Digital Transformation in Financial Services: Key Trends to Look Out For in 2023

The digital transformation of traditional banking allows for offering both traditional and many other asset management with a higher degree of security and flexibility. This improved asset management also enables banks to provide better rates, lower fees, and guaranteed payouts, enhancing the overall customer experience. Often digital transformation headlines are about internal benefits but, ultimately, companies need to consider how their efforts will transform the customer experience. How will the transformative changes made within the business impact the customer – better service?

Digital transformation creates an optimal work environment for employees, redistributing activities, accelerating collaboration and leading to greater well-being and productivity for each employee. Banks may be slow to embrace computing due to the significant investments required to digital financial transformation adopt and integrate new technology, regulatory and compliance concerns, and cultural resistance to change. Free and Paid Data Annotation Tools Comparison Discover the differences between commercial and open-source data annotation tools and choose the best one for your business.

Digital portfolio of products and services within an ecosystem of partners

This process implies multiple large and small changes that reshape the methods and technologies used in the financial area. Ranging from marketing and sales to finance and HR, every field of an organization possesses sensitive data. Hence it becomes essential to secure and optimize that data wherever it flows while keeping the working process easier for the team so that finishing a particular job can not be too complex and time-consuming. The emergence of social channels, shopping portals, and mobile banking applications has opened doors for banks and other businesses to reach out to their customers.

Such apps increase efficiency by automating many routine processes, such as documentation and calculations. Kandarp Shah has over 15+ years of experience with Microsoft technologies. He drives strategy and execution spanning all aspects of digital & cloud transformation initiatives. With his outstanding delivery management approach, Kandarp empowers customers with the development and deployment of Microsoft’s solutions and services. A proactive leader, he empowers his team to take ownership by grooming them into future leaders while building cohesive teams to achieve individual targets and company objectives.

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Study by Statista predicts 2.5 billion individuals to utilize online banking services by the year 2024. A few examples of digital banking transformation are online banking applications, data encryption software, virtual assistants, KYC system software, website optimization, etc. Their strategy towards 2025 is ‘Delivering excellence in a digital world’ bolstered by an investment of over $2 billion on digital transformation projects.

Processes, systems, culture, and workflow are part of all these operations. Each level and part of the organization is affected positively by bringing all the data together for more efficient decision-making and strategy implementation. Around 90% of the organizations are utilizing cloud technology to migrate data to it. Most of this migrated data is being utilized to replicate the existing business services in a digital form.

Invest in digital tools that enable collaboration

Automation is driving a shift in how banks manage their processes, allowing them to focus on customer service instead of back-office operations. Open banking , allows banks to give access and control over client banking transactions and financial data to other companies via APIs. Around 97% of companies that have already adopted open banking admit it has brought value to their business, namely improved customer service, client engagement, ability to deliver new services, and generation of new revenue streams. Digital banking is not only about online or mobile banking services, it is about the digitization of all banking levels, from the front-end to the back-end. This means that digital banks are the banks that manage to automate administrative tasks and data processing, as well as provide clients with a better digital experience. For example, they allow making account deposits and transfers remotely, enable people to apply for loans and access personalized money management services online.

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• The finance industry is undergoing a major digital transformation driven by the need for increased efficiency, agility, and competitiveness.
• Employees may avoid working in silos and concentrate on delivering excellent financial services and competitive client experiences by making information searchable, controllable, and easily accessible.
• NTConsult was involved in the entire digital transformation of the client.
• Advanced analytics is considered a future competency at the heart of how the business will be done across the value chain, taking the levels of automation even further.
• But why would a well-established financial firm such as JPMorgan Chase spend billions on tech?

AI has increasingly been applied to fraud prevention and detection in the financial services industry. Customer behavior is tracked in every transaction, producing data sets far too large for any human to analyze. But AI-powered fraud detection solutions can analyze large datasets quickly and accurately, making them much more effective than traditional fraud detection methods. A survey from Finder, the UK credit https://globalcloudteam.com/ agency, estimated that nearly 20% of people could switch to online-only bank accounts by 2027. The businesses in the financial services sector that don’t keep up with demand risk missing out on a significant part of the market. A large digital transformation project might include a complete overhaul of IT infrastructure, customer and employee management systems, and a whole raft of policies about data security.

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They will expect nothing less than real-time engagement when they need it. And they will not tolerate even the slightest possibility of a data breach. Nearly all of financial services firms are making some sort of inroads on digital transformation—whether they’re in the process of developing a strategy or already implementing one. More than a fifth list developing a digital transformation strategy as their top digital priority.

The importance of data in decision-making and data-driven marketing should not be underestimated. With the right leadership to encourage this attitude throughout an organization, the road to a higher ROI will become much easier. The end-to-end process automation, allowing the coexistence of the new system with the legacy ones. Digitally mature work culture, capable of accelerating results and using digital tools in a more efficient and integrated way. For all, to harness the full potential of connecting people and businesses together to build trusting relationships that can be the catalyst of worry-free collaboration and limitless innovation.

Enables Future Digital Growth

With these insights comes the power to optimize existing products and services, identify opportunities to increase market share, develop new pilot programs, and, of course, enhance the customer experience. According to a global survey of financial institutions, 85% of respondents said that they currently use some form of AI within their organization. And, according to a recent report, the predictive analytics market in banking is projected to reach $5.43 billion by 2026, with a CAGR of 20.8% from 2019 to 2026. When taken as a whole, these findings demonstrate the widespread adoption of both AI and advanced analytics within the financial services sector — a trend that continues to grow with each passing year. The importance of a digital transformation strategy cannot be understated.