Digitalization became one of the top trends in 2021 driven by a push for digital transformation. It was an obvious step for every industry to transform digitally as the COVID-19 pandemic upended our routines. However,the transformation in the financial services industry was not a seamless process.
And yet, they have succeeded at it. But why digitization in BFSI?
Time and Money.
A consumer centric digital approach has been working for the banks. It has helped reduce transaction durations, and transformed moribund banks into consumer friendly entities. Mobile banking has proven to be a game changer. Transactions on net banking have revolutionized commerce and driven digitization.
Customer Retention
Digitization has eliminated several primary banking hassles. Gen Z and Millenials prefer on screen customer service for its ease of use, which further propels rapid digitization in the industry.
As a great chunk of consumer service has gone digital, customer retention has grown substantially. The cohesive pipeline created due to a digital experience allows customers to decide their experience enabling targeted marketing.
Several banks have gone a step further and introduced digital investment options also.
- For instance, Merril by Bank of America has introduced investment options which allows the user to invest their money within minutes without even stepping into their brick and mortar branches.
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Tech and BFSI
Technology-centricity is creating waves in the industry. Consumer behavior prediction, pattern recognition, fraud detection, risk management, and much more have been enabled on a greater scale as these technologies continue to empower financial organizations.
Analytics allow for customized and targeted marketing. This has substantially improved revenue generation. Moreover, several banks are integrating technology just to save time.
- For instance, lawyers and bankers at JP Morgan Chase & Co. used to spend an average of 360,000 hours on mundane financial tasks. An AI algorithm successfully completed the same task within minutes, which resulted in huge savings of time and money.
In a similar context, the introduction of chatbots and AI has been leveraged by several financial organizations such as JP Morgan. Herein, several processes such as account creation, deposits and withdrawals, loan processing, investments are done digitally.
Digital First Approach
Several financial organizations have become digital first by approach. This is not only to be resilient in the industry, but also to continue serving customers 24×7.
Such a scenario is a goal for many, and yet digitization requires high levels of consistency. The sheer amount of investment for such a transformation is staggering to say the least. Also, legislations, security issues, and stringent frameworks for data privacy are some of the challenges that impede the digital transformation efforts of the industry.
In such a situation, highly qualified bankers, skilled technicians, and consistent quality of service are going to prove detrimental to the organization’s success. Several pioneers of the industry have already paved the way. For several more to follow. Into the digital sphere.
Digitize For a Better Tomorrow.
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