Advancements in digital technology have fueled digital transformations in the financial industry. Banks and other financial institutions must keep up to remain competitive and meet customer's needs. There’s no single way to go about a transformation with digital technology in banking. Every institution has a budget, timeline, and other factors that impact its implementation. Here are some of those factors, as well as how to carry out a successful digital transformation while addressing challenges along the way.
Is There A Need For A Digital Transformation In Banking?
Customers often drive the need for digital transformation in financial services. Nowadays, with digital tools being a part of our everyday lives, banking technology must evolve. When banks are open to incorporating more technology, they can gain a competitive market edge and enhance the customer experience at the same time.
According to a survey conducted by PYMNTS, 45% of consumers are either very or extremely interested in digital-only banking services. In the same survey, only 27% of US consumers currently have bank accounts with institutions that have an online-only presence. The ease of banking online is attractive, but many consumers still want a physical banking experience to fall back on as well.
How To Ensure A Successful Digital Implementation
Implementing digital technology in banking doesn’t happen overnight. It requires careful thought and consideration, as well as an evaluation of consumer behaviors and preferences. For implementation, your team must have:
- A clear vision
- A detailed strategy
- Team cooperation
- Effective communication
Leaders at every level of your institution must be committed to digital transformation. If more experience is necessary specifically for the transformation, then it’s worth pursuing. According to a study by McKinsey, almost 70% of people indicate the leadership in their organization changed during their digital transformation. This doesn’t necessarily mean leaders resigned, but more could have been added to make the transformation more successful.
Implementing Your Banking Transformation Timely & Cost-Effectively
Banks can’t afford to experience downtime. So adopting a detailed digital transformation strategy is essential. It starts with conducting thorough research and selecting the right digital solutions that align with business goals. Then a well-defined project management framework must be established. Advanced training of employees should also be a priority to ensure they have the skills and ability to leverage the new technology.
Developing a culture of learning in your organization can help training programs succeed. According to a Harvard Business Review survey, 92% of people mentioned curious people who bring new ideas and curiosity to the table can help teams be more satisfied with their jobs and be more motivated to learn new things.
How To Mitigate Challenges During Your Digital Transformation
When upgrading digital technology in banking, chances are there will be some unexpected challenges that pop up. These challenges can include:
- Data security concerns
- Legacy system integration issues
- Regulatory compliance
- Customer adoption
Mitigating these challenges means having open lines of communication with employees and developing clear, user-friendly solutions.
The Future of Digital Technology in Banking is Bright
If recent trends and emerging technology are an indication, the future of digital technology in banking is very promising. Cloud computing, artificial intelligence, blockchain, and open banking are some of the top trends that look to shape the industry in the future.
According to an article by NTConsult, referring to a study by Boston Consulting Group, banks are saving 30% and achieving 20% higher revenue after only the first phase of their digital transformation has been completed.
Several years ago making a digital transformation was an option all banks had. Now it is a necessity to ensure your bank keeps up with the competition. Go-Live Faster helps banks adopt new technology on time while staying within their budgets. If you’re ready to learn more about our services, contact us to schedule a consultation.