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5 Ways in Which Digitally Transformed Banks Are Different

The banking sector is opening up to the concept of digital transformation – not just to optimize internal operations, but also to enhance competitive standing and elevate the customer experience. Most banks have come to the realization that, by adopting modern approaches and integrating digital technologies, they can deliver greater value to their customers while also improving the bottom line.

Here are 5 ways in which digitally transformed banks are different:

  1. They are able to respond to changing trends with agility: Banks that rely on traditional approaches and propriety systems often find it difficult to respond to changing trends – which is not the case with digitally transformed banks. Technologies such as analytics and AI present banks with timely insights into their operations along with forecasts on the changing moods and needs of the customers. This can give banks the opportunity to adjust their business strategy (and processes) according to the latest trends and ensure a promising and financially rewarding future. Digitally transformed banks can also keep up with changes in the regulatory landscape and take steps to ensure timely and effective compliance.

Of course, it’s not enough to know what needs to be done. Digitally transformed banks are characterized by their ability to take data-driven actions quickly. They rely on flexible and responsive technology approaches like microservices and fundamentally more agile strategies like working with card and payment processing service providers powered by the latest technology.

  1. They are able to safeguard their businesses against threats and risks: Cathy Bessant, the CTO of Bank of America said recently that the bank was spending over $ 1 billion annually on cyber defense in response to surging cyberattacks. Given the frequency of cyberattacks and frauds plaguing the banking industry, digital transformation can help safeguard banks against identified and emerging threats and other risks. With the right fraud detection systems and processes, data encryption mechanisms, and risk management strategies in place, banks can vastly reduce or even fully eliminate the chances of risk and fraud. 

By tightly integrating data silos, securing end-points, and leveraging systems that include Artificial Intelligence or Machine Learning elements, digitally transformed banks can protect themselves from external (and internal) data breaches. They can also increase the safety of transactions and the security of business and customer data. For instance, with a transparent system-wide view, banks can constantly monitor the IT network, flag hacking or phishing attempts, and react much quicker than would be possible otherwise – thus safeguarding the enterprise against cybercrime.

  1. They are able to deliver personalized and consistent customer experiences: Banks are addressing a new type of customer today. A recent report revealed that 75% of financial organizations had seen over half their customers switching over to digital transactions in the pandemic period. These digital customers expect a high level of personalization in the banking services they receive. Thankfully, digital transformation makes it easy for banks to deliver personalized and consistent customer experiences. Using technologies such as customer analytics, banks can monitor customers’ online and offline behavior, get better insight into their needs and preferences, and customize options and offers for every individual client – irrespective of what device they’re on, what channel they’re using, and where in the customer journey they are. 

By building and adjusting strategies for each customer, banks can improve CSAT scores while also boosting loyalty and ensuring high retention. For example, by monitoring customers’ browsing behavior, banks can curate personalized campaigns and offer products/services that fit their most current requirements.

  1. They are able to accelerate time-to-market: Digitally transformed banks also have the advantage of quicker time-to-market. Using technologies such as cloud and automation, banks can accelerate their product development process and meet customer requirements –before the competition. Agile methodologies can further help them in embracing an iterative approach to development and testing – so they can introduce feature changes and updates to the market more often, more quickly, and pave the way for long-term digital change in several incremental steps. 

Given the complexity of the technology involved, success in this area is often closely linked to having the right vendor partner to work with. A partner with the right technology skills and approach will help the bank move quickly with technology changes, bringing in flexibility, agility, and faster releases. All that ultimately benefits customers, cardholders, and the bank. 

For example, using a microservices-based architecture, banks can create a fully automated provisioning environment and leverage an agile structure to scale a new card product across the market. They can quickly build new customer portfolios and capabilities and derive significant tangible results.

  1. They are able to overcome operational inefficiencies: Digitally transformed banks are also better at improving the throughput of their processes while overcoming operational inefficiencies. Using automated workflows based on modern technology systems, banking staff can reduce the time spent on finding information while using embedded business rules and processes to complete tasks quickly. This can help them in handling more transactions with the same number of personnel – and in lesser time. 

For example, in the KYC process, automation can enable banks to accelerate the customer information verification and validation process and bring down the time from weeks to days – or even hours. Such automation can also ensure every piece of information – from credit history to social media profile – is properly verified, thus eliminating the chances of a bad decision for the banking institution. As it happens, this also helps drive a better customer experience!

Digital transformation in banking opens the doors to several new opportunities and benefits. When done right, banks can quickly respond to changing trends and regulations, safeguard themselves against threats and attacks, deliver personalized and highly consistent omnichannel experiences, accelerate time-to-market as well as overcome operational inefficiencies. Given the complexity of the tech landscape in banks, achieving digital transformation could come down to managing the complex interplay between systems. Contact us today to see how adopting a modern credit cards processing system can be a fundamental building block in that strategy.

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