To prosper where competition is fierce, regulations are changing, and technology has an increasing role to play, and banks are prioritizing innovation.
FREMONT, CA: The global banking industry is becoming both technologically advanced and strategically focused to respond to the rising customer demand. While trying to remain competitive, a great deal of emphasis is placed on digitizing banking processes with the help of innovative technologies. This transformation illustrates the desire to become a digital bank. Following are top trends that are accelerating the race of banks towards their digital future.
• Accelerating Focus on Digital Transformation
The banking industry is witnessing a focus on digitization and the adoption of technologies to bring in operational efficiencies, improve speed-to-market, and ultimately deliver superior customer experiences. Banks increasingly capitalizing om self-service digital channels like mobile and online banking are becoming more popular among a tech-savvy generation of customers. Besides, wearable devices and power of smartphones, are also making it increasingly feasible for banks to offer targeted services to their customers.
• Growth of Fintech Companies
Majority banks are seeking to exploit the opportunities presented by digital by harnessing technologies that they have or by partnering with FinTech companies. Previously, FinTechs were considered competitors for banks taking advantage of the industry's inability to keep up with technological breakthroughs. But today, bank-FinTech partnerships are increasingly the norm, enabling banks to offer tech-enabled banking products.
• Re-thinking the Concept of Money
Technologies are questioning the traditional economic value offered by the banking industry and are heralding a quiet revolution. Among that, blockchain is shaking up the foundations of traditional business models with peer-to-peer lending, smart contracts, and digital payments, eliminating intermediaries and speeding up processes. In addition to blockchain, cryptocurrencies such as Bitcoin, Ethereum, and Ripple are slowly gaining momentum and is questioning the need for liquid cash. In this context, where assets that were once considered core are no more so, and controls that once served to protect are themselves giving rise to new regulations the industry appears striving for a rebirth.
To be successful in the long run, banks must support innovations that will impact increasingly outdated business models. They must also anticipate innovating in ways that will prioritize the effective mix of capabilities, processes, and people.