Digital banking has taken the finance sector by storm and continuously influences the banking industry.
As the preferences and interests of tech-savvy customers keep on changing, we witness the rise of digital transformation in banking. It offers faster and multiple service options and provides customers with omnichannel experiences. In other words, digital transformation ensures swift and seamless banking services on any device.
What is Digital Transformation in Banking?
Banks of all sizes can leverage the benefits of evolving technology in streamlining their processes and improving customer experiences. Digital transformation in banking can cause a paradigm shift from legacy processes to digital operations using new technologies. As an ongoing process, digital transformation involves numerous changes in the backend to support online services.
It is fair to mention that digital transformation is about something other than implementing a series of digital initiatives. These initiatives may not get success in achieving the desired goals because they lack digital-native solutions. Digital transformation in banking, on the other hand, takes a top-down approach and integrates digital systems along with advanced infrastructure and various platforms to improve customer services and streamline operations.
How Digital Transformation can Improve the Customer’s Journey
Globally, most banks have dedicated apps with the necessary features. Customers consider these features as digital services but, when it comes to offering exclusive banking services on the app, banks need digital transformation. Bank digitization can assist customers to digitize their journey by involving all the departments of banking. One such example is online loans. Thanks to advanced technology, customers can see the approved credit limit and get the loan amount directly in their account simply by using the app of banks or financial institutions.
In a way, digital transformation can provide customers with a personalized experience by keeping all the departments of banks on the same page. A more cohesive digital journey of the customers is possible by integrating all the operations on a single platform online. What’s more, banks can merge different departments to gain benefits by saving a lot of time and effort. For instance, banks can merge marketing and retail into the same team to get desired outcomes.
As per the Forrester report, 77% of Canadian customers, 69% of Spanish customers, and 71% of American customers use online banking services at least once a month. In such a scenario, banks and financial institutions should attempt to understand the customer’s needs and expectations. Digital transformation makes it possible while making the customer’s journey smoother with online activities. In a way, digital transformation can save money and effort for the thriving banking sector. Banks can free up their staff for other value-added processes like building relationships with customers through the automation of various repetitive tasks.
Digital Transformation in Banking- Top Trends that Bring Changes
Emerging technologies like AI, IoT, and Blockchain are gaining ground swiftly across various sectors, and the BFSI sector is no exception! Customer expectations and competitiveness also change with the advent of technological advancements. Let’s go through some of the most important trends of digital transformation in banking that are set to bring changes in the processes over the period.
Rise of Online Payment Methods
We have seen an unprecedented change in payment methods in recent years. Card-based payments and online payment gateways have started replacing cash-based payments. Time and again, financial institutions keep on bringing new online payment apps in collaboration with public and private banks. Several mobile applications like PayPal have made international transactions possible in a swift and secure way. We can certainly expect that more online or digital payment methods will come thanks to technological advancements in coming years
The banking industry witnesses a rapid change and banks of all sizes need some kind of collaboration and improved coordination between one another. Increased cooperation brings many advantages including enhanced branding, more expansion, a loyal customer base, and new areas of services. Thanks to the fintech concept, banks can collaborate with other financial institutions to come up with innovative products for customers. It can boost the productivity and profitability of banks.
Isn’t it interesting to know that banks also face competition these days? Increasing competition and growing challenges are some of the key reasons why we see more adaption of digital transformation in banking. Banks tend to create new marketing strategies based on improved data collection and analysis capabilities. Banks are interested in not only grabbing new opportunities but also increasing the effectiveness of customer channels to retain existing customers for a longer term.
Improved Data Usage
Mobile has become a new norm globally. People were compelled to use online banking and other facilities during the pandemic. However, this trend is here to stay as the post-pandemic period witnesses a steady rise in it. As per the Insider Intelligence survey, 89% of customers use mobile devices for accomplishing banking activities. In such a mobile-driven age, it is imperative to secure confidential data while ensuring its real-time access in a targeted manner.
RPA (Robotic Process Automation), big data, cloud computing, and Blockchain are highly promising technologies for transforming banking processes. All these trends will drive banks toward growth in the coming years.
Negative interest rates, changing customer behavior, increasing competition, and regulatory challenges are some of the key reasons why banks need to bank on digital transformation. Banking processes get streamlined to give better customer experiences by accelerating the pace of digital transformation. In a way, digital transformation is ready to become a catalyst for growth and success in the banking sector.
Vipul Makwana is a Digital Marketing Strategist at Silver Touch, a leading digital transformation consulting company that provides end-to-end AI/ML, Blockchain, Big Data, and Analytics solutions. He’s keen on reading about new technology and marketing. Silver Touch specialize in implementation of Digital Transformation for Enterprise customers. We provide services on Artificial Intelligence, Machine Learning, Big Data & Analytics, Robotic Process Automation (RPA). We specialize in building large Enterprise application on Mean stack, Microsoft, Open Source and Cloud Technologies like Azure, AWS. We help software product and SaaS companies to build, upgrade and support the Applications. Legacy application migration to cloud is one of our specialization.
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