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Exploring Digital Transformation in Banking – Definitions, Types, and Examples

Exploring Digital Transformation in Banking – Definitions, Types, and Examples

In a recent poll, 53% of banks and 69% of credit unions said that technology companies like Apple and Google would be their biggest competitors in 2020. These tech companies are branching into the financial world by making apps for their customers to make payments and banking. Digital transformation is how banks can keep up with these tech companies, keep their customers, and find and follow new ideas.

What does “digital transformation” mean?

Digital transformation replaces legacy systems and traditional methods with new digital technologies to automate manual chores, improve productivity, increase revenue, and give customers a better experience.

Partnering with domain experts in Digital Transformation like Maveric Systems powers banks to create an innovation capital that helps them leapfrog the competition.

Digital Transformation – Business Cases.

Digital channels bring in much revenue for Banks. Banks are transiting to new technology in that digital platforms give them new ways to follow up on leads and make more money. Boston Consulting Group thinks that by 2023, at least 30% of business banks’ income will come from digital. As more customers use digital apps and Internet banking, it becomes easier for banks to keep track of their habits. They can see what resources customers look up most often and send pop-up polls to learn more about users’ financial needs and why they use the technology. Based on this information, banks can offer each customer the best products.

Amping Agility: The financial services business is only sometimes known for being flexible, but it’s more important than ever to respond quickly to economic changes. A bank with a solid digital setup can respond rapidly to crises, like when it has to close branches, work with less staff, or reduce services that can be done in person. An excellent way to change from analog to digital would be to use a “phygital” model. Under this approach, banks would focus on and grow their digital services. The brick-and-mortar sites would stay open, but because the focus is on mobile and online banking, they would have less staff and could close quickly if needed.

People like mobile banking services better: Customers want digital banking options right now, so giving them what they want is the best way to stay competitive. The number of people using mobile and online banking has been going up regularly, but in the spring of 2020, demand went up even among people who used to prefer to bank in person. Deloitte says that people of all ages and countries use internet channels more than branches and ATMs.

Essential Aspects of Digital Transformation in Banking

Omnichannel banking: gives customers an integrated, seamless experience across multiple platforms, such as Internet banking, mobile apps, ATMs, and physical branches.

Personalization: Using data analytics, artificial intelligence (AI), and machine learning (ML) to make goods and services fit the needs and preferences of each customer.

Automation and Process Optimization: Using robotic process automation (RPA) and artificial intelligence (AI) to simplify internal processes, cut costs, and improve performance.

Advanced Security Measures: Using new cybersecurity solutions and methods to protect customer data, stop fraud, and ensure laws are followed.

Data-Driven Decision Making: Using big data analytics and advanced algorithms to make well-informed strategic choices, improve risk management, and drive innovation.

Collaboration with Fintech and Open Banking: Working with fintech startups and supporting genuine banking efforts to encourage innovation, improve customer experiences, and offer more services.

Conclusion

Today, the global age of digitization has changed because of a paradigm shift in technology. In this digital age, technology changes almost every business all the time. Technology has become essential to society and business, from automating jobs to digitizing services, from virtual teamwork to intelligent homes, and cloud computing to data analytics. The finance business is on the front lines of using the digitization power of technology to explore and come up with new ideas. It is also one field that has made the best use of digital technology. One of the most impressive digital changes in the finance business is how many people worldwide have switched from traditional banking to digital banking.

Digital transformation in banking is a significant change that will improve how banks and other financial institutions learn about their customers’ needs, connect with them, and meet them. More specifically, an effective digital transformation starts with knowing digital customer behavior, preferences, choices, likes, dislikes, and stated and unstated needs.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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Banking Digital Transformation – Facts, Advantages, and Trends

Banking Digital Transformation – Facts, Advantages, and Trends

We are in the middle of the fourth industrial revolution, which will bring machines and people together, break up traditional value chains, and build new business models. The fourth revolution’s growth steps are no longer straight but rather exponential. The process moves faster because mobile devices have a network or multiplier effect. Anyone can get any information or service in a concise amount of time. Big tech companies like Google, Apple, Facebook, and Amazon open their systems so millions can use them.

Partnering with domain experts in Banking Digital Transformation like Maveric Systems, banking institutions gain strategic advantage and a leg up in creating a culture of innovation.

Digital Transformation in Banks – Facts, Advantages, and Trends. 

