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Essentials of Digital Transformation in Financial Services

09 Mar 2021

Digitalization is the need of the hour. The ever-increasing customer expectations, stiff competition, complex regulatory precedence are factors pushing businesses to innovate with technology.

For financial services, it has made a notable impact on business operations. Its adoption has led to opportunities to make operations faster and cost-effective. The sector has been an early adopter of technological tools. It relies on high-level IT for business process optimization and customer interaction. It helps meet regulatory deadlines, improve employee and customer experience for a competitive edge.

According to IndustryARC’s report, the global FinTech market is expected to grow from 25 to 30% during 2019 – 2025.

Though, what does it really mean to be digital in financial services? Why should enterprises like you go about creating an optimal digital landscape? With this blog, you can expect answers for this and more;

  • Benefits of Digital Transformation in the Finance Sector
  • Trends Shaping Digital Transformation in Financial Services
  • Digital Transformation Strategies for Financial Services
  • Key Challenges of Digital Transformation in Banking

Benefits of Digital Transformation in Financial Services

Advantages of digital transformation in financial services

Digital Transformation Trends in Financial Services

  • Enhance Customer Experience with AI and ML
    The use of AL & ML enables the automation of low-value repetitive processes and customer queries. It helps to free up IT staff to take on more complex and high-value processes and projects. AI-technology plays a vital role in identifying and predicting fraud possibilities. It supports financial firms to fulfill regulatory and compliance changes effectively. Also, it helps decode customer behavior and reveal interesting observations. For example – Erica, the virtual assistant from Bank of America, has already helped over 6 million users and processed over 40 million requests.
  • Digital Innovation With Big Data
    Data is everywhere. The financial services sector is already beginning to realize Big Data’s potential. As it gets smarter and faster, banks are thinking up new ways to market their services and use data to facilitate more personalized experiences for their customers. One of the most crucial ways big banks will leverage the hordes of consumer data they have is to use it to train ML algorithms to mechanize their mundane processes – saving IT staff hours of work.
  • Explore Newer Business Opportunities With Cloud Banking
    Finance organizations are increasingly adopting the cloud as their route to digital reinvention. Cloud enables IT Managers with a massive reduction in costs across both hardware and IT operations administration. Further, cloud migration helps save around 15% on all IT spending, with small to medium-sized businesses at times saving up to even 36%.
  • Mobile Banking
    Digital banking allows customers the convenience of depositing checks, transfer money, pay bills, check transactions, and apply for loans through mobile devices. More and more customers prefer online banking as it allows 24/7 access, enhanced security and ease of use. Mobile banking is gaining traction in financial institutions and is expected to grow in the coming years.
  • Blockchain
    It is an emerging trend that is gaining momentum gradually and will play a significant role in digital payment solutions. It applies to various operations such as digital payment, loan processing, investment management, cross-border transactions and capital markets. It enables the prevention of fraudulent activities, provides enhanced transparency, increases transaction speed & more.

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Digital Transformation Strategies for Financial Services Companies

With digital-first as the future of financial services, the focus would be on responding quickly to the latest technical developments and craft personalized, relevant experiences throughout the entire customer journey. It is beyond basic transactions. The digital transformation in banking and financial services must help appeal to more millennials and gen Z consumers as they start their engagement.

Though the journey is unique for every organization, listed are some of the best practices to get started.

  • Selection of modern technologies that meet the specialized needs
  • Understand the modern-day buyer expectations to understand and engage better with customers
  • Focus on personalization to deepen the relationships between customers and their financial advisors to build long-term trust and credibility
  • Leverage the power of data and analytics to track progress and use to be closely engaged with customers to improve their experience
  • Define a clear finance digital transformation roadmap with milestones and be prepared to redefine it

Challenges of Digital Transformation in Financial Services

The most common issues during the transformation process include:

  • Longer time to implement the solution
  • Complex system to manage or change
  • Failure to meet overall user expectations
  • Fails to engage users
  • Lacks intelligence on user content

As a custom enterprise software development company, Rishabh Software can help you navigate industry disruption and equip you for future challenges.

Why Choose Rishabh Software

Our unique blend of extensive experience and in-depth industry knowledge in fintech enables us to revolutionize your digital operations to make them completely customer-centric. We can assist you in leading through your technology transformation in BFSI by leveraging advanced technologies. Our approach to driving the change in your organization helps you meet the emerging customer’s needs, accelerate time to market, compete utilizing technology and enrich security.

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