The digital transformation is well underway, asserting its effects across virtually every industry worldwide. Some, however, seem to feel the effects more heavily than others.
Emerging digital technologies continue to course through the financial services sector, and organizations are rallying to match increased competition and surging consumer demand for seamless customer experiences across a range of services.
Traditional models for products and services are giving way to entirely new offerings fueled by new digital capabilities and demand for greater ease of use and convenience—and this trend is only seeing its momentum build in 2020.
Below, we’ll cover a few of the significant digital transformation trends in financial services and what it indicates for organizations going forward.
Digital transformation initiatives are a top priority
The radically shifting financial services landscape has caused digital transformation efforts to be an absolute business imperative for organizations large and small, old, and young.
Virtually all (97%) of financial services firms report being at some stage of their digital transformation initiatives, whether it’s designing initial strategies or at varying stages of implementing them.
Regardless of how robust their current strategies may be, 21% of firms also report continuing to develop digital transformation strategies as their number one digital priority.
Emerging technologies and shifting customer demands play significant roles in these findings, but a rapid swell in new, determined competition is no small contributor.
Where once the space was dominated by a few giant institutions, today, financial services are beset with “thousands of new players, spanning all sizes, revenue ranges, and services.”
It’s critical for organizations to make informed, intentional steps to embrace and leverage digital transformation to keep pace with their peers.
One of the more prominent of the aforementioned customer-centric services emerging in financial services is the continued push towards mobile banking.
Today, customers aren’t concerned with how immaculate the carpet, how shiny the tile or the quality of treat dish on the counter at the bank is.
In this digital age, most people want all of their services (applying for loans, transferring funds, depositing checks, etc.) accessible from the comfort and familiarity of their smartphone.
As human contact trends towards becoming just a quaint memory from the past, organizations face cutthroat competition to offer more and more customer-centric service to the marketplace via mobile banking. And in this race, according to Forbes, the easiest app often wins.
Mirroring the rise of mobile banking, an increasing percentage of payments can be received via mobile pay as user experience, and on-demand convenience continues to be key areas of focus.
While this is far from breaking news, the growth of mobile payments year after year is noteworthy. Having already eclipsed $75 billion in 2016, mobile payments are expected to skyrocket to $500 billion by the end of this year.
With 30% of Americans already making zero purchases a week with cash, these figures are only expected to climb as organizations continue to innovate their services to meet the demand for contactless payments.
The financial services industry certainly isn’t starved for company when it comes to grappling with the demands of big data.
One of the byproducts of the digital transformation is an overwhelming amount of information at the disposal of organizations. Along with that data comes the pressing need to leverage advanced analytics, machine learning, AI, and cloud services to make actionable use of it.
By now, most companies have refined and optimized their processes to gather and store that data. But the answer to the question of how to best maximize the potential value and boost productivity, efficiency, profits, and customer-experience is less widely known.
For the foreseeable future, financial services firms will continue to need to invest more resources towards developing sound data analytic practices to discover new competitive advantages and drive new market opportunities.
The road that leads through digital transformation, while landmarked with incredible opportunity, can be a challenging one. While some firms may already well-positioned to quickly adapt to this phenomenon and deploy innovative strategies, many still need to devote major resources to upskill their employees and modify their traditional processes to compete in the digital world.
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