  1. Robotic Process Automation: The main thing that makes up a bank’s operations is many standardized processes. Software robots can be used to make sure that all of the data is handled in the best way possible. Robotic Process Automation (RPA) is already used to hold many tasks. Costs will go down, and there will be fewer mistakes. Also, the amount of work people must do drops significantly, which means that the freed-up resources can be used for new, essential tasks. When PRA is used, processing costs can be cut by up to 70%. For instance, RPA can be used in customer service to solve customer problems quickly. Simple questions can be answered promptly and effectively. But this technology can also be used to follow the compliance rules. RPA can help improve efficiency and make sure that tasks are done right. Fraud prevention is becoming more and more critical, and business deals that are handled digitally can help. New technologies make theft easier, so an RPA can find possible fraud in a short amount of time.
  2. Big Data Analytics: Information is the gold of the 21st century, and Big Data can be used to collect and analyze this info. Financial companies have access to much information that has yet to be used. Over the next few years, the amount of data will also grow exponentially, so there are many reasons to use the data correctly. Simple customer connections can be used to find correlations, look at time series, and spot trends. Most importantly, companies can use their knowledge about their customers to their advantage. A better experience for the customer can also lead to new business possibilities. When you know more about your customers, you can also develop better services for them. Financial institutions can get a complete picture of what their customers want, which will be considered as they continue to work on their strategies. But Big Data can also improve internal processes and the customer experience.
  3. Cloud Computing: Cloud companies are getting more and more work from banks. Instead of spending much money on their own data centers, banks use other companies’ data centers. Clouds are perfect places to work together, especially with Fintechs. IT professionals think cloud computing will become more critical over the next few years. Experts in the field say that the technology is already in high demand and essential. Most of the time, the technology is used in mobile banking and payment services in the banking business. Other possible use cases include CRM (customer relationship management), trading, and evaluation methods.
  4. Crypto and Blockchains: In the news, a lot over the past few years have been cryptocurrencies like Bitcoin and Ethereum. Due to rapid price rises and speculation, these digital currencies got much attention. In this context, distributed ledger technology comes up a lot. This is the main idea behind the blockchain: the grouping of data records into arrays that refer to their predecessors and are sent to all network members. This technology has great potential for the business world and can help many areas, especially the banking industry.

Technologies for Transformation in Banking

Conclusion

Knowing how the financial industry changes is essential to prepare for the digital future. This will help you choose the right way to change and move in the right direction.  As part of the digital transformation of banking, modern ways of offering services are being used increasingly. The number of bank offices is decreasing, and many benefits, like lending and investing, are being moved online. Digital transformation is the only way for banks to move forward if they want to be stars in their field.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric Systems accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric Systems teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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Digital Banking: What Is It? Meaning, Examples, and Advantages

Digital Banking: What Is It? Meaning, Examples, and Advantages

Digital banking automates banking. Digital banking lets users access banking products and services online. Digital banking digitizes all banking processes and replaces the bank’s physical presence with an everlasting online presence, eliminating the need for customers to visit a branch.

Due to its unique characteristics and accessibility, digital banking is growing faster than online banking. Consumers prefer digital banking due to its extensive range of services. According to the Ipsos-Forbes Adviser US Weekly Consumer Confidence Survey, 76% of Americans have used their bank’s mobile app for account balance checks and cheque deposits.

Working with banking domain experts like Maveric for industry-first digital banking solutions is helping FIs consolidate their market positions and leverage their innovation pipeline.

The Upside of Digital Banking

Digital banking attempts to simplify bank customers’ lives. The benefits of using more advanced technology far outweigh the expenditures. The Digital banking benefits include:

  1. Digital banking allows people waiting in queues, busy working-class professionals, and regular customers who want to avoid visiting the bank’s branch to conduct a single task and want to do their banking from home.
  2. Digital banking offers 24-hour access to banking functions, adding to its convenience.
  3. Traditional banking relied too much on paper. Digital banking has eliminated paper. Users can check records anytime by logging in.
  4. Digital banking lets users automate power, gas, phone, and credit card payments. Customers no longer have to recall due dates. Customers can receive payment reminders and overdue notices.
  5. With well-integrated payment mechanisms, internet buying is easy. Internet banking boosted online payments.
  6. Remote digital banking is a step towards comprehensive growth. Rural people can benefit from digital banking with affordable smartphones and internet connections.
  7. Automatic bank transfers lessen counterfeit cash danger.
  8. Digital banking lets users report and block lost credit cards with a click. This enhances bank customers’ privacy and security.
  9. Digital banking promotes a cashless society and helps the government trace black money. Digital banking should reduce currency minting over time.

 

Growing Demand for Digital Banking

Digital Banking Vs. Online Banking

Digital Banking delivers all the physical banking services to the customer’s digital device. Cashless digital activities include Transferring money, Balance checks, Payments, and Account-checked investments. Digital banking offers fast, accurate, and smooth banking services. It provides multiple interface services using various technologies.

