Digital Transformation in Banking & Finance
Digital Transformation in Banking & Finance
Digital transformation is a term coined by Gartner, a technology research firm, to describe how digital technologies are changing business models, processes, and ways of working. It’s not just about adopting new technologies, it’s about rethinking the way we work.
What Is Digital Transformation In Banking And Finance?
Digital transformation in banking is a change in operations and culture toward integrating digital technology in all banking sectors, Optimizing operations, and creating value for customers.
It’s not just about using the latest software and equipment, but also about adopting a revised approach to Work culture, Communications, and Management practices.
It leverages high-level process automation, web services, and APIs to provide banks and their customers with a high level of Cost-effectiveness, security, and flexibility. Banking and financial products are becoming commoditized, and the customer experience has evolved as a real differentiator rather than a function as previously thought.
Several studies indicate that banks & NBFCs want to differentiate themselves on the basis of customer experience with online, social, and mobile channel initiatives to get an edge over their competitors by improving customer experience. The core of the strategy revolves around engaging customers conveniently and that too through their preferred channels.
Key factors driving digital transformation can be divided into two categories:
1) Consumers (Digital Customers)
2) Modernized infrastructure (Technology + Devices digital)
What are the benefits of digital transformation in the banking and finance sector?
1) Save the Turnaround Time (TAT) for every business process
2) Improve access to banking services
3) Improve security
4) Security is a big concern when it comes to money. Banks are implementing advanced security solutions to ensure increased security even when accessing banking services from your home or office over the Internet.
5) Simplify account tracking
6) Hassle-free payments through multiple channels options
7) Great customer relationships due to enhanced customer experience
8) Data and process integration.
Real Impact of Digital Transformation in Banks & NBFCs:
Not to mention how covid-19 has changed the scenario, With the imposition of lockdown and due to health concerns, people have embraced online banking and now prefer to have all banking at their fingertips.
After analyzing various aspects of digital transformation, it can be stated that there are several ways in which it has impacted the financial sector, especially the banking sector with strong positivity.
Digital Transformation Has Helped To Resolve Many Business Problems Such As:
1) Reduce fragmentation in decision-making by analyzing market data based on public needs.
2) Communicate with your customers proactively and often by contacting them online and staying in touch at all times via chatbots.
3) Reduce report submission time through automation to create and send digital reports instantly.
4) Help develop clear goals and objectives by using tools for better evaluation of data for each department.
Digital transformation has succeeded in changing the perception of banking. Customers can now benefit from the bank’s services with just a few clicks on the screen.
Banking has become more interesting and rewarding with third-party applications that can connect directly with banks to securely transfer payments from one source to another without any hassle or trouble.
Conclusion:
The long-awaited banking revolution has finally evolved. Banks around the world are rapidly adopting digitalization to improve customer experience and operational processes and transform business models to support and grow their businesses.
Over 90% of the population in India has already registered with Aadhaar Card. Post demonetization followed by the Pandemic, the Aadhaar-enabled payment systems, Wallets, and Online Payments have helped customers to do online shopping from the comfort of their homes.
With a Fintech adoption rate of over 85%, bigger opportunities are knocking on the doors for FinTech’s. The improved customer experience due to the digital transformation in the banks has helped them in taking the right steps forward.
Digitization is happening at all levels of the bank, from the operations/back office floor to the customer touchpoints to facilitate overall improvement and ensure added value for customers.
A robust quality assurance framework that considers all quality and security risks, enabled by robust tools, methods, and the right BPM platform, is imperative for the success of the digitization initiative.
-Ayush Jain
Servosys Solutions
