Impact of Digitalization and Digital Banking
Need for digitalization in banking
Digitalization has become an important aspect of every business. The digital services touched the banking and financial institutions with an attempt to transform the process of operation. According to market research, by the end of 2021, almost half of the world’s adult population will be engaged in digital banking. A rapid surge has already been observed in using mobile banking among existing customers. Since the collaboration with partners has become the key aspect to succeed in business with the emerging concept of the right to information hence, financial services are extended 24/7. However, such assistance is possible only if banks and financial institutions are completely digitized.
Transformation in the way banks operate
A couple of world’s leading banks confirmed the fact that on average, approximately $3 trillion worth financial transactions happen almost every day electronically. A major shift is observed in the way banks and financial institutions work these days and the expectation of customers has heightened over the years demanding simple, unified and consistent service.
Initially, banks used to depend upon paper-based data for information but at present, IT has become the backbone of information through storing customer data with the help of technology and conversing of data into a digital format. This saves time and reduces human error. The extraction of data that is stored with the help of IT is seamless hence, it creates customer satisfaction and loyalty. Also, traditionally banks used to believe in cost reduction, process improvement and capacity enhancement however, the driving force now has become effort elimination, outcomes, and innovation. Customers can have access to banking services round-the-clock kudos to online banking. Since online transactions are cashless, hence managing transactions with large amounts has become much easier. Thus, banks too like IT companies focus on skillset, technology, and best-shore locations. To cater to such new goals, banks have started depending upon automation and artificial intelligence along with hiring skilled individuals and innovators to execute digital strategies.
Adoption of innovation
Now, innovation cannot happen overnight. It requires partnership with technology companies in the initial phase to create an apt environment to deploy artificial intelligence. This will uncover new opportunities for the banks to create a delightful customer experience. Thus, the growth and prosperity of financial segments are largely dependent upon innovative solutions and by easing transactions for customers through a simple interface.
A step towards secured banking
Customer satisfaction is also dependent upon customer safety in terms of an online transaction as well as disclosure of customer information. Hence, banks are considering privacy options such as the adoption of biometric technology through fingerprints and facial recognition. With cybercrime sprees associated with password theft, identity theft, account hacking banks are implementing technology-based security to strengthen security measures.
Change is the future
Change is vital for any business and so is also true for the financial institutions. Without the adoption of technology, a business can become extinct. Adoption of digitalization and innovative solutions will help the banking sector shift market trends in their favor and create digitized future banking.
- Kathakali Basu