On the other hand, internet banking allows customers to access their accounts and make critical financial transactions online. Individuals can execute essential functions without visiting the bank. Digital banking’s subset uses different technology to support additional devices and interfaces.

Multichannel Customer Services via Digital Banking

Types of Digital Banks

  1. Neobanks: Neobanks are digital banks without physical locations. They approach customers via websites and phone apps. They offer specialist goods in limited markets and prioritize ease and accessibility over traditional banks. Neobanks, founded by fintech companies, may partner with conventional banks to deliver financial products or consumer assurance. Novel technologies improve the interface and banking experience, focusing on clients and experience.
  2. Challenger Banks: Challenger banks operate like Neobanks but with a twist. Notwithstanding their Neobank-like avatar, they are real. Challenger banks, unlike Neobanks, have a banking license and can offer more services.
  3. New Banks: Licensed Neobanks provide comprehensive banking services. For instance, Monzo, Revolut, and Starling Bank. These are online only.

Types of Digital Banking Payments

  1. Mobile banking apps:
  2. Internet payments: Transfers, deposits, echecks, and wires.
  3. Mobile wallets (e-wallets): Apple Pay, Google Pay, and others are popular.
  4. Contactless payments: They use debit and credit cards, digital wallets, and NFC technology.
  5. Cryptocurrencies use distributed ledger technology to facilitate safe digital transactions.

Conclusion

Digital Banking digitizes and automates all banking processes online. Digital Banking lets users deposit money, check accounts, handle loans, pay payments, etc. Digital banking covers customer actions and back-end operations, unlike online banking. Digital banks’ ease, comfort, and simplicity are attracting more consumers. As digital banks attract more customers through customer-centricity and tailored services, they also contribute to the cashless economy in force due to government and industry regulatory restrictions.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric Systems accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric Systems teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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Banking’s Digital Transformation: Benefits And Drawbacks

Banking’s Digital Transformation: Benefits And Drawbacks

After the pandemic, banks must speed up their digital transitions. Banks, however, will need to revise their front- and back-office business models to keep up with the changes and head off any potential upheavals that may lie ahead. True digital banking and a complete transformation depend on cutting-edge technologies like blockchain, cloud computing, and the Internet of Things.

The customer obsession will continue.

The customer is the focal point of any effective transformation plan. Financial organizations need to optimize their big data to automate business processes and cut expenses as a result of interest rates close to 0%, banking fees reducing drastically, and rising customer expectations. Banks can speed up the creation of omnichannel products, services, and functionality by upgrading their applications using AI, the cloud, and automation. Because of this, the user experience is enhanced, and trust and loyalty are strengthened. Maveric Systems can guide you through a successful digital transformation.

What is banking digital transformation all about?

The term “digital transformation” refers to modernizing a bank’s infrastructure and procedures to serve customers in the digital era better. The use of digital channels for communication with customers, automation of routine tasks, and analytics for gaining a deeper understanding of customer behavior are all examples.

Banking's Digital Transformation: Benefits And Drawbacks

Advantages of Banking Digital Transformation

The modern banking customer can reap many benefits from switching to digital banking.

1. You can use the bank whenever you want: The ability to access your bank account whenever you like is a significant perk of digital banking. The ability to make deposits, see account statements, modify account information, and conduct other financial transactions is available 24/7, not just during regular business hours.

2. More affordable interest rates and charges: Maintenance and transaction fees are typical methods by which banks recoup costs associated with personnel, infrastructure, etc. The convenience of online banking has led to a decline in the need for full-time bank staff and a proliferation of physical bank locations. In light of these reduced costs, banks fully embracing the digital revolution are better positioned to provide their consumers with better rates and fees.

3. Upgraded satisfaction levels among paying customers: Digital-first banks consistently outperform traditional banks in several metrics important to clients, such as ease of use, speed of transactions, and satisfaction with the banking experience. When opposed to using a brick-and-mortar bank, banking digitally is much simpler. Using a digital bank, for instance, only takes a few minutes on a mobile device or computer.

4. Invoice processing systems: Automating your payments is a breeze with digital banks. You can automate the withdrawal of money from your account every month to pay for your regular expenses, eliminating the need to remember to pay them on time each month and risking late payment fees and penalties. You can also streamline your cash flow management by automating vendor payments using a net-30 account.

Disadvantages of Digital Banking Systems

The benefits of digital transformation in banking, such as increased efficiency and streamlined processes, are not without drawbacks.

