Ebenezer Asumang on the Future of Banking: COVID-19`s footprints in digital transformation

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“When the digital transformation is done right, it`s like a caterpillar turning into a butterfly, but when done wrong, all you have really is a fast caterpillar.” —-George Westerman, Principal Research Scientist with MIT Sloan Initiative on the Digital Economy.

The novel coronavirus pandemic takes every sphere of human activity into the next level. Financial institutions are forced to move quickly to protect their employees, transform their operations, and serve customers in new, improved ways. The future of digital banking transformation is impressive, and it is predicted to entirely change the image of traditional banks, as well as bring more services to the customers. The rise of digital solutions in banking can result in increased data transparency, elimination of intermediates in the process, and alternative methods to access financial and intellectual data. All this can result in lower pricing on the operations and make transactions easier and faster.

As the COVID-19 continues to spread around the world, more and more organizations will miss their financial targets because of strategic and operational disruptions and dampened customer demand. It’s also unclear how long the pandemic will last. But one sure thing is here, this will not be a short-term event with fewer consequences. Industries, such as banking, should prepare for the long haul. However, the software revolution which has already disrupted many industries and has made some industries essentially obsolete is still rapidly transforming the financial services industry. Digital transformation in banking has already started, although the process in this sphere is quite slow.

To begin a journey to digital transformation, institutions have to develop a detailed strategy to change their distribution model, revise and enhance value offers, as well as develop end-to-end customer-centered processes that can result in growth and customer satisfaction. Among the trending solutions are:

Artificial Intelligence – AI in banking is represented by chatbots or online assistants that help customers with their issues by providing necessary information or executing different transactions. Apart from this, AI can be used for the purpose of data analysis and security. For instance, identify money laundering by analyzing customer data within several seconds.

Internet Of Things – IoT is helpful with real-time data analysis, thus makes the customer experience more personal, and banks are able to provide individually-tailored offers. What is more, thanks to wearables, customers can easily and seamlessly make contactless payments. Apart from this, IoT is helpful with risk management and access to platforms; the authentication process can be supported by biometric sensors that make access more secure and protected.

Blockchain – The implementation of blockchain in banking can result in a better interface, more accuracy, and secured data and transactions. In addition, blockchain solutions will make transactions and different operations transparent, facilitating collaboration. There will be no need for the intermediation of the third parties, thus bringing up the level of trust from the customers. It can also influence cloud technologies and move to decentralized ones, which will result in higher protection of the data and funds.

Cloud Computing – Cloud computing is another technology that can help banks become more efficient and gives them a chance to provide more innovations, as well as have better productivity, improve operations, and instantaneously deliver products and services. Cloud computing, as well as IoT, can help with risk management and create a secure environment for the customers and internal bank systems.

All in all, the digital transformation of the banking field will bring great innovations that will change the image of banks we know nowadays. Technologies bring numerous opportunities both for banks and their customers by securing personal data, increasing transparency, and giving a chance to manage funds anytime and anywhere. These tools can automate numerous manual operations, thus enhance customer satisfaction

Digital transformation is already showing great benefits to institutions that have embraced it but like all man-made products and services, it has some disadvantages also, albeit at minimal level.

  1. 24/7 Service

Online banking services are available 24/7 all year round, even at the weekends. There is no need to stay in lines and wait for the bank to open in order to conduct certain operations. It’s a huge advantage that comes with digital solutions.

  1. Convenience

Personal and company bank accounts are available on any device, all you need are an Internet connection and a few taps on the screen. This brings more customer satisfaction as they are able to constantly keep track of their account balance and manage the information on their personal profile (add new mailing address, e-mails, telephone numbers, etc.). In addition to this, there is no need to go to the bank to get cheques as they can be instantly sent to your email address.

  1. Automated Transfers

Direct banks can provide unlimited automated transfers (accept payroll deposits or provide automatic bill payment) with no additional fees for the services even to outside financial institutions.

  1. Time-Saving

Another advantage, you save a lot of time as you have access to the account from home. It is extremely convenient as previously you could waste an hour or two at the bank to make simple operations, and now it is done seamlessly from home or any other place where there is an Internet connection.

  1. Easier Management

Online accounts can be easily managed, although they require more information than traditional banks. Customers can add information themselves or directly contact online assistants to provide support on the current issue. What is more, payee information is retained within the system, there is no need to re-enter data for the following payments, etc.

  1. Security Issues

Cybersecurity is one of the most important issues that companies and institutions are struggling to overcome. Even sophisticated software that protects tentative data cannot completely protect accounts from scammers, phishing, hacker attacks, etc.

  1. Transactions

Complex transactions may also require the presence at the bank office. Also, international transactions are not possible with all digital banks.

  1. Services

Nowadays, not all banks can offer a wide range of online services. Still, there are some that require your presence at the traditional banks.

Banks possess a lot of important data that can be used as a background for new innovative solutions and services that can satisfy customers to the full. The number of disadvantages is rather low, and it’s only a matter of time for them to disappear. Advantages take over disadvantages and make daily operations much easier, reduce costs, save customer’s time, and manage to provide services efficiently.

>>>The writer worked in mainstream Banking & NBFIs. He is a Google Certified Digital Marketer, an Author and a Chartered member of the CGIA Institute, USA. www.ebenezerasumang.com /[email protected]/0242339145

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