If you’re seeking to understand all about a digital transformation in the banking sector, like many others, then reading this blog is the perfect starting point.
Here’s all you need to know about a digital transformation in the banking industry, its future, its need & importance.
You can also catch insights on the benefits of digital transformation in the banking sector, and how you can successfully bring about digital transformation in banking.
Recommendation: Get yourself and your employees registered for this Free Masterclass on Digital Marketing Basics to start inculcating the adoption of digitalization.
So let’s get started with understanding what a digital transformation is for the unversed.
What is a Digital Transformation?
A digital transformation is the up-gradation of existing processes or introduction of new ways of carrying out business activities using digital technologies that enhance a customer’s experience and leads to higher conversion rates for the company.
Digital transformation means redefining business processes in this new digital era. The four main areas of digital transformation are process, technology, data, and organizational change. Whereas the 3 main components of digital transformation are rebuilding the operations, rebuilding relations with customers, and rebuilding procedures.
What does a Digital Transformation in Banking Industry look like?
To keep it simple, it is the integration of digitalization into every area of banking. This integration leads to fundamental changes in how the financial institutes operate and deliver value to its’ customers.
Examples of a digital transformation in banking are online banking applications, Fraud detection systems, virtual assistants, Website Optimization, Email Marketing, Data encryption, KYC software, and more.
Future of Digital Transformation in Banking Sector in India
According to Economic Times, the pandemic has completely reshaped the way people execute things in their life, right from shopping & working to banking specifically. Many evolutionary changes are expected to come in the future of digital banking.
Some consumers will expect completely autonomous banking processes due to lack of time and knowledge whereas a few will still vouch for high-level involvement. Thus, the future shows banking sectors to be highly adaptive.
As stated by Deloitte, the future of digital banking is placing customers at the center of every digital strategy and banks must instrument these from today to be able to seamlessly integrate by the year 2030.
Few years down the line, banks will have to profile their consumers very carefully and closely to be able to meet the regulatory requirements as well as offer extra services which are valuable to the consumers.
Data-driven solutions have already caught the attention and are the future of banking. The use of AI, AR, distributed ledger technology, and automation will further personalize the process of banking.
To conclude, the future of banking is filled with digital transformation in almost every vertical, and
the sooner the adaptation is implemented, the better banks will be able to compete.
Pst, stick to the end to understand how you can bring digital transformation in the banking & financial sector.
Must Check Out: Scope of Digital Marketing in India 2021
Need & Importance of Digital Transformation in Banking Sector
Digital transformation in the banking sector has fundamentally changed how banks operate and how they service their customers. And as we saw earlier, it’s going