Oct 05, 2022

Digital Evolution of Banking – Benefits of the Change

  • By DEIRDRE MATHIS,
  • 152 Views

Making the giant leap toward digital transformation is not easy, especially in the banking sector. While 30% of processes are already digitized, the lag between planning and execution still exists.

Banks of all sizes integrate digital tools to make the work more efficient. The digital tools have become more robust in terms of encryption to make way for online services hassle-free.

What is Digital Transformation in Banking Sector?

The process of digital transformation in banking requires the collaboration of efficient tools with the existing system to improve customer experience. Offering digital services in different forms and keeping up with the trend merges customer acquisition costs with digitization.

Four factors play a crucial role in the bank’s digital transformation.

  • Process: Changing the workflow and removing the hurdles of manual operation from the system.
  • Data: Managing data to make insight-driven changes that improve the customer experience and overall system.
  • Technology: Leveraging the technology stack of the bank and adopting tools for rebuilding the operations department.
  • Organization: The internal communication, navigation, and workflow gets channelized by adopting practical digital tools.

Digital transformation in banking is all about financial organizations trying to deliver value-driven services to their customers.

Eradicating the loopholes, removing the manual errors from the system, making the process faster, and ensuring data privacy are just a few points to consider. Below are some changes that the banking sector is planning to adopt for digital transformation.

  • Better web-based experience for customers by boosting website speed and improving navigation
  • Faster email responses and notifications for maintaining transparency and giving timely updates
  • Awareness programs on how to identify and avoid fraud from the system
  • Better KYC approval by making the process transparent, easy, and accessible for all customers
  • Proactive virtual assistants that help the customers when they are facing issues at any point in time

Digital tools and platforms have entirely changed the processes in several sectors. Now, it is reshaping the banking and finance sector as well. To integrate everything smoothly, banks must adopt digital platforms and tools.

The following section highlights the improvement a digital transformation in banking.

Improvements Expected after Digital Transformation

COVID-19 has dictated the processes in many sectors and customers know what to look for in an organization now.

It requires shifting from traditional methods and leaving behind the tedious protocols to execute a task. It will not only make the tasks easier but also faster. Banking is one of the major sectors that will witness a lot of change in the future, and it is vital to start thriving at this point.

Here are a few pointers explaining why the digital transformation is necessary to improve our banking facilities.

  • The convenience of doing things with minimal effort and maximum safety during uncertain times like COVID-19.
  • Private banks are entering the market with cutting-edge technology and giving competition to traditional practices.
  • The experience for the customer will be more engaging than before, which will make the process more trustworthy.
  • With fast-paced work culture and lifestyle, the expectations from banking will also reach sky high.

The following section discusses the significant benefits that one can get when banks and financing companies go digital.

Significant Benefits of Going Digital in the Banking Sector

The main motive behind going digital is making the customer the center of all the processes. Keeping every process engaging and easy is the first step toward making the service customer-centric.

Below are some merits of how digital transformation will improve the banking experience for customers.

Trust Building

In this age of social media, anything less interactive than a social platform doesn’t seem impressive. Customers are looking for an interactive experience before anything else, and it is also the main point in building a customer acquisition strategy.

The way banks are positioning themselves in the market, running ads, pitching new products, and launching new schemes is essential. Digital experience can be enhanced significantly by effective brand positioning.

Customer Acquisition Strategy

As mentioned, digitization merges the customer acquisition cost with that of digitization. Would you choose a reputed bank with no online facilities or a new bank with efficient online support and services?

The answer is quite apparent! Customers look for online facilities, and it has a significant role in attracting them to a bank. The more convenient it is for them to carry out transactions and get their queries solved, the easier it will be for the bank to convert them.

Customized Solutions

One-size-fits-all is so not working during digital transformation. Each customer wants to understand how they are valuable to the organization. It is vital to offer a solution that works for the customer specifically.

With the help of AI-driven tools, one can easily integrate personalized offerings and elevate the experience. This will ultimately enhance the engagement experience of the customer with banks.

Scope of Innovation

Integration with digital tools accumulates the data of user experience and engagements in a safe place. This makes it easier for the organization’s data management team to understand the trend and take necessary steps.

Hence, it creates scope for adopting innovative tools and technologies in the company to make the work more efficient. This will help the organization develop products that cater to the demands of new-age customers and clients.

Final Words

Embracing the digital format and bidding farewell to the traditional system will be a bit challenging, but it is about the survival of the fittest. Millennials and GenZ are more likely to scroll through their social media than run errands for banks.

Incorporating the right content strategy with attractive insight-driven product development will lead to an efficient digital transition. It is the customer experience that counts and makes the difference.

Also Read: Impact of technology in financial industry

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