1. Fears about Safety: Online banking may be more convenient but poses security hazards. There are security gaps that bad actors can use to steal your money, thanks to the internet features that let you access your account and transact remotely. These days, online banking faces numerous cybersecurity threats. In the case of internet banking, for instance, hackers could gain unauthorized access and obtain highly personal information. Malware and ransomware assaults, spoofing, credential harvesting, identity theft, fraud, etc., are some more concerns.

2. Problems with technology may arise. There is some doubt over the dependability of the electronic systems on which online banking relies. Even if the odds of being affected by a technological glitch are low, being unable to access your funds when you need them most can be a significant inconvenience. For instance, if a server outage at your online bank, you could be locked out of your account.

Conclusion

Companies and service providers must increasingly digitize their processes to keep up with the times in a more digital environment. This is especially important in the financial sector, where more and more customers are doing business via mobile devices and the Internet. As a result, financial institutions are racing to implement digital transformation strategies to help them compete and thrive in the modern digital environment.

About Maveric Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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Digital transformation in Banking and Financial Services – Measuring up to the New Frontier.

Digital transformation in Banking and Financial Services – Measuring up to the New Frontier.

As customers demand more online access, the availability of new technology capabilities (and their reducing costs) such as data analytics, the cloud, artificial intelligence, and a collaborative regulatory framework, banks have increased their investments in digital capabilities in the last five years. While the Pandemic has accelerated digital adoption, what have the investments yielded? Are they changing the very nature of banking? And what will it take for legacy FIs to transform their operations and deliver unprecedented consumer value?

These questions drive deep into the heart of Digital Experience Engineering – a niche practice that Banking Tech partner, Maveric Systems, pursues through its rich consulting engagements.

Banking on Digitalization?

Three indispensable pillars for Digital Transformation Journeys

Reimagining customer journeys – From growing emphasis on client centricity, deep tech possibilities, and end-to-end process optimization, the primary focus of any transformation must always be the customer. In a world of fast e-commerce and hyper-personalization, clients have less patience for untransparent and cumbersome processes. To be able to reimagine, Banks must digitize the entire customer journey and then adapt. From streamlining and distilling customer onboarding and other essential functions, banks will, in a short time, gain customer loyalty.

Driving through the power of data – Client targeting, increasing wallet and mindshare, boosting customer loyalty, pre-empting, and customer abandonment are some of the use cases that data analytics brings for digitally-savvy FIs. Unlocking data is crucial to amping up competitive vigor in multiple ways. It makes the data-powered banks act as partners to their clients by advising them of relevant offerings and matching needs even before they are acutely felt. Moreover, today, the power of data decides how FIs will capitalize on their ecosystem partnerships, add to their market segments and product portfolios, nail the GTM approaches, and finally, differentiate on their client’s user experience.

Powered by humans and enabled by technology- Scalable real-time event-driven digital banking platforms are a powerful way for banks to act on the insights their data informs them about a customer’s context and life situation. Two underlying drivers make this scenario possible – a future-focused operating model and the creation of a digitally driven organization. The operating model is indispensable to cost-effectively deliver products and services across channels and capitalizing on emerging deep tech possibilities. The second driver – the organization’s digital culture – is decided by leadership engagement, embracing an agile working philosophy, and infusing change management into the daily rhythms.

With the digital transformation pillars in place, the next logical question is: how will the new frontier be measured?

With the Pandemic behind us and the rising economic volatility, the top banking leaders continue focusing on three top transformational priorities.

Client and customer satisfaction: Mobile banking has already surpassed all other banking channels in popularity, as almost one-quarter of bank customers now cite mobile apps as their preferred method for banking activities.

Regulatory Compliance and controls: The sector’s regulatory framework is frequently an impediment to digital acceleration, so banks are turning to cloud-based platforms with flexible reporting capabilities that can adapt to ever-changing compliance standards. These platforms can give a more comprehensive set of data that helps banks comply with ever-changing rules and respond to audit requests swiftly and effectively.

Operational Resilience: As banks struggle to negotiate the volatility caused by health and humanitarian crises, social inequality, and climate risk, a comprehensive and effective environmental, social, and governance (ESG) approach is required. Additionally, banks are adopting technologies that can assist them in analyzing the environment and predicting potential consequences using predictive analytics.

Conclusion

Digital transformation in the banking industry has direct benefits. From addressing the unique needs of new products and revenue streams, keeping pace with multi-generational consumer demands, and improving profitability – all depend on the operating and business models that FIs choose and execute.

While there would be matters of culture, leadership, and regulatory landscape that would determine the transformation strategy and digital approaches, in the long run, successful banking projects must integrate consumer, digital technology, and data analysis that creates new value to the customer experience. Additionally, banks will profit from adopting an ecosystem-based strategy.

About Maveric-Systems

Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.

Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.

With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.

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