The Importance of Digital Transformation in the Banking Industry

By CIOReview | Tuesday, May 31, 2022

In today’s high-paced market, financial institutions must embrace digital transformation to remain competitive.

Fremont, CA: Many people believe that digital transformation is just about developing new digital products and services, but it is so much more. Digital transformation for financial institutions entails refocusing on the customer experience (CX) journey.

Digital services such as online banking portals and mobile apps have become standard in today's financial scene. In two ways, financial institutions stand out. First, by ensuring that the omnichannel customer experience (web, mobile, call center, and in-branch) is consistent across all channels. Second, they can produce unique and customized items based on their clients' actual demands because they know them so well.

Banks may obtain a better grasp of how to use new technology and data to create better, more personalized experiences by mapping out the CX journey across each touchpoint. Account opening, card issue, and subsequently lending could all be part of a financial journey. There will be many touchpoints along the way, including online, mobile, in-branch, and over the phone.

The shift to digital is one caveat to this. Fintech has reached critical mass, with 88 percent of US adults already using it. As a result, customers are more inclined to compare their bank experience to their experience with fintech apps. While this does not negate the importance of in-person banking, it does indicate that banking consumers expect to conduct the majority, if not all, of their banking transactions through digital channels.

While customer-facing touchpoints help to set the tone for digital transformation, internal processes are just as crucial. Internal systems and processes, in fact, are frequently where banks become mired down. A consistent omnichannel experience is impossible without smooth systems and processes supporting the front-end solutions.

On the back end, digital transformation might include removing data silos by linking different data systems and transitioning from manual to automated and digital operations. It can also mean incorporating emerging technologies like artificial intelligence, machine learning, and cloud-based systems in a way that benefits both the customer experience and the bank's bottom line.

Digital transformation for financial institutions is about matching their clients' experiences with the seamless digital experiences they have in their daily lives. The ultimate goal is to make banking as frictionless and personalized as social media, e-commerce, or streaming entertainment.

Financial institutions must embrace digital transformation strategies and best practices to ensure that they remain relevant in the face of ongoing disruption from new technology and startups. Creating fresh experiences that consumers love across the whole CX journey is a guaranteed method for financial institutions to retain and win clients in an industry that is prone to rapid change.