The rise of technology has led to a profound change in the traditional banking sector, transforming the way it operates and interacts with customers. The digital transformation in banking has been a major shift from paper-based processes to digital ones. It encompasses all aspects of banking operations, from customer service to product offerings, processes, customer experience, data integration, and sales structure.
As technology continues to shape the direction of the banking industry, banks must adapt and develop strategies that incorporate these technological advancements. The current global pandemic and economic crisis have only accelerated the need for digital transformation in banking. According to a recent study, 69% of boards of directors are accelerating their digital initiatives in response to the pandemic and economic crisis.
Big banks are starting to take advantage of the benefits of technology adoption, especially as fintech startups with a focus on technology enter the market. The key to success in the future of banking lies in the effective use of technology. Banks must embrace technology at all levels of their organization, both internally and externally, to transform their products, attract customers, empower employees, and optimize operations.
Digital transformation of the banking industry is inevitable and necessary. Banks must adapt to the technological advancements in the industry and incorporate them into their strategies to remain competitive and meet the evolving needs of customers. The future of banking will be shaped by technology, and those who embrace it will be the ones who succeed in the years to come.
Even though banks were equipped with technologies and gradually embracing Digital Transformation in Banking, the pandemic revealed the urgency to transform digitally by exposing how the current BAU model is inefficient and incomplete to acquire, manage, and retain customers.
Majority of the banking processes can be done online, employee productivity will increase, TAT will reduce, and customer service should improve. New age technologies have been successful in accelerating Digital Transformation in Banking.
While we talk about Digital Transformation and its future scope in the US banking industry, we often see the US Mid-Sized banks struggling about it. Let’s understand why?
Digitalizing a business that offers traditional Banking and Finance Services (BFS) can be challenging but scaling those digital initiatives is a much more tangled process. Even today, the discussion around ‘Digital Transformation in Banking and Finance sector’ is never complete without someone mentioning the undeniable security risks. Hence, introducing digitalization to a business operation or service requires a strategy that goes beyond implementation and includes the scaling possibilities too.
Although Banking seems to go through a phase of unprecedented innovation, for most of the institutions, Online Banking is still the most widely used (sometimes the only) Digital touch point. Digital disruption is attacking the traditional banking’s operational inefficiencies. New entrants like digital-born Fintech start-ups are making it more difficult for old-fashioned bankers to survive. Most players are already on a mission to rapidly alter the business models and find a more competitive landscape to spread globally.