ThE Relevance of Quality Assurance in the Financial Sector
The Global Quality Assurance Association (GQAA) in its quest to assist all sectors (extraction, manufacturing and service), to avoid certain quality pitfalls, is embarking in education, awareness and capacity building of all segments in all sectors, including government ministries and departments. This is because quality assurance principles are universal and applicable to all entities with highly beneficial results once they are done properly.
The financial sector is a segment of the economy made up of firms and institutions that provide financial services to commercial and retail customers (Kenton, 2021). The same author listed banks, investment companies, insurance companies, and real estate firms as part of the broad range of industries that make up this sector. Businesses, corporations, banks, and other institutions that offer financial services and sustain any economy form part of this sector. Most if not all stable and developed economies depend on thriving financial sectors which are made up of brokers, financial institutions, and money markets.
The state and performance of any economy heavily depends on the financial sector. Therefore, a weak financial sector is a sign of a poor economy while the opposite is true. A strong financial sector is a sign of a healthy economy. It is the financial sector which advances loans and financial support for businesses so that they can expand, mortgages and insurance policies to protect people, companies, and their assets, among other things. It also helps to build up savings for retirement and employs millions of people. This is the reason why issues of interest rates, mortgages and loans, debt financing, and capital funds are important and should be quality assured together with the rest of the finance sector branches. They have a significant impact on any economy individually or combined because a substantial amount of revenue, for any country, is generated from the above-mentioned sources.
Therefore, financial quality assurance is necessary to push the performance, quality of products to higher levels, meeting and/or surpassing customer expectations through a well-planned series of quality assurance (QA) initiatives which must be properly executed for best results to be realized. Quality assurance should be embedded in all operations, processes, procedures, components and all aspects of the sector. This literally means that inputs, outputs and processes should be fully quality assured as well to avoid losses, identify gaps quickly and plug them before any further damage occurs.
A robust quality assurance (QA) ecosystem and quality management system are very essential for businesses to keep pace with the market through, for example, the adoption of technology which enables faster business transactions for better customer experience. Using the same example, financial quality assurance should, in today’s context, provide cutting-edge user experience in terms of financial systems integration, navigation, and responsiveness that ensure secure storage and access of clients’ finances and personal details. Therefore, both the user experience and cyber-security need to be constantly monitored, assessed, evaluated and improved regularly, for example in the banking sector to avoid some of the most damaging and disastrous reputations and legal suits which obviously drain the gains. Tools, well trained personnel, systems, policies, standards and procedures, among others. The only way to succeed in the current context of a new generation of banks is to succeed in quality assuring everything in the finance sector as earlier on spelt out.
Quality assurance in the insurance sector requires a revolutionary structure. Therefore, innovation and creativity in QA should be top priorities for the transformation of this industry, post the COVID-19 pandemic and the coming up of the 4th Industrial Revolution which is technology driven. To succeed in the competitive environment, insurers need to urgently meet and/or surpass the highest quality standards. This is because quality in the insurance industry has fast become an essential requirement as opposed to being optional. Robust quality management systems have become more important in this progressing sector which is getting more modernized in this digital environment. These standards could be for environmental, social and governance, policies and framework used to assess an organization’s business practices & performance on various sustainability and ethical issues & also provides a way to measure business risks and opportunities.
Quality assurance can help the insurer, for example, not only to sell policies but also to engage customers with foresight for value addition in the business. Insurers should adopt the new technologies with matching quality assurance processes, procedures, personnel and tools as per the requirements of their business objectives. Products like software and applications, for example, should be well tested, understood and examined including the added advantages like free service, simple and easy navigation for both customers and employees with appropriate integrated accessories that are highly responsive to customer needs. Digitalization of the insurance business is imperative to bring in more predictability and responsiveness for a seamless customer interface and quick and automated Data Analytics can be handy in ensuring a better customer experience. Overall, all aspects of the insurance sector have to be quality assured in order to watch out for the devastating effects of Cyber risks, competition, economic instability, climate change, mismanagement, property damage, manufacturing issues, losses through leakages, omissions and wastages, among other things.
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(1) Financial Sector – Meaning, Examples, Roles, How it Works? – WallStreetMojo. https://www.wallstreetmojo.com/financial-sector/.
(2) Financial Sector: Definition, Examples, Importance to Economy. https://www.investopedia.com/terms/f/financial_sector.asp.
(3) Financial Sector – Overview, Types of Financial Institutions. https://corporatefinanceinstitute.com/resources/wealth-management/financial-sector/.
