How banks are adopting digital innovation

Today’s era is very influenced by digitalization.Almost all banks and financial institutions are keen on adopting and deploying latest technological trends. Technology plays a big role in every industry vertical including the banking and financial industry. All the ongoing digital transformation is obviously due to technological advances. Digital transformation has a totally different look and form in every industry and every organization.

Speaking in layman's term, digital transformation is the incorporation of digital technology in all major areas of any business. This digital incorporation leads to fundamental changes in how organizations operate and deliver services to clients. Let’s take a flashback and go to the last decade of technological advancements. It is pretty much clear that a few breakthroughs were impactful than others in terms of technological evolution and also, in their success in the banking sector. An example of this is the mobile revolution. The mobile revolution not only changed the way customers interact with banks but it also forced financial institutions to think and reshape what they had to offer to their customers. Talking about the last decade, it’s been 10 years since iPhone was launched. It emerged as a pioneering force in mobile revolution.

It is a known fact that mobile banking has still a lot to achieve before reaching its full potential. Almost all banks and majority of top lenders have already started taking steps in order to get closer to their digital consumers and meet all their needs. Here’s an example that shows initiatives taken by banks to meet their customer’s needs: Lenders these days enable clients to apply for mortgage applications online via their smart phones and computers. To reduce manual tasks, redundancy and time to offer, some of the lenders have also adopted end-to-end loan processing platforms. However, not all of them can be called totally digital. According to a survey, 75 per cent of respondents say that about only 30 per cent of their loaning processes are supported by digital technologies in 2018.

How do digital capabilities help promote banking services?

Basically, there are 4 ways in which digital capabilities can be utilized by banks to create value.

1.Digital technology boosts bank’s connectivity not only with the clients and enterprises, but also with their employees and merchants. Right from online transactions, payment solutions to functionalities enabled via mobile and various opportunities to enhance bank’s branding on all the social media platform.

2.Digitalization throws light on big data and analytics to enhance decision making. Banks are willing to deploy such analytics based on big data in various areas such as purchase and sale, designing the products, pricing, and also for the design of satisfactory customer experiences.

3.Digitalization enables adoption of straight-through processing. In other words digital technology makes sure there is fuss-less automation and reduction in number of repetitive, low-value and low-risk processing.

4.A good means of promoting innovation across numerous products and enterprises is by digitization. A few examples of such kind of promotion include brand marketing across all social media platforms. Along with sourced support, as well as incorporating business models that are ‘digitally centered’.

A good news for CEOs is that each of the above mentioned ways of creating value can be applied to all the functions of each and every bank. However, it is a difficult task to create a digital plan, followed by driving a digitally centered revolution in the banking sector. Generally, all industrial sectors have a requirement of high level of coordination. Same is the scenario with the banking and financial sector. There is a requirement of coordination of inter and cross-bank initiatives and actions leading to prioritization, resource allocation and cooperation when it comes to execution.

It is critical task to restructure a bank’s business model and alter its processing for successful digitalization. Leveraging innovative capabilities in emerging technologies such as Big Data, AI and Cloud deployment will not only boost the speed of digital transformation initiatives in the banking and financial sector but also deliver business-wide process enhancements too.