#AI, #Banking, #blockchain, #DigitalTransformation, #Finance, #Fintech

Gone are the days when bankers had to deal with a huge pile of paperwork, and customers at banks had to wait in long queues to get a transaction done.

All thanks to technology, which has the potential to transform banking at an exponentially faster pace.

Currently, digital banking is offering extreme convenience, personalization, and security at our fingertips when it comes to managing our finances. Of course, the credit goes to mobile app development companies for building innovative banking apps, which allows us to do that.

To add fuel to the fire, emergence of Artificial Intelligence, Blockchain, and many other technologies are transforming banking to a higher level making it much more smarter, intuitive, and secure.

So, yes, technology can transform banking. But how?

This article will introduce key factors driving digital transformation in banking. But, before we look into those factors, let’s know what exactly is digital transformation in banking and why is it important.

What is Digital Transformation in Banking?

Digital transformation in banking is all about integrating new technologies and strategies that help streamline operations, optimize costs, improve security, and enhance customer experiences. Like other business sectors, the financial industry also needs to be more digitally focused to stay competitive and improve its revenue generation. Traditional banks and financial institutions need to upgrade their operations to meet the changing needs of customers who seek personalized and prompt banking experiences using their digital devices, like smartphones, laptops, iPads, and desktops.

Why is Digital Transformation in Banking Important?

In this current technological era, customers look for the convenience of getting their financial tasks done at their fingertips without having to compromise transparency and security. Financial institutions and banks would be able to fulfill changing customer demands only if they adopt new technologies and embrace digital transformation. Technology helps in collecting and analyzing data, which enables banks and financial institutions to understand customer behavior and design their products and services to align with their needs.

Transforming digitally is important for the banking sector, as it has become more relevant for them to evolve with the changing operating models and business environments. Also, to keep up with the increased usage of mobile apps and websites to perform transactions, it has become extremely significant for banks to embrace new technology and redefine the customer journey. Let’s now have a look at some key factors driving digital transformation in banking.

Key Factors Driving Digital Transformation in Banking

As per a recent study, 99% of Gen Z and 98% of millennials use a mobile banking application to perform different tasks like transferring money, viewing account balances, checking their credit score, and more. So, which are the key factors that are encouraging this increased usage of mobile banking? Let’s have a look at them.

Customer-Centric Approach

Technology enables banks to follow a customer-centric approach, which helps them provide convenience and personalization to their customers.

Modern Infrastructure

Banks use advanced technology to execute modern technology that helps them to improve internal operations and efficiency.

Informed Decision Making

Using technology banks can have access to accurate information and data analytics ability which leads to better decision making, innovation, and risk management.

Fraud Detection and Security

With the help of advanced technology, banks can now detect frauds before time, protect sensitive customer data, and enhance their security levels.

Regulations and Compliance

Banks require stringent compliance with regulations pertaining to the country within which they operate. Technology helps banks ensure that they comply with evolving regulatory standards.

Expansion and Globalization

Taking the digital-forward approach, banks can now make it possible to align with other sectors by partnering with several other startups and enterprises leading to expansion and globalization.

Hence, for a successful digital transformation to take place in banking technology is playing a major role. But, which are those technologies that can transform banking? Let’s have a look at emerging technologies that are contributing to the digital transformation in the banking and financial sectors.

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Technology Used in the Banking and Financial Sector

Banks and financial institutes are taking advantage of several emerging technologies to improve efficiency, productivity, and customer satisfaction. Below-mentioned are some of the most prominent technologies being used in modern banking and financial services in the current era.

Blockchain

Blockchain is one of the technologies most frequently discussed in banking and financial services these days. It is a digital ledger technology that has the ability to record transactions over a decentralized network. What is so unique about Blockchain? Well, the transactions recorded in the Blockchain network are immutable after they are verified and added to the chain. That means once the transaction is recorded and verified within the Blockchain network, it cannot be deleted or modified. This quality of blockchain helps create an extremely secure and transparent environment for banks and financial institutions, resulting in fraud prevention and flawless operations.

AI and Machine Learning

Artificial Intelligence and Machine Learning enable computers to learn from humans and perform human-like activities. For example, a chatbot on a banking app can help customers solve their queries 24/7 and 365 days a year. This helps banks to execute round-the-clock services and enhance their customer support. Also, AI & ML can be used in automating processes, analyzing data, preventing fraud, and delivering more personalized services to customers. There are several AI development companies providing solutions specifically for banks that have helped them to deliver enhanced services to their customers.

Internet of Things (IoT)

Internet of Things (IoT) is a technology that connects devices within a network using Bluetooth technology, and then those devices can exchange information with each other. IoT empowers banks by enabling them to collect and analyze data from connected devices and gain in-depth insights about operations, customer behavior, security, and personalized services. For example, by monitoring ATM usage, bank visits, and transaction patterns can help banks to gain real-time valuable data and design personalized financial products and services that delight their customers and win their trust.

Low Code Development

Having a mobile application is a necessity for every bank these days. Low-code development platforms enable banks to develop applications quickly as they require minimal coding. As low-code platforms include visual interfaces, drag-and-drop functionalities, and pre-built templates, it becomes easy for even beginner mobile app developers to build versatile banking apps and at the same time speed up the development process.

Robotic Process Automation

Robotic Process Automation (RPA) has gained a lot of momentum in banking sector as it allows automating repetitive manual processes, and enhancing operational efficiency. Several processes can be automated, like customer onboarding, compliance checks, data entry, and more. RPA integration in banking systems has benefitted in terms of improved productivity, and reduced errors.

Big Data

Modern banks are now also applying big data technology to fetch intuitive insights from customer behavior and patterns. By using the power of Big Data analytics, banks can better understand customer behavior and accordingly personalize their products and services. Additionally, they can make data-driven decisions to optimize operations, predict future unforeseen conditions, and eliminate risks.

Conclusion: Prioritizing Technology in Banking

Therefore, technology needs to be prioritized in banking as it can drive innovation, ensure regulatory compliance, and, above all, enhance customer experiences. Technology is reshaping the banking landscape and will continue to do so. Hence, it becomes imperative for banks to focus on key priorities, and that is investing in the right banking technology as that can help them stay ahead of the curve.

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How Technology Can Transform Banking?

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