Digital transformation is the buzzword today with businesses increasingly utilizing document scanning services and other convenient solutions to ease the transition. Today, customers benefit from advanced digital technologies that have brought about an unprecedented level of access, automation and convenience. In the financial sector, majority of the banks are becoming digital to provide a new customer experience on the outside and an efficient and effective operating model inside the organization. It helps them meet their customer service requirements immediately and in a better way, and provide high quality interactions, quicker transactions and superior customer experience. However, all banks/financial institutions have not yet transformed to a complete digital system. By implementing the following effective strategies, financial institutions can stay competitive in the increasingly diverse marketplace.
Some Important Strategies to Adopt
- Strive to meet rising customer expectations: Today customers are spoilt for choices with various options and flexibility in operation. The demands of consumers are also rising rapidly every year – they want to interact with their financial service providers whenever they need to, and attain consistent quality service all the time. So, the financial sector should now focus on making the journey towards omni-channel systems and platform architecture. Similarly, they should also consider the cultural change required within the organization. Along with evolving technology, the attitude and mindsets of people within the organization must also evolve.
- Digitize the enterprise completely: Digitization offers big advantages for banks, potential cost savings, productivity improvements and other efficiency gains. Digitization is important to meet customer expectations and also to provide convenience and accessibility. Digital migration can be challenging but enables interoperability, collaboration between every team and department, omnichannel engagement and service delivery.
- Open banking and PSD2: The latest trends in the financial sector include the phenomenon of open banking and regulatory forms like PSD2 (Payment Services Directive 2). This is a major change in terms of network of providers, business models, price points and available services in the market places, and more generally about how businesses compete and work in partnership with each other. This new trend will provide more opportunities for service providers from emerging fintechs to the biggest banks to bring in innovations and challenge time-honoured notions that have defined the industry. Investing in the right technologies and solutions would enable financial entities to respond quickly to market opportunities and deliver value to the customers.
New innovations in financial services such as omnichannel service, open banking and digitization help banks to seize opportunities. Trends like these are suggestive of the rapidly developing market place and by leveraging these, businesses will be able to respond to new challenges and opportunities.
Trends to Expect in 2018
According to EY Global Banking Outlook 2018, in New York 85 percent of banks see implementation of digital transformation program as business priority for 2018. Investing in advanced technology helps to drive efficiency, manage evolving risks and also benefit from growth opportunities for sustainable success. Cyber security will also be a top priority for leading global banks in 2018.
A survey of senior executives at 221 institutions across Europe, North America, emerging markets and Asia-Pacific shows that banks are becoming digitally mature and completing the process of transition from regulatory-driven transformation to innovation-led change to protect themselves from future downturns. Other highlights of the survey are:
- 59 percent of banks surveyed anticipate that their technology investments budget will rise by more than 10 percent in 2018.
- 70 percent of banks cite strengthening their competitive positioning as a key reason for investing in technology by 2020.
- 44 percent banks that are beginning to invest in new technologies plan to purchase the technology from a third party, and 17 percent plan to acquire an entity to onboard the technology.
- Improving cyber and data security is the number one priority for banks and 73 percent of banks plan to invest in technology to minimize cyber security threats.
Becoming a digital bank is important in the present digital scenario. With massive data availability, new digital technologies, expanding competitive landscape and consumer expectations that are increasing exponentially, it is clear that no organization can sit back and relax. On the path of digitization and innovation, data entry companies may prove to be highly supportive to banks and other financial institutions.