Banking and financial services is regarded as one of the most mature industries for technology adoption. While banks have had experience in running complex technological stacks for years, many are now transitioning from developing in-house products to adopting cloud-based products and SaaS models as part of their business strategy. However, going digital can also open doors to uncertainties. While it is imperative to identify the right path for a digital transformation strategy to be effective, one also needs to be cognizant of being proactive to changes and the challenges that it brings. Banks need to relook at their legacy application landscape while digitizing their front operations, business processes, trade, customer experience, etc.
Technologies adopted by BFSI players:
Improvement through digital transformation:
Why is Digital Transformation important for banks and NBFS?
Customers expect their banks to be present anytime, anywhere. A Deloitte survey including 17000+ banking consumers revealed that: 22% of consumers are using online and mobile app channels 10+ times per month to handle their banking needs. Since digital is the most frequently used channel by consumers, financial institutions should invest more in digital.
Banks and financial institutions are aware of their whereabouts in digital transformation.
Although banks and NBFCs consider digital transformation a top priority, they still believe they have a long way to go to maximize their digital strategies and capabilities. A survey conducted by BCG revealed that:
- 86% of respondents stated digital is the right strategy to invest in to gain a competitive edge
- 43% of respondents believe their organization’s digital capabilities are far from market leaders
- 86% of respondents reported that technology infrastructure is complicated and may prevent digital interactions with consumers
How can Banks and NBFCs build an effective digital transformation strategy?
Change is certainly painful, especially when it comes to capital and effort-intensive undertakings like digital transformation in banking and financial services. Financial leaders can gain the edge and design a failsafe digital transformation strategy by focusing on employee needs, processes and tools.
- Stay fully committed to the digital change
The key to a successful digital transformation lies in the ability to stay fully committed to it throughout the time it takes to usher in the change. It should be a clearly articulated strategic priority, supported by sufficient funding, talent recruitment, openness to new agile working methods and a willingness to take risks.
Articulating the digital transformation vision to internal and external stakeholders can certainly help financial leaders motivate their customers and employees, get their support in adopting the change and inspire a sense of purpose. However, it is also important for banks and NBFS to sit back and listen to their employees’ concerns or challenges in the process. Hence, it is important to take a 360-degree approach while planning and executing digital transformation and design a back plan.
- Establish a Change Management System/Program
Employees are the biggest asset of any organization. Therefore, while digital transformation is in process, banks should help their employees and customers to get a firm grip with new processes, tools and infrastructures. It’s hard to guide everyone at once. Hence, deliberate recruitment in various departments should be undertaken to volunteer, lead digital changes and bring the best practices with them. Investing in training programs and videos should be done to keep the educational flow running throughout the process. Nurturing employees’ growth can hugely support digital transformation.
- Enable digital collaboration
Establishing a collaborative digital workplace creates a strong foundation for a digital transformation in banking and financial services. Emerging technologies are rapidly reshaping the financial services workforce, and many firms now find that they can replace entire processes with fully digital processes and tools. That’s why it is immensely important to invest in knowledge sharing tools to enable company-wide collaboration and knowledge management.
Making information searchable, readily available and manageable enable employees to avoid working in silos and deliver top-notched banking and financial services and a seamless, immersive customer experience. Ensure that your company’s databases, tools and applications are interoperable to optimize data analytics efforts and operating patterns while quickly developing new cloud-based services. It is highly recommended that you prioritize:
- Updating your IT operating model
- Simplifying legacy systems
- Taking software beyond the cloud
- Adopting robotics/artificial intelligence
How can banks and finance leaders adopt emerging technologies to bring digital transformation?
As stated earlier, banks should take cautious steps while kickstarting or stepping up their digital transformation. They can have a comprehensive or advanced approach towards it. However, to ensure that approach, they will need a digital transformation partner/specialist.
Decimal Technologies offers customized digital solutions to BFSI and NBFS enterprises to elevate the digital transformation initiatives undertaken by them. We have a proven track record of supporting enterprise-grade digital transformation through our full-stack end-to-end digital solutions aligned completely to the needs and requirements of banking and financial services.
To know more about how we can help support your digital transformation strategy, please write to us at firstname.lastname@example.org or visit us at www.decimaltech.com