4 Keys to Digital Transformation in the Financial Sector
The Transformation of Digital in the banking sector went from being an option to a necessity. The financial sector has opened up to new services, products, and new types of providers such as emerging companies known as fintech and, more recently, large technology companies.
Therefore, it is time for banks to start betting on transforming their business model that is focused one hundred per cent on meeting customers’ needs, which is committed to strengthening its digital channels.
Benefits of Digital Transformation in the financial sector
Financial leaders seek to implement mechanisms that drive Digital Transformation, maintain companies’ competitiveness, improve the offer of products and services, and satisfy consumers’ demands.
In this way, the adoption of technology within organizations will facilitate collaboration and teamwork and can also provide:
- Better team alignment, which means faster and more accurate customer service.
- Automation processes and workflows, freeing employees from more complex jobs and leading them to seek more significant innovation.
- Faster incident escalation and resolution.
- Greater organizational transparency.
Digital Transformation’s path will be different for each financial institution, and they will have to take on other challenges in their process. Still, specific points must be taken into account to guarantee a successful Digital Transformation:
Keys to banking Digital Transformation
Data and banking Digital Transformation
Today, banks have as much data as possible at their disposal. Also, the more digital services it offers, the greater the amount of data it collects.
This data will allow you to continue advancing in terms of updating and delivering value for your users and in your administrative and operational model, customer service, and your business model.
Big Data will allow banks to identify business opportunities, optimize products, automation solutions, and understand their customers in new and different ways.
Also, the analysis of the information collected brings excellent benefits for the marketing and sales areas of financial entities, since the knowledge of the user allows the application of personalized campaigns and reduce turnover or prevent customers from leaving; or even being able to predict when a customer needs a loan or when a cross-sell would be helpful.
The banking Digital Transformation changes the Customer Journey.
By digitizing the sector, all banks have a website, mobile application, and online media to support it. This makes the customer journey more personal. For this reason, banks must take measures that integrate each of their channels and that provide the same information throughout the process.
Most importantly, customers move seamlessly from marketing to sales, billing, and customer service seamlessly. For this, the Customer Journey Map must be established to create the financial tools, applications, and products that you need to accompany you on the journey.
Adaptation to change
Within the processes of financial Digital Transformation, one of the essential aspects is adapting to change. In the world of technology, everything is moving very fast, and developments are continually emerging that make it possible for entities to respond in an agile way to the sector’s needs.
Sometimes, traditional banks are limited by security policies, data protection, or the bureaucracy of the entities’ processes. Therefore, financial institutions must adapt their approaches to meet the demands of the market and their clients.
For this, the Digital Transformation of banks must start from the inside out, focusing not only on external services but also on carrying out an adequate internal transformation process, from the digital, the technology, and the cultural and the acquisition of digital talent.
Those in charge of financial companies’ technology areas must be aware of the advances in topics such as Artificial Intelligence, Open Banking, Digital Authentication, microservices, Blockchain, and RPA.
But it is also essential that you know the implementation of agile methodologies as a valuable work tool for the continuous delivery of value.
Collaboration for innovation
Collaboration is an essential part of a digital business. And it is not only collaboration for the development of technology or a platform, but also the relationship opportunities between companies from different industries or cooperation between those that serve the same clients.
Banks cannot be oblivious to such collaborations both within their industry, offer new services within the so-called Open Banking, and with companies in the IT sector in the development of new platforms and services.
This opportunity for collaboration will require a shift toward more lateral and innovative thinking.
How to start the process of Digital Transformation in banks?
To begin a Digital Transformation process, banking leaders must ask themselves:
- What unconventional growth opportunities fit well with current resources and competitive position?
- How many chances can reasonably be exploited, and for how long?
- What capacities should exist to pursue these opportunities?
- Innovate from within existing companies, establish independent units, or partner with / acquire from outside?
Regardless of the opportunities banks decide to take advantage of, they will need to commit to and invest in new digital capabilities in areas such as design, innovation, data and analytics, personalization, and digital marketing, if they want their Digital Transformation to be successful.