IBM's Institute of Business Value conducted a survey and found that 60% of the world's bankers felt that the boundaries between different industries are becoming increasingly blurred. This means that banks will face new competition from other financial institutions. FinTech startups and ecosystems, which bring together financial and non-financial entities, are both presents.
Those who want to improve their market position must undergo digital front office transformation in banking under these circumstances.
What is Digital Banking Transformation?
It's not just about employing the latest technology and software in the banking industry; it's also about rethinking management strategies as well as how employees interact with one another and the company's culture.
Because of the rapid advancement of information and communication technology, we now live in a digital age. The financial technology (FinTech) business got its start in 2008, making an impact on the economy as one of the first sectors to do so. New strategies to lower costs while maintaining high-quality services were required as a result of the economic crisis.
What does digitization mean for banks?
In order to implement a customer-centric strategy, a company must first rethink the customer experience. Automation and personalization are important to secure customer retention, contentment and the long-term viability of a business.
Components of digital banking transformation services
The term “digital transformation” refers to a shift from traditional means of working to newer, more technologically advanced approaches.
There are three categories of digital transformation components:
Relationships with customers
As the most obvious outcome of the transition, the customer experience will improve. As a result of the introduction of digital technology, not only are external communications streamlined but also analytics, marketing, and sales reach new levels.
For example, this helps the company to know exactly what is going on with their customers at any given time, and to engage them at the correct time. For an effective marketing strategy and price adjustments, a greater understanding of the audience is essential. The end result of all of this is a qualitative and quantitative improvement in customer connections.
As the company's architecture changes, new processes will likely arise. For example, emailing data isn't a novel process, but rather a more modern manner of accomplishing the same duties that have been done for decades. The adoption of an EDI system for the exchange of digital information is also a significant development.
A host of advantages accrue to the bank, including higher productivity and the elimination of paperwork, as a result of this move. As a result of the digitalization of workflow, we've seen a shift in the way data is exchanged.
Because of digitalisation, people become more alert. Allows for a more efficient allocation of resources and delegating of responsibilities, which saves time and money.
As a result of the emergence of networking and knowledge-sharing tools, a company's workflow can be virtualized, making it easier to shift to working from home.
When customer interactions and internal procedures are restructured, it can have a profound effect on an organization's life and its market position.
Leadership's political aspirations
BCG's analysis found that digital transformation fails in 70% of the cases it investigates. However, why does this happen, and more importantly, what can a company do to succeed?
Management's aversion to change is one of the primary causes of the failure. With this, we get at the final element, which is political will on the part of those in power.
If the company's leadership team is willing to change their management style and processes, as well as the customer experience, innovation will have a positive impact. The team will have a better chance of achieving digital transformation success if it has a better understanding of its own needs.