What Is Digital Banking Transformation? 5 Interesting Facts To Know!

Ever since the world has undergone modern changes, everything people do has also become different. Everyone has adapted to the alterations made by technology. For instance, the way they handle money has transformed too!

Digital banking transformation is a way of a transaction between banks and customers. How they transfer, receive, and manage money became dissimilar to the traditional processes. Today, they can control their wealth online, anytime, and anywhere.

Is this too much information to take? Continue reading this article, for it will guide you to five essential facts about digital transformation in banking. You will get to know its purpose, benefits, and how to start it!


What Is Digital Banking Transformation?

Digital banking transformation is the conversion of traditional banking processes to digital services. It aims to improve data integration, customer experience offerings, and process automation. It also enhances organizational flexibility and sales.

Aside from that, digital transformation also changes how banks and financial institutions work. This aspect includes understanding digital customers’ behaviors, needs, and preferences. Moreover, they also need to meet every customer’s needs while improving data safety.


What Are The Technologies Used For Digital Banking Transformation?

Banks and financial institutions have created different strategies to improve their banking services. With that, various technologies have also emerged to help. These include the following listed below.


1. Big Data Analytics

Big data analytics play a role in monitoring risks and analyzing customers’ expenditures. It also increases customer loyalty by providing feedback.

Moreover, this technology also helps create new ideas for developing banking processes. Lastly, it also helps financial institutions plan responses to growing market demands.


2. Artificial Intelligence

AIs include chatbots and online assistants. They aim to improve customers’ interaction and experience. Also, they enhance the banking processes’ efficiency and security control.

Listed here are examples of artificial intelligence applications to banking.

  • Fraud Detection

A fraud detection system (FDS) prevents financial crimes and suspicious activities. It manages the security relating to identity fraud, money transfers, and fraudulent cases.

  • Robo Advisors

This technology is an automated platform that provides suggestions and advice. Customers can learn about financial aspects and investment management through Robo Advisors.

Moreover, it has tools developed using AIs. These AIs have machine learning, cognitive systems, and natural language processing.

  • Productivity Gains

AI helps banks and financial institutions to have higher documentation accuracy. Furthermore, it enhances new customer onboarding communications and compliance reporting.

  • Credit Scoring

Artificial intelligence improves credit access. It also provides suitable plans for debt management for customers. Also, it manages credit risks to have financial stability.

  • Virtual Assistants And Chatbots

These technologies allow a bank to answer customer questions and cater to their needs quickly. It enables faster banking transactions and quick yet practical solutions and responses.


3. Blockchain

This technology is a decentralized database that works to achieve the following:

  • Higher accuracy
  • Transparency and convenience to customers
  • Secured data transactions
  • Enhanced interface

In this case, Blockchain is one of the best technologies for preventing fraud detections and cyberattacks.


4. Augmented And Virtual Reality

ARs and VRs also improve customer experience like the previous ones. They allow these people to transact with banks even if they are in their homes. Moreover, they seek to provide a banking experience with interactions and transactions everywhere.


5. Internet Of Things

The Internet of Things or IoT provides real-time data analysis. It allows customers to make payments within seconds without contacting anyone. This instance became possible because IoT connects devices in a network.

Here are some examples of applications of IoT.

  • Proactive Customer Services

Banks and financial institutions can predict customer needs thanks to IoT. Whenever people visit a bank, the person in charge will most likely gather data about them. In that case, the bank can track their needs and queries.

  • Wearable Payments

Smartwatches are perfect examples of wearable payments. For instance, a customer wanted to make payments or transactions. He can use his smartwatch to interact with the bank.

In this case, it can be easier for the customer to settle payments anytime and anywhere.

  • Smart Collaterals

Banks can control customers’ mortgaged assets through this technology. It allows them to track an item loaned by a customer. Note that they do not need physical custody of the thing to monitor it!

  • Automated Transactions And Wealth Management

IoT allows customers to gain insights to improve decision-making. Having enough skills in this matter can help manage one’s wealth efficiently. Aside from that, IoT also enables payments to undergo real-time through automated transactions.


6. Robotic Process Automation

Robotic process automation seeks to:

  • Stop repetition
  • Improve efficiency
  • Enhance customer satisfaction
  • Provide quick services

Moreover, this technology includes customer service bots that handle low-priority questions. Some examples are people with queries about balance checks or payment inquiries. In this case, human agents can have more time to answer high-priority questions.


What Is The Purpose Of Digital Transformation?

The digital transformation in the banking industry has become one of the ways to make banking processes easier. Its primary purpose is to help many customers to feel at ease while managing their money.

Nonetheless, here are more of its goals to know more.

  1. Improve customer experiences
  2. Manage the banking processes
  3. Meet the needs of the customer demands
  4. Understand people’s preferences and behaviors
  5. For banks and financial institutions to grow and stay relevant
  6. Assist people in paying bills, transferring money, applying for loans, etc.


How To Start A Digital Transformation In Banking

One can follow a few steps to start with the digital transformation in banking. Please read the following steps below to get familiar with them!


Step #1. Make An Outline Of Your Objectives

First, you will need to set your realistic goals. You can list down what you want to do and achieve in this transformation. Moreover, you can also jot down your objectives and why you are doing this project.


Step #2. Examine Competitors And Own Offers

Next, you will need to check your current services, including the quality of your website. You will also need to examine how you interact with your customers. Aside from that, you may also want to conduct a competitor product review.

In this case, you can compare the approach and processes both of you are doing.


Step #3. Check The Processes

After that, you may also list the processes you want to include in your transformation. You can reflect on customers’ feedback or research for possible ideas.


Step #4. Do An Inventory Of Your Systems

Note your current capabilities and systems. Analyze what you need to improve and what areas you need to enhance. After that, you can make plans to make them better.


Step #5. Make Plans About Communication Approach

Communication is an essential part of banking. That’s why creating plans for improving your communication approach is crucial.

You can think of the best strategies for interacting with the customers. You can look for different approaches and choose the best among them.


Step #6. Conduct Tests Of The System

If you have already made the digital transformation, you can test the system afterward. You can check for possible problems and areas of concern in this case. After that, you can make techniques to solve the conflicts.


What Are The Benefits Of Digital Banking Transformation?

Listed below are five benefits of digital transformation in banking.


Quicker Processes And Less Waiting Time

Most customers will not like it if the transaction takes too much time. Good thing digital transformation can lead to safer and faster transactions.


Capabilities To Predict

Having the capabilities to predict what may happen is essential in digital banking. You can know the possible problems and scenarios you may encounter in the future.

In this case, you can prepare solutions in advance. Furthermore, you can also make suitable decisions to prevent unwanted happenings.


More Secured Transactions

You can prevent fraud and crimes. You can also provide safer transactions to your customers, building trust and loyalty.


Risk Management And Prevention

As stated earlier, having a successful digital transformation can prevent fraud. Also, multi-level validation can prevent mistakes. This aspect is crucial in banking because errors can lead to severe conflicts in money.


Automatic Works For Repetitive Tasks

You can save more time and effort with automatic processes. Your software can handle repetitive tasks instead of putting a workforce to do the work. In this way, your personnel can do other essential activities.


Why Not Make Your Bank Way Better With Digital Banking Transformation?

Digital transformation in banking can contribute a lot to a bank. It ensures that the transactions are hassle-free and secured. Moreover, people can feel at ease if they know that their sums of money are safe in a trusted place.

Aside from that, this transformation also makes the interactions smooth and more convenient. You can make transactions wherever you are using online applications and technologies.

However, people still need to follow things to make every transaction count. It is always better to be wise and careful in handling money!

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