3 Issues Holding Back Banks from Digitally Transforming

Banking CIO Outlook | Monday, August 24, 2020

Today, the technological potentials are more flexible, secure, and compliant than, and with the right approach and the right technology, a complete digital transformation can be achieved sooner than expected.

Fremont, CA: Although there is a growing customer demand for digital services, banks still have not fully digitalized. The concern for compliance, organizational resistance, scalability issues, and limitations of legacy IT systems restrict banks from fully embracing the digital transformation.

Here are three problems that are holding back banks from digitalizing:

Organizational Resistance

Banking executives often face resistance when trying to introduce innovative technologies. Executives fight for the budget for their initiatives and do not see the pressing need for digitizing while managers are swamped with other responsibilities. Front-line employees are used to the traditional systems and are concerned about learning new technology and security fears about data breaches.

Top 10 Digital Banking Solution Companies in Middle East - 2020Therefore, a multifaceted approach is needed to gain their support.

Scalability Issues

Most banks wrestle with challenges of scalability and increased workload when adopting new technologies, which makes it hard for them to obtain the required effectiveness from the specific technology and might lead to resistance to adopting new technologies later.

IT and banking professionals must understand the needs, limits, and opportunities, allowing for discussions with technology providers to make sure that the technology can scale as systems grow. The technological solution should also be able to promote scalabilities like chatbots, automated fraud detection, voice assistants, eForms, and eSignatures.

Compliance Concerns

Most banks still need customers to come to a physical bank to take out a loan or open new accounts, which alleviates the risk of fraud and keeps banks compliant with traditional methods. For banks tasked with guaranteeing top-level compliance, digitizing specific processes feels risky as there are, for instance, substantial fines for an anti-money laundering infraction.

However, most technologies like patch management tools, auditing, and ID verification are fully compliant with the highest regulatory standards or help support compliance. It can automate and improve all of these procedures as long as the technology fits with existing procedures.

See also: Top Banking Tech Solution Companies

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