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Digital Transformation in the Banking and Financial Sector – What is Worth Knowing?

Author: Anna Sorbet, Head of Marketing, FINANTEQ S.A.
The world of finance and banking are the areas that are undergoing extremely dynamic changes. The pandemic, increasing digitalization, and changing consumer behaviour are the main factors that have particularly affected the banking sector in recent years.

The need to adapt its operations to the new conditions of digital reality has also resulted in the need to redefine priorities – digital transformation has become the number one priority in finance and banking.

Digital transformation – what is it, and why do businesses go for it?

Digital transformation is using digital technologies in various areas of a company’s business to improve its operations. Simply put, it is the transition from analogue to digital processes.

For years, digital transformation has been shaping and influencing our daily lives and businesses. We have become accustomed to it and are taking advantage of its benefits more and more willingly and frequently. More can be said – changing behaviour and growing consumer expectations, in addition to the threat of competition, are one of the key factors accelerating the pace at which companies implement digital solutions.

For some time now, digital transformation has also become necessary for companies. In the face of the pandemic, for many companies that had not started the transformation process by then, deciding to start the transformation was crucial for survival in the market. 

Banking was no different. The processes of digitalization have accelerated.

For banks, transformation is not only about implementing digital tools to streamline work and processes; technology is mainly used to establish and maintain customer relationships. As customers moved from brick-and-mortar branches to remote channels, services and products also had to move to the digital world. Today, in most banks, customers do almost all their business online or even more conveniently in their mobile apps.

The digital-first approach in banking is a new normal

Today’s bank customer is a customer who operates in digital channels and is fully aware of the opportunities offered by modern technology. 

Banks wanting to retain and attract new customers must also offer new remote contact channels and modern digital services. A digital-first strategy based on the use of technology to reach out to customers and meet their changing needs from day to day is now a must-have.

Moreover, it promotes optimizing processes and procedures, increases operational efficiency, and reduces business costs.

What technological solutions foster digital banking transformation?

As an ally in the drive for digital banking transformation, technology offers a range of solutions and digital banking innovations that banks should consider. You can read more about technology trends and technology-supported banking trends in the article Digital-first banking transformation – an innovative approach by the financial sector.

The use of digital channels, especially mobile applications, will continue to increase when interacting with customers.

Banks will increasingly adopt a customer-first approach, not just a digital-first approach anymore. The push to maximize the focus on the customer and their needs and improve satisfaction and experience in their journey through digital banking are trends that will accelerate.

Providing new features in mobile banking, but on the other hand, paying even more attention to security is also one of the leading trends.

At the same time, banks will face the challenge of maintaining the human face of the financial institution. It has recently become expected, no longer only by older generations accustomed to f2f contact in branches, but also by a growing number of customers wishing from the bank not only live video calls on demand, but also a sense of trust and credibility. It is so important when it comes to financial matters. Digital banking? Yes. But only with a human face.

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From the banking institutions’ perspective, using solutions based on Artificial Intelligence (AI), Machine Learning (ML), and Big Data will become even more visible and widespread. 

Increasingly, instead of competing with other, banks and fintechs will strengthen cooperation for mutual benefit.

Read more about technology solutions to support digitalization in your bank offered by Finanteq at our website.

What are the key benefits of digital transformation in banking and financial services?

What are the benefits cited by financial institutions that have started the transformation process?

Among the many benefits, we write more in the article linked above, companies cite a noticeable increase in operational efficiency and revenue, as well as a positive impact on growth, innovation and sales.

With the digital solutions implemented, banks can better meet their customers’ expectations, improve the quality of their processes, products and services, reduce product development costs, or introduce new revenue streams. 

From the customer’s side, digital solutions improve their satisfaction and experience and increase their engagement and loyalty.

To sum up – digitalize your bank with Finanteq

We have already heard so much about digital transformation that it is nothing new.

Many banks have specific plans to develop and implement digital solutions. There are also those that, especially in the current challenging economic and geopolitical situation, are reducing spending, spreading it out over time. Or they have no plans at all.

On the other hand, many institutions still struggle to carry out the transformation efficiently and effectively.

Understanding the need to implement change, however, the necessity to start or continue a digital transformation process is not in doubt, and the benefits speak for themselves.

How to effectively implement digital solutions? Talk to us and find out.