Digital Transformation for the Financial Services Industry: How Banks and Other Institutions Are Adapting to a Mobile and Virtual World

A woman holds a smartphone displaying a green check mark on the screen and the message "Congratulations! Your finance has been approved," implying she has been approved for a loan via a mobile banking app.If you want to check your account balance, deposit a check, or transfer funds these days, you probably don’t have to plan a trip to your nearest bank branch to do so. Many of us can perform all of those tasks and more by simply logging into a mobile app and scanning a check or scheduling a transfer.

That’s one example of digital transformation in the financial services industry. Particularly in a world where in-person interaction has become hazardous because of the pandemic, digital transformation – the process of adopting new technologies to improve business processes and adapt to evolving consumer expectations – has become mandatory for companies that want to stay competitive and relevant, according to Gartner.

“While there have been unique stressors imposed on all industries as the ongoing pandemic unfolds, the enterprises that were already more digital going into the crisis are doing better and will continue to thrive going into 2021,” John-David Lovelock, distinguished research vice president at Gartner, stated last fall in a press release.

We’ve previously covered what COVID-19 means for digital transformation, as well as how the drive to digitize affects healthcare organizations, manufacturing companies and small businesses. In this blog entry, we’ll explore what digitization looks like in the financial services industry and why organizations in that sector must prioritize it to succeed in 2021 and beyond.

How New Tech Can Enhance CX in the Financial Sector

Because of COVID-19, many financial services organizations – like businesses in other industries – have significantly sped up their digital transformation initiatives, according to the Security Boulevard article “3 Ways Financial Institutions are Embracing Digital Transformation.” New technologies that financial institutions have embraced include automation and AI. For instance, the article states that some have automated compliance and risk assessments.

Additionally, some financial organizations have adopted cloud technology – such as cloud phone systems – to accommodate remote workforces and improve the customer and employee experiences. For instance, one of our clients – a global financial services organization and Fortune 100 company – recently replaced an outdated contact center solution with a next-gen Contact Center as a Service (CCaaS) platform, which allows for greater flexibility and accessibility for their agents around the world.

Another example of digital transformation in financial services includes the embracement of mobility. Many banks and other financial institutions now have mobile apps, allowing consumers to access their accounts and perform many functions via smartphone.

For banks, in particular, delivering personalized mobile and online customer experiences is a must to keep up with their clients’ evolving preferences: The portion of consumers who reported interacting with their bank online or through a mobile app shot up from 32 percent in 2018 to 50 percent in 2020, according to the 2020 Accenture Global Banking Consumer Study.

As COVID-19 made in-person interactions potentially deadly, many people went from banking face-to-face to doing so from a computer or mobile device. Forty-four percent of consumers ages 18 to 34 signed up for online or mobile banking during the pandemic, according to a global study released last year by Boston Consulting Group. Even after the public health crisis dies down, 24 percent of customers (on average across all 15 countries included in the study) anticipate going to bank branches less or not visiting physical bank locations at all.

Subsequently, it seems clear that success in banking depends heavily on delivering the digital, mobile and personalized experiences today’s consumers want.

Digital Transformation Challenges for Financial Institutions

Given how heavily regulated the financial services sector is and how commonly organizations in the industry find themselves targeted by hackers seeking access to monetary data, cybersecurity and compliance are pressing concerns when financial institutions adopt new technologies.

As a result, organizations in the financial services industry must take steps to ensure data security when implementing new IT solutions, such as the following:

    • Properly vetting IT solution suppliers and ensuring they’re compliant with all relevant regulations

If you’d like to learn more about digital transformation in financial services or any other industry, we offer digital transformation advisory services and would be happy to assist you. We have experience guiding organizations across all industries through digital transformation initiatives and can craft a road map for your company that includes cloud solutions, IoT, mobility, automation and more.

Give us a call at 877-599-3999 or email to take the first step on your digital transformation journey.

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