It’s not long ago when Ms Marianne Lake, the then CFO of JPMorgan shook up the BFSI industry by declaring themselves to be a ‘technology company’. This happened at a time when JPMorgan has already spent and invested billions of budget on technology and cybersecurity. The main reason behind this strategy was to enable the company to match the interests of their growing digital savvy consumer base and also redefine the experience.
In the financial sectors, there’s an ever-growing list of challenges frequently requiring digital solutions. A PricewaterhouseCoopers survey lists these challenges as:
- Getting the branch traffic declined while also meeting rising customer expectations.
- Growing competition from non-financial tech companies like Amazon, Google, Facebook
- Rising regulatory constraints resulting in reducing profits.
JPMorgan realised that its edge over other competition depends upon providing innovation and technology to the customers. For this, an investment in digital transformation is needed to be equipped with the best technology and systems for maintaining a high performing standard of operations.
Benefits of digital transformation in banking and financial services
Digital transformation (DT) implies various developments in the banking industry which are undertaken to unite multiple fintech solutions in a way to automate, optimize, and digitize methods, along with increasing data safety. This process indicates many big or small changes reshaping the processes and technologies applied in financial services.
According to a study by Deloitte, 37% of respondents in BFSI organisations opine that their company has been sceptical and cautious in their digital transformation process, while 38% responded about being more forward in this journey. 25% claim that they are outdoing their rivals.
To outperform the competition, it’s better late than never for financial institutions to adopt digitization and harness the technical prowess in business to redefine the customer experience and optimise customer onboarding processes.
Digital Transformation is often flagged off with an adaptation of digital workspaces, where technology plays a vital part in facilitating the work process and takes the workload shift from offline to online. This is a crucial aspect that makes remote working possible worldwide, in today’s time, even for banks and financial institutions.
Other than redefining the customer experience, the process of streamlining operations with robust technology makes way for many other benefits, such as:
- Inter-team processes are propelled to optimum creating more efficient services
- Automation of older processes aids financial experts to aim their efforts towards tackling more challenging tasks in operations or legislation
- Greater ROI leading to more efficient problem-solving abilities and optimal customer onboarding.
- Hyper personalisation of UI UX for a more humane way of interacting with customers in the way of creating a trustworthy and genuine brand identity in the market.
- Faster escalation resulting in quicker resolution for critical incidents.
- Wider transparency at the organisational level.
The process of digital transformation may be specific for different companies, but it can be initiated by identifying the available best practices in place; e.g. employee needs, processes and tools, customer experience, hyper-personalisation. etc.
A Big 4 consulting firm, BCG says ‘Digital transformation must be a clearly articulated strategic priority, supported by appropriate funding, talent recruitment, openness to new agile ways of working, and a willingness to take risks.’
This is on basis of the following guidelines:
1. Set the vision:
The senior leadership should be fully committed and reinforce the reason behind taking forward such digital transformation while periodically highlighting its advantages for both its employees and customers. Addressing relevant concerns throughout the process is also necessary. This will arouse inspiration among employees and help them to stay motivated.
2. Providing continuous support and training programes
In the process of adopting a new system, it’s difficult for simultaneous monitoring across all sectors. For providing regular support, an internal champions network needs to be created in order to keep the momentum running and keeping all stakeholders aligned.
3. Investing in digital tools to empower collaboration
Setting up a collaborative workplace builds a solid foundation for a company’s digital transformation in BFSI. Technology is redefining the financial services sector and according to a PwC report, many organisations are now able to replace entire physical processes with fully digitised hubs and tools.
If information is easily searchable, manageable and readily available, the work can be focused on delivering top quality services while redefining customer experiences, optimal customer onboarding and hyper personalization of assistance.
All in all, digital transformation in BFSI is an exciting and important prospect for all businesses across industries. To stay updated and keep up with new players, it’s elementary that embracing digital technology happens and be put into practice as soon as possible.