tool to help manage their operations can be a challenging task. This article will discuss some of the most significant challenges financial services companies face when choosing a SaaS tool and what they can do to overcome them.

SaaS tool for financial services

What is SaaS?#

SaaS stands for "Software as a Service." It is a model of delivering software applications over the web browser. Cloud providers host this software and associated data. Instead of installing and maintaining software on individual computers or servers, users access the software through a web browser. This allows them to access the software and their data from any device with an internet connection. According to businesses, 70% of the business software they use today is SaaS-based. They further say that by 2025, this will rise to 85%.

Some examples of popular SaaS applications include customer relationship management (CRM) software such as Salesforce, email platforms like Microsoft Office 365 and G Suite, and project management software like Asana. Many small businesses and startups also use cloud-based accounting software like QuickBooks, Xero, and Wave.

Challenges Faced by Financial Services#

Regular Compliance#

Compliance is one of the biggest challenges that financial services companies face when choosing a SaaS tool. Financial services companies must comply with a wide range of regulations, including data privacy, data security, and anti-money laundering. To ensure compliance, financial services companies must choose a SaaS tool that meets all regulatory requirements. This can be difficult, as many SaaS tools on the market are not specifically designed for the financial services industry and may not meet all of the necessary regulatory requirements.

Data Security#

Another significant challenge that financial services companies face when choosing a SaaS tool is data security. Financial services companies handle sensitive customer information, and it is essential to keep this information secure. In order to ensure data security, financial services companies must choose a SaaS tool with robust security features, such as encryption, multi-factor authentication, and regular security updates. However, finding a SaaS tool that meets these requirements can be difficult. Cloud computing for banking is challenging as many SaaS tools on the market do not have the necessary security features.

Integration#

A third major challenge that financial services companies face when choosing a SaaS tool is integration. Financial services companies often have a wide range of systems and applications in place, and it can be difficult to find a SaaS tool that integrates with all of them. In order to overcome this challenge, financial services companies must choose a SaaS tool that can integrate with their existing systems and applications or that can be customized to meet their specific needs. However, finding a SaaS tool that meets these requirements can be difficult, as many SaaS tools on the market are not designed to be easily integrated with other systems and applications.

Scalability and Flexibility Challenge#

Financial services companies may also face challenges in terms of the scalability and flexibility of the SaaS tool. As the financial services industry is a rapidly evolving field, it is crucial for the SaaS tool to evolve and adapt to the company's changing needs. This includes the ability to handle an increasing amount of data and transactions and integrate new technologies and features as they become available.

Lost Productivity#

Many financial organizations and banks are striving to join the cloud revolution. Cloud computing for banking is now easier than it has been ever before. The majority of firms, however, do not have the expertise or funding to utilize cloud technologies. Most banks are still considering moving their outdated monolithic systems to the cloud. Older systems-dependent businesses miss out on cloud apps' productivity advantages. As banks race to transition to the cloud, there may be hours or days of server downtime, which will damage both consumers and employees.

Dealing with Challenges#

In order to overcome these challenges, financial services companies must do their research and carefully evaluate the various SaaS tools on the market. Though Cloud computing for banking can be difficult, it can be improved by following below given steps:

  • Have a strong customer support team to respond to and address customer concerns quickly.
  • Continuously monitor and analyze customer feedback to identify patterns and common issues.
  • Implement a robust testing process to catch and fix bugs before they reach customers.
  • Have a disaster recovery plan to minimize downtime and data loss in case of unexpected outages.
  • Regularly update and improve your service to stay ahead of competitors and meet changing customer needs.
  • Have a clearly defined process for handling and addressing security concerns to protect customer data and minimize risk.
  • Develop a plan for scaling the infrastructure as the number of users increases.
  • Keep track of industry trends and updates in the software to stay ahead of the curve and anticipate potential problems.
  • Use analytics to measure the performance of the software and identify areas that need improvement.
  • Be transparent with your customers, keep them informed of any issues or planned maintenance, and involve them in resolving any issues they face.

Conclusion#

Choosing a SaaS tool for a financial services company can be challenging due to the industry's highly regulated and complex nature. However, by thoroughly researching and evaluating the various SaaS tools on the market and working with a vendor. They should look for SaaS tools that meet all of the necessary regulatory requirements, have robust security features, can be easily integrated with existing systems and applications, and are scalable and flexible enough to evolve with the company's changing needs. Additionally, they can also consider working with a vendor who specializes in providing software solutions to financial services companies, as they will better understand the industry's specific needs and requirements.