Digital transformation in the financial services industry was merely a concept that has now become a part of a successful business strategy.
The impact of digital technology, digital transformation, and automation has led people to opportunities for cost-effective operations, fast actions, meeting work deadlines, improved customer and employee experience and standing out among your rivals.
Digital technology assists in compliance management, financial management, and accounting whilst minimizing human errors, manual errors, and risk involved in the financial industry by introducing robust digital strategies.
Digital transformation, also known as DT, has made a significant impact on the financial services and industry. Consequently, digital technology has now become a strategy for business growth. According to Smart Insights, 34% of the companies have already undergone digital transformation. Moreover, 54% of CEOs have stated that digital technology has increased the company’s revenue growth.
The best example to see its positive impact is to observe how far modern or online banking has come. Digital strategies have given the benefit to everyone through great and convenient experiences.
Through mobile apps, digital technology has enabled us to choose from various options according to our convenience.
2018 was the year of digital transformation in the financial industry. Digital technology has changed some trends in financial services.
Some of them are listed below:
Organizational agility refers to an organization’s effective response to disturbance and disruption in the financial services from the previous economic crisis.
Firms and businesses are looking for ways to improve the financial innovation and support the latest innovative ideas related to financial services but only through efficient means.
Many industries now emphasize on working with collaboration and communication for the adoption of team structure as a business’s operational model.
However, you must do this according to the standards and the regulations of the financial industry.
Digital transformation in financial services has improved compliance management. Many firms that collect large volumes of data for analysis and storage benefit from the digital strategies implied on financial services.
As digital strategies are implying on financial services, it could also mean an end to the traditional banking and financial services.
Fintech is a broad term that defines the use of digital applications, software, and digital technology by finance organizations and banks in their systems.
Currently, fintech has evolved from traditional ATM machines and credit cards to blockchain technology and digital banking services.
With ever-changing digital technology, fintech has managed to change the whole world of banking and finance.
Digital technologies such as chatbots, expenditure tracking, and online budgeting tools are moving the financial services into the modern era.
At least 52% of the companies were involved with fintech digital solutions from the year 2016 to the year 2018.
Not long ago, people used to open bank accounts and were offered several incentives as tangible products.
But digital transformation has changed the financial services so that consumers can be given more than just a mobile banking app or a credit card to pay their bills.
Digital technology is not limited to online accounts. There are digital banks for consumers who even have no conventional branches. Digital strategies and mobility, both have questioned the need for conventional banks in this digital age.
Digital innovations in the finance industry are disrupting existing innovations. Fintech has various arrays of automated and digital disruptors which include smart payment technologies. One such example is Apple Pay.
There are other digital strategies in existence as well that are moving the transactions to a digital platform.
( Also Read: What is IT Transformation? )
Machine Learning and Artificial Intelligence
Thanks to digital transformation, banks can now identify theft and fraudulent activities by using complex prediction patterns. Machine learning in integration with artificial intelligence is becoming common and practical for the benefit of the consumers.
However, these digital strategies are not only used for detecting fraudulent activities they give better insights for investment, customer behavior, and also improve the compliance management system.
Cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin are offering consumers cheaper and faster ways to carry out online transactions and bill payments. Ledger system of blockchain technology uses a strict data control system allowing for auditable data and smart contracts.
By building online trust, it not only minimizes the risk but also the manual errors. In fact, blockchain technology is considered as the most impressive technology in the transformative digital world.
Without denial, digital technology has brought about a change in the financial services and finance industry. The digital revolution is creating new technologies at a rapid rate, which is not only transforming the finance industry but other industries as well.