Digital transformation in banking has banks of all sizes scrambling to embrace new technologies and services across the board. In any case, what does digital transformation in banking actually mean? Digital transformation in banking largely involves the shift to offering online and digital services, as well as the enormous number of backend changes required to support this transformation.
Many banks commit mistakes by taking on a series of different digital initiatives, which struggle to succeed because they don’t have the support or coordination to compete with digital-native solutions. Rather, digital transformation in banks must involve a top-down approach, integrating digital systems, customer experience platforms, applications, and infrastructure.
Examples of Digital Transformation in Banking:
· Blockchain Technology
· Utilizing Artificial Intelligence (AI)
· Customer Data Collection, Management & Analysis
While digital transformation in banking can and implies many things, the couple of tenets will get you on the right track to strategizing digital transformation journey of your bank.
Digital Transformation Enhances Customer Journey
All banks have a website, most have almost the same form of a digital application, and likely online services and features to go with it. These digital features envelop majority of what people consider as “digital services” but don’t at all encompass digital transformation in banking. However, they do allow you to take a significant step towards the digital transformation of a bank, which is digitizing the customer journey. How? And what does it involve?
Traditional customer journey or sales pipeline often begin with marketing building leads, transferring those leads to sales, and then transferring those sales over to customer service. An individual must go through several departments before they ever receive a product or service, resulting in disjointed and disconnected or often impersonal outcomes.
Digital transformation in banking permits you to make a more cohesive and personal digital customer journey. Developing a digital customer journey means taking steps to integrate everything into a single online platform so that the customer is handled through the same tooling, sometimes by the same individual, and with the same information throughout the process. Here, practices like changing how teams are organized, integrating technical individuals into sales teams, and potentially merging marketing and retail into the same team can help a great deal.
This form of digital transformation in banking means understanding customer wants and needs and investing in those wants and needs.
Digitalization and Big Data in Banking
Modern banks have more data than ever before. The more digital services you offer, the more data you automatically gather. This data permits you to take huge steps in terms of updating and managing your operational model, your customer service, and even your business strategy. Data allows you to understand customers in new manners, utilizing that information to recognize opportunities, optimize products and services, and automate solutions.
Data mining and big data in banking play into every part of the institution, but sales and marketing are among the most departments that benefit the most from the data provided by the digital transformation strategy of a bank. Here, big data allows you to use customer information to build targeted marketing campaigns. This same data usage works with reducing churn by creating offers and solutions to prevent customers from leaving. Analytics can predict when customers need loans when loans default when customers are planning to leave, or even when a cross or up-sell will likely be useful. This data allows banks to offer highly personalized solutions, either through a representative or as an automated offer or solution inside an app or online platform.
Automating and utilizing digitally-driven solutions such as chatbots and AI are also part of bank digital transformation strategy.
All things considered, the digital transformation of the banking field will bring extraordinary innovations that will change the image of banks we presently know. Technologies bring various opportunities both for banks and their customers by securing personal data, increasing transparency, and giving a chance to manage funds anytime and anywhere.