Digitalisation has made a full scenario of opportunities for all businesses, creating a radical effect in numerous sectors, as on account of banking, which has been one of the first to start a significant procedure of digital transformation. Despite this, as indicated by Vector ITC, the Spanish digital and technological group, almost 40% of the main worldwide banking entities had not yet proposed a digital transformation strategy before the end of last year.
Digitalisation in the financial segment opens an entire world full of possibilities both for the organizations themselves and for consumers. Until recently, it was practically difficult to get credit online or for there to be banks that only carry out transactions through their mobile platforms. Today, the trend of digitalization is expanding. To such an extent that digital banking is expected to produce about $8.646 billion by 2025, with a Compound Annual Growth Rate (CAGR) of about 3.8% somewhere between of 2019 and 2025.
Benefits of digitization
The digital transformation is a procedure of consistent technological development, where organizations must be up to date in the tools accessible for the efficiency and improvement of procedures to accomplish greater profitability, for example, Big Data or Machine Learning. That is the reason it is important to decide the advantages of digitalization for banking institutions. These are some of the advantages:
User experience. The development of digitalization has empowered institutes to improve the client experience with a comprehensive and to improve omnichannel banking in its advancement towards a customer-centric model. This infers having analytical technological solutions for offer products and services custom fitted to customers. To do this, it is important to consider the knowledge of their purchasing behavior, preference and attitudes to risk and financial health.
Increase in the number of clients. Confronted with the loss of confidence by conventional banking and the growth in the utilization of banking applications and web online banking by consumers, financial institutions have lately expanded the number of customers. With the rise of Fintech in the sector, obviously banks should change the way they carry out their business to avoid losing customers.
Greater efficiency in process. With the usage of various cutting-edge technologies, for example, the creation of banking applications for the smartphone or electronic signature, banks intend to improve the effectiveness of their manual procedures. Along these lines, they look to lessen human errors in dealings with customers. As per a research done by Vector ITC, it is assessed that correcting this sort of error is usually between three and four time more costly than creating a digital procedure. Digitalisation in the procedures allows significant upgrades, since all the signatures and data are captured accurately the first time.
We are living in very dynamic times in which the presence of new technologies, for instance, Blockchain, Big Data, and Artificial Intelligence will drastically change the relationship between banks and their customers. In this sense, digitalization plays an important role, being the important lever to accomplish more productive internal procedures and to retain as many customers as possible. The financial entities that don’t adapt to these times, will have a great challenge ahead.