Why is Now The Perfect Timing for Digital Transformation in Financial Services?
Nowadays, Financial organizations are at the peak of their business transformation. Several financial businesses have launched their apps to compete in this digital transformation in financial services.
The financial services industry has traditionally been a slow adopter of modern technology. But with the rise of FinTech, consumer expectations, and government pressures being felt throughout the industry, the pressure is on.
This blog will look at some of the main reasons why now could be the perfect time to transform your business digitally.
What does digital transformation mean?
The term “digital transformation” refers to integrating digital technology into all aspects of an organization, which results in a fundamental shift in how the business operates and provides an enhanced experience to its consumers. In plain language, when a company adopts new or develops technology to improve business performance, this is called “digital transformation.
In the last five years, the rise of FinTech companies and solutions has completely changed how financial services are done. Changes in what customers want, fierce competition, more complicated rules and regulations, and pressure to streamline operations. And other things push for reinvention and innovation.
Open banking has brought a new era in which systems can quickly and easily connect to new platforms and apps. Digital ecosystems that work well together quickly replace physical banks and paper systems.
Various kinds of companies, from banks and insurance companies, have been around for 100 years. FinTech start-ups that have only been around for a few years, all are changing their business using digital transformation.
Why is now the right time for digital transformation in financial services?
Still, a lot of groups are on the fence. With everything going on, they are not sure if it is the right time to start a program to change to digital. They worry that it could force too many changes on teams that are already going through a lot.
A digital transformation program that works well will help in many ways. It can make things run more smoothly without hurting customer service. It can make workers more productive while lowering overhead costs.
For those still on the fence, it is the correct time for transformation in digital services, and below are a few WHYs.
The pandemic made us question our assumptions.
The pandemic has taught us a lot and necessities digital transformation for every business. Since the covid19 has hit the world, digital transformation is no longer just a good to have. After covid, it is now a need and necessity to have a website or a mobile application, website, or web application to compete in the new world.
Increases the top line and bottom line of business
Having an application increase our range to cover customer and provide services; let us take an example of a bank; if any bank does not have an app, they will only cover a particular town; otherwise, you must open branches all over the country or worldwide.
In contrast, an application can be reached by several customers worldwide, and you do not even need to open many branches as your application will provide all these services without the need for any human interference.
Here, your customer and service reach will increase without costing much, which will also increase your top line and bottom line of business. That is why we are doing business and providing services.
Necessary to meet market standards
It is now necessary to have an application or digital platform to stay in the market and meet the digital generation’s needs. Now increased consumers prefer online purchasing and cashless payments.
Mastercard and Visa have reported more than 40% and 150 % increases in digital mode payments; you can get an idea of how fast consumers are shifting towards digital services.
To survive in the market.
There are several reasons for digitalization in financial services, but nothing can be more important than surviving. I am not haunting you, or I cannot even make it, but it is true if you want to survive in the market now, you must transform your business digitally. It does not matter which business; you will only be able to do well if you go through a digital transformation.
The importance and need for digital transformation in the financial industry
If you think about how banking has changed over time, you will see how digital transformation in banking and financial services has made life easier for everyone. From simple branch offices to ATMs and mobile apps, digital transformation has made things easier, given more options, and made things more fun. Customers these days are more interested in digital products and experiences.
The way financial businesses work and how they serve their customers has changed a lot because of digital transformation in the financial industry. And, as we have already seen, it will keep changing and becoming increasingly personalized over time.
Traditional ways of banking are now outdated. They take a lot of time and a lot of work from a lot of people. Processes are hard to carry out. This shows that the tasks need to become more digital to be done faster and easier.
Not to forget how covid-19 has changed the situation. People have turned to online banking because lockdowns are happening, and the safety of our health is getting worse. They like having all their banking needs at their fingertips.
The answer is going to be digitalization.
In fact, the next generation will be one of the first to use the Internet and will be part of a world that is already digital. The next generation will be able to ride the digital wave much earlier than we did when we were in our teens or late 20s.
They will certainly grow up with it. So, if banks want to be able to serve them in the future, they need to start changing to digital now.
No doubt that People need financial services, but financial services also need people. Every year, new financial services produce new ways to add value, so every financial service needs to adopt digital transformation to keep up.
All these things point to rapid growth in the financial sector. Financial services going through this change can expect to save money and speed up their processes.
Top Trends of digital transformation in Financial Services
AI (Artificial Intelligence)
AI (artificial intelligence) and machine learning (learning by machines) have been getting a lot of attention lately as digital trends in many fields. This is because they are important in many ways. AI systems that have been trained can help financial service providers find patterns and automatically take steps to fix problems. For example, an AI system can help find people who are up to no good when they try to open a fake bank account or do a fake transaction.
AI tools can also be useful for many other things in the finance industry, such as finding new market opportunities, predicting how customers will act, and finding fraud. Since AI can be used for many things, it is not surprising that it is becoming increasingly popular in the financial world.
The finance industry has always been one of the first to use modern technologies. The move to cloud-based services is just the latest example of this. By moving their services and processes to the cloud, financial service providers can make them more scalable, secure, and efficient. Many organizations also see cloud services to meet environmental and social governance commitments.
Many companies in the finance sector want to reduce their carbon footprint and moving to the cloud can help them do that. Cloud-based services can also help financial service providers improve at being environmentally friendly. They can have less of an effect on the environment if they use less energy and resources. As more financial companies move to the cloud, they not only help themselves but also help make the future more sustainable.
Fintech, which stands for “financial technology,” is a new type of technology that banks and other financial companies use to make their services more efficient. From the early days of ATMs and credit cards to today’s digital banks and blockchain technology, it has changed a lot.
The world of finance is being changed by fintech, automated technology, and machine learning algorithms. They make it easier and faster for people to get financial services and give businesses new ways to grow. Fintech is changing how we think about money and banking, as well as how we live and work.
Blockchain technology is being used increasingly quickly because it has many advantages over older systems. For instance, blockchain can be used to handle digital payments without a third party like a bank. This can speed up the process and cut down on transaction fees. Blockchain can also be used to do an escrow service. Which can protect both buyers and sellers when they do business online.
Blockchain can also be used to speed up the process of applying for and getting a loan. By using blockchain, lenders can find out more quickly and easily who a borrower is and if they are a good credit risk. As blockchain technology keeps getting better, it is likely to become more important to the world economy.
Data has been used by financial institutions for a long time to help them make business decisions. But the amount of data that is now available has made it hard for banks and other financial institutions to process and analyze all of it. Luckily, machine learning is giving us a way out.
Machine learning can help banks make sense of the massive amounts of data they gather by using algorithms to automatically find patterns and trends. Because of this, banks are better able to make their services fit the needs of their clients. Also, banks can better protect their customers from financial crime by using machine learning to find signs of fraud. With so many benefits, machine learning is changing how financial institutions do business.
It is not surprising that the financial world has gone mobile in an age when people can hail a ride or order a meal with the tap of a finger. Banks and other financial institutions have made apps and online portals that let customers check their balances, move money between accounts, and pay bills while they are active. But they are not the only people playing.
In recent years, third-party financial service providers like Acorns, and Mint. Robinhood has become more popular because they offer new ways to solve common financial problems. Customers do not have to go to a brick-and-mortar bank to get help with budgeting, or advice on investments. As the world becomes more digital, traditional financial institutions will need to step up their game to compete with these quick-moving newcomers.
The financial services industry is under a lot of pressure to keep up with how digital business is always changing. Businesses in the finance industry need to embrace digital transformation to stay competitive. This will help them streamline their operations and offer their customers new, innovative services.
OTS is proud to have helped a lot of businesses reach their goals on their way to becoming more digital. Many projects and case studies show what we have done and how good we are in this field. Contact us right away to learn more about how we can help you reach your goals for digital transformation.