What Does It Take to Create a Truly Digital Bank?
In the current age, digital experiences permeate almost every area of contemporary life. Most if not all of us are constantly connected to the digital universe through the internet, mobile phones, tablets personal computers, and other technology. This hyper-connected culture has changed the shape of the financial industry as a whole, creating mounting demand for faster and more personalized digital services and a wider array of innovative, technology-driven banking solutions.
Traditional banks the world over have consistently found that the closed, siloed data platforms they typically employ lack the agility required to meet the demands of the digital age. Many are in agreement that adjusting to this radically evolving environment necessitates embracing digital banking transformation. Modernizing traditional processes and exploring contemporary digital solutions are key components of banks’ push to become more adaptive, flexible, and integral to the lives of modern consumers.
If embracing digitization is the path banks must take to maintain relevance and competitiveness in the years to come, what specific action must they carry out in order to get there? The following are among the most fundamental steps needed to transform into a truly digital bank.
Fundamental Steps to Digital Banking Transformation
Incorporate AI Technologies into Enterprise Processes
Contemporary artificial intelligence and machine learning (ML) technologies have become so diverse and advanced that banks can now use them to augment operations across every department. For instance, AI-equipped technology can help banks develop intelligent financial processes, facilitate insightful customer interactions, understand enterprise risk and market opportunities in greater detail, and avert financial crimes and other security risks, among a host of other uses.
Utilizing machine learning also goes a long way toward building more efficient, autonomous systems for banks. Robotic process automation lets banks use insights from machine learning to develop more intelligent operational processes that can run faster and at lower costs, with minimal user intervention. These systems collectively enrich the experiences of end-users and boost banks’ operational efficiency on the whole.
Optimize the Organization’s Data Platform
Data has become an increasingly valuable resource for financial institutions over the past decade. Up-to-date information is, after all, the key to understanding and responding adequately to consumer and market demands, as well as keeping up with ever-changing regulatory requirements. However because banks are gathering and handling more data than ever before, they require unprecedented numbers of people, processes, and technologies to process it properly. Furthermore, the more exposed this sensitive financial data is, the more vulnerable the bank will be to security breaches and other operational risks.
To properly leverage their data platforms, banks should seek software solutions that provide a unified source of information across multiple departments and business divisions. An integrated data management system can pull essential information from multiple sources and consolidate that data into a single application. This in turn enables smoother and more efficient information-sharing across the entire enterprise, allowing for productive collaboration between departments and more synchronized business processes.
Boost Business Agility through Cloud Adoption
Banks seeking to become more agile are best served by approaching digital transformation in a holistic way. Standardizing and automating as many manual tasks as possible is crucial here to boost the bank’s responsiveness and enable it to remain competitive. Entrusting basic calculations, data management processes, and other fundamental functions to intelligent technology frees up staff to focus on innovation. In the process, banks can drive their own effectiveness and achieve higher standards of operational excellence.
In many cases, adopting cloud-enabled digital solutions has played a key role in increasing banks’ business agility. Non-traditional banks, fintech organizations, and other modern competitors work predominantly from the cloud and run their businesses through streamlined, simplified processes. Traditional banks can compete by investing in autonomous, highly secure cloud infrastructure to enable easier workload management.
Offer Hyper-Personalized Customer Engagement
Contemporary banks’ customer base is composed—in large part—of digital natives who expect their banking experiences to be not only convenient but also highly personalized. To establish a firm foothold in their customers’ financial lives, banks must seek to understand their clients in detail. It’s especially crucial for banks to look beyond the behaviors and activities customers engage in on financial channels and understand the underlying motivations that drive these actions. Gathering this essential insight will allow any bank to better anticipate, rather than belatedly react to, changing customer needs.
The ability to access bank services across desktop and mobile channels is one of the most pressing demands modern customers make of their banks. Banks should thus seek to invest in the technological infrastructure needed to provide an omnichannel experience that customers can access on whatever platforms and devices they find most comfortable and convenient. Key features of such an experience include the ability to communicate and transact with the bank via SMS, social media, chat, or voice call. Secure peer-to-peer payment platforms that enable customers to send and receive funds digitally are likewise in high demand.
As the push toward greater digitization brings ever more rapid changes to financial business models and revenue streams, any bank seeking to succeed must learn to adapt. The willingness to retire rigid and antiquated systems, to listen and respond to consumer input, to and welcome technological innovation will spell the difference between whether a bank is able to sink or swim in the current business environment.
