How to Achieve a Successful Digital Banking Transformation

Digital Banking Transformation is necessary to improve CX. Whether a local bank or a conglomerate, smart solutions can help.

Digital transformation continues to be a priority in the banking industry. It helps improve their operations' efficiency and effectiveness by streamlining processes and automating tasks. As a result, customer experience (CX) and customer satisfaction are improved. 

Additionally, a digital transformation will help your branch become a top performer. Financial institutions can improve their offerings and service delivery by embracing digital technologies and processes.

These improvements result in the reduction of costs and increase profitability. Automation leads to less dependence on manual tasks and lower operating costs. This helps with maintaining healthy margins, and with the redistribution of labor and financial resources while staying competitive in a challenging market.

5 Challenges that Digital Banking Transformation Faces

The Digital Banking Report (DBR) explains how financial institutions face many challenges as they embark on the journey toward digital transformation. According to the report, some of the issues that arise are:

  1. Resistance to change: Transformation to digital banking usually requires significant changes in how an organization operates, which can be challenging for long-standing managerial employees and other staff.

  2. Limited resources: Financial institutions may find it challenging to allocate the resources required to support digital transformation initiatives, particularly during times of economic uncertainty. This becomes more difficult when significant investments in technology or training are required.

  3. Complexity: Legacy systems in financial institutions are often mired in preceding business strategies. They are frequently tricky to integrate with newer digital technologies. This can make implementing new digital solutions complex unless the solutions are integrated incrementally. 

  4. Data and security concerns: Concerns about data privacy and security are growing as banks and credit unions manage more data. Keeping this data secure is critical, but it can be difficult as organizations implement new digital technologies.

  5. Regulatory compliance: Financial institutions must implement complex and continually shifting rules. As organizations implement new digital banking transformation technologies, compliance rules become more complicated.

Overall, financial institutions must address these challenges strategically and proactively as they work to transform their internal and external operations through modern digital technologies.

4 Trends That Will Enhance Digital Banking

4 Trends That Will Enhance Digital Banking 

Financial institutions have made significant progress in their digital banking transformation journeys, but maturity levels vary. Meaning, some companies have fully embraced digital technologies and implemented a wide range of digital solutions, whereas others are still in the early stages.

The Digital Banking Report asked institutions worldwide about their digital banking transformation maturity level. They discovered that 18% believed their solutions were deployed at scale, while 61% stated that they were partially deployed. Concerning this, 38% of organizations that believed they had deployed digital banking transformation solutions at scale were not receiving the expected level of results. Similarly, 31% of organizations with partial deployment did not get the expected results.

The CX and the need for increased engagement in a safe and secure environment are crucial to digital transformation. Here are 4 trends to consider when it comes to taking digital banking transformation and the customer journey to the next level. 

  1. Including Cybersecurity and Omnichannel Experiences: These features will be the top focus for the banking industry for the next 3-5 years. When DBR asked financial institution executives about the success of their digital transformation efforts, they agreed that cybersecurity and supporting digital channels were the most effective. 

  2. Rethinking Existing Models: The expected increase in open platform players (from 8% to 26% of financial institutions in 2030) is the most significant shift in business model deployment. This could lead to credit unions and banks trying to diversify their product offerings, invest in them, and supply. A wider range of financial products and services, such as wealth management and investment services, or by catering to new customer segments.

    Financial institutions are considering changing the value they offer the market and the best way to deliver this value at scale. Many financial institutions' business models will undergo a major change in the near future.

    Existing business models may also undergo slight changes to respond to a changing market. As more people conduct financial transactions digitally, banks and credit unions may be able to resell their digital banking capabilities to other legacy banks or alternative providers, such as mobile banking, digital account opening, and digital payment options.

    Prioritizing the CX will definitely be at the center of future business model evolution. Banking institutions will prioritize improving the customer experience by offering personalized services, improving the value proposition, simplifying distribution channels, and enabling technology to make banking more convenient and efficient.

    One way to provide customers with a more personalized experience, is by incorporating a Marketing One to One solution. Through this solution, any bank will be able to enhance its process of onsite visits and by offering customized products and services.  By having access to this information, customers will have the ability to make a virtual appointment or to fill use Online Forms to request a product or service. 

    At the same time, through Assistant Anywhere, customers can access their bank information from wherever they are. This gives them freedom to access fast solutions when they need help, through channels such as live chat and videocalls. 

  3. Increasing Automation and Improving Operational Efficiency: Those who wish to be competitive (and innovative) must reconsider some of their processes. Onboarding is an excellent example.

    According to an article published by McKinsey , improving the onboarding experience for business clients can be a key differentiator for banks, increasing efficiency and profit growth. According to McKinsey, training a new corporate client can take up to 100 days.

    The report explains that half of all banks lack technological solutions for many onboarding processes. Of course, these issues aren't limited to business customers; we see them all the time, but especially among Millennial and Gen Z consumers.

    Now is the time for financial institutions to rethink who they want to be in five years — how they want to compete in the market and differentiate themselves — and then redefine their systems to be more efficient. RPA (robotic process automation) and AI (artificial intelligence) must play an important role, but there must be a balance. Consumers today would like to have high-tech and an enhanced experience at their bank of choice.

  4. Investing in Modern Technology: Financial institutions cannot implement all the changes themselves, so technology like a digital platform that is open to and uses APIs (application programming interfaces) or machine learning will help.

    Since CX is the main character of this transformation, and at ACF Technologies, we provide smart and effective solutions that change how customers and businesses interact. 

    With Q-Flow, banks can automate their systems, gather Customer Feedback, and manage queues and appointments through any device of their choice. At the same time, clients can contact their banks from anywhere in the world with  Assistant Anywhere. In both cases, customers will be in control of their time and will not sense a loss of time while waiting in line. Automation systems give customers freedom and flexibility. 

Learn more about how ACF Technologies can improve your CX by reading about Banca Di Asti's transformation.