Five Key Factors Driving Digital Transformation in Bankingby Aegis Soft Tech Prominent Mobile Application and Offshore Software
The banking industry is going through significant disruption driven by customer demand for new products and new ways of doing things. Combine this with the rising competition from banks and non-financial institutions.
Most banks today have embarked on digital transformation initiatives in their search for innovation shorter product development cycles and reduced costs.
Agile practices and flexibility in development are key to such digital transformation initiatives.
Let's explore five key factors driving transformation in Financial Institutions.
● Customer centricity - Today's customers are expecting better and more in every aspect of the business. They want seamless and coherent experiences across all channels, personalized services, and content to impact buying decisions and address their lifestyles, preferences, and goals. Customers also demand robust security of the data and business transparency, and most importantly, competitive pricing. Delivering the best customer-centric experiences starts with a focus on the customer rather than inward focus on what would work for the bank. Making processes paperless and seamless goes a long way in giving customers what they want convenience and speed of operations. Things like this simplify banking for millions of people and help them believe that banks put the customer at their core. According to BCG, personalization can boost sales by up to 40% in some retail banking areas and reduce customer churn by up to 10% and double or triple customer engagement scores.
● Space for innovation - Consumers expect their banks today to double down on their value proposition within one and a half years or less. It means that along with everyday operations banks need a smooth innovation delivery pipeline which based on Agile practices that track market trends, test innovative products, and then use a feedback mechanism to iterate products for continuous improvement. Such an on-demand innovation pipeline will reduce customer churn for banks and accelerate time to market enabling, banks to have a structured innovation process that generates ideas and improve processes.
● Do away with legacy systems - Leading digital technologies such as cloud big data and analytics can improve efficiency within firms, but they still depend on the data that resides on-premise in legacy systems. For a truly digital bank, there is a need to modernize these core systems using APIs DevOps and microservices for continuous integration and delivery and shorter release cycles.
● Leverage MVPs - A majority of financial services and fintech firms feel that they are good at generating ideas but not so much at developing MVPs. To avoid becoming obsolete and staying relevant to the digital market, banks can use microservices and API is to roll out MVPs rapidly.
● Upskill the workforce - According to the World Economic Forum’s 2018 Future of Jobs Report, 56% of the financial services workforce, will need new skills and 29% will be employed in new roles by 2022. Urgent need for banks and other Financial Institutions is to upskill their workforce and manage concerns around automation anxiety. Inducing entrepreneurial thinking in the workforce and investing in cross-functional teams can create a culture of learning and moving forward as the market does.
The ability to innovate adapt and respond to changing market Trends is no longer a choice but a necessity for successful digital transformations if banks are to meet the evolving needs of customers and fend off digitally sound competitors.
Challenges Down the Road for Banks and Financial Institutions
Research from the Boston Consulting Group shows that less than half of the financial institutions, 43 percent of people confess that there is no need to work with a digital strategy.
What’s stopping these banks and institutions? There are five reasons why banks struggle with going digital:
● Legacy systems that are too integrated with all processes and across the enterprise so that changing or replacing them seems daunting.
● Financial institutions are more often averse to the risk of selecting IT vendors.
● Banks lack the will and agility to adapt and install far-reaching changes in their culture- a pre-requisite for digital transformation.
● Financial institutions often fail to encourage entrepreneurial spirit within their organization and stint innovative progress.
● Banks often fail to dig into the multitudes of data they have at their disposal and never leverage insights from it to tailor products and services toward customer liking.
Accelerating Digital Transformation for Banks
According to drive holistic customer engagement in banks, five channels need to be acted in: acceptance, consideration, Java web development, onboarding, and servicing. Beyond increasing and enhancing digital service initiatives, banks need to aim at a fuller transformation to digital processes.
Since leading tech brands such as Amazon, Google, and Apple have become the golden standards of measuring and delivering digital engagement, many customers today have a deeper connection with these brands than their primary banks.
Since customers no longer differentiate companies in setting expectations, banking institutions need to engineer and adapt the digital experience they offer to suit the needs of the digital population.
It would create sticky experiences and customers that profit and drive revenue to banks. Banks around the world are fast realizing how investing in digital technologies can be their game-changing strategy to acquire and retain customers.
Not only customers but banks also need to manage the day-to-day frustrations of employees who deal with repetitive, tedious tasks and feel undervalued and underutilized at their jobs. Automation and effective delegation can be the means of reducing employee burnout and ensuring the workforce functions at its optimal best in delivering better customer service.
Created on Jul 4th 2019 02:32. Viewed 953 times.