From disruptive fintech startups to cunning ransomware attacks, the financial services landscape is more complex than ever. In such a turbulent industry, to remain resilient, keeping up with emerging trends in tech, business and customer behavior is critical. That being said, the digital era has proved to be an era of reckoning for large financial institutions that have historically relied on legacy IT systems and in-person banking experiences.
The COVID-19 disruption has forced businesses to digitalize quickly to streamline touchless transactions and improve online customer support. In fact, Wells Fargo reports that there has been a 35 percent increase in remote check deposits and a 50 percent growth in online wore transfers since the start of the pandemic. Yet, tech laggards in the finance sector still have a long way to go. As these organizations scramble to adopt emerging technologies to optimize efficiency, accelerate growth and deliver superior customer experience, many face roadblocks establishing a strategy that’s tailored to their unique needs.
To successfully streamline the transition to digital-first business models and alleviate operational setbacks within each financial institution, it’s vital to understand how the pandemic reshaped the demand for transformation.
Digital transformation in Finance…Reimagined
The need for digitalization in the finance industry was already more urgent than ever pre-Covid. Therefore, when COVID-19 proved to be a full-scale disruption to traditional business models, operations and ecosystems, financial organizations were pressured to bring digital initiatives to scale. A streamlined, online operational approach became a non-negotiable for most industries, especially banking and financial services. Take, for example, the rapid transition to contactless and self-service operations. These organizations were tasked with making banking interactions more safe and accessible for everyone, and these adaptations proved critical to their landscape today and driving customer success.
The shift to more customer-centric business strategies requires large financial institutions to reimagine historic banking tactics. Rather than being laser-focused on driving efficient operations and growing revenue only, businesses have been challenged to meet the ever-evolving demands of the modern customer and prioritize personalization.
Traditional financial institutions now face serious competition from new virtual banks and other fintech companies that are redefining the type and range of services to their customers. These new entrants are highly competitive, agile and very digital savvy. Their approach often includes the creation and orchestration of new ecosystems that provide end customers with a single platform to access a wide range of traditional and non-traditional services.
Adopting the Customer-First Approach
Customers have become the epicenter of the banking experience, which has only further driven innovation of digital solutions – making them more personable and humanistic along the way. To ensure successful implementation, financial service providers will continuously need to capture customer insights to understand what they want and how they want it. This solidifies the human experience as the most impactful component of banking operations in this reimagined digital era.
The future of financial services will lean heavily on consumer and end-user data, harnessing every pre-existing nuance to provide an outstanding customer experience.
Key Considerations to Protect Customer Data and Maintain Trust
Institutions that successfully accelerated digital transformation initiatives were those that leveraged their employees. With the power of cutting-edge automation tools, financial institutions could better equip their employees with solutions that streamline operations and marginalize error as these remote workers performed menial, repetitive tasks, such as reviewing disputes and processing payments. Customers, employees and institutions mutually benefitted from these tools as they dramatically reduced human error and achieved faster resolution times.
Additionally, financial institutions demonstrated notable improvements in security and compliance by equipping employees with technology that minimizes direct human intervention and powers process automation. As the demand for digital transformation continued to explode in the industry, fintech companies that provide these automation solutions emerged as essential players in the financial landscape.
Conclusion: Transformational Change is Still on the Horizon for Financiers
Since 2020 alone, over 90 percent of financial providers have doubled the pace of transformation. This statistic reflects something many forward-thinking executives already know: companies must move quickly to accommodate the growing demands of customers, navigate emerging threats and surpass the competition. However, increased speed does not mean these organizations will reach some fictional “digital destination” before their industry peers. Digital transformation is an ongoing journey with no end state. Financial organizations will continue to face new challenges and setbacks throughout this journey. Luckily, the road ahead is also paved with opportunities to continuously evolve their business models and define a more intuitive, personalized era for finance and digital technology.
This article was originally published on Tr3Dent CEO and founder Kevin McCaffrey’s LinkedIn. Please find the article here: