Driven out of Necessity, Digitization Strengthens in Financial Sector

Banking CIO Outlook | Monday, June 24, 2019

Digitalization in the financial sector is born out of changing consumer demands and the threat from competitors. Now the industry is changing, unlike other areas, it is changing fast and has been for quite some time.  

FREMONT, CA: Being the most regulated financial sector follows a formal structure by strictly adhering to the rules and compliance. Along with that, it faces a significant challenge towards maintaining security by keeping customer experience and satisfaction a top priority. Technology can provide solutions to many of the potential problems, which the financial industry is dealing with.  Technology not only aids in giving a competitive advantage to financial firms but also ensures superior customer services that matter the most. Present day consumers are ready for a higher level of digital engagement from their banks as they regularly interact with the digital channels. The banks should consider this as an opportunity to improve their digital offerings and thereby increase customer engagement.

Present day millennials are the largest segment of smartphone users. Approximately 92% of them use smartphones according to surveys, which allows them to appreciate the ease and efficiency of mobile apps when it comes to daily activities. This new generation from 18-35 years would be an ideal target audience for digital transformation efforts like a mobile wallet or a digital bank apart from the older customer base. Digital transformation allows banks to offer customized alerts to customers based on their spending, which is a proactive approach to ensure client satisfaction and engagement.

Resolving problems and addressing queries has never been more comfortable with the digital revolution. In case of any fraudulent or suspicious practices, technology has made it possible for any transaction to be frozen or verified through mobile applications. Also, techniques like biometric passwords and PINs offers a higher level of security for online transactions

It is high time for the banks to tackle this challenge head-on or risk becoming mere, a back-office utility. Bank's conventional operations are on the verge of change, and the customer demands are evolving faster. Hence, the speed for technological innovation also needs to hasten.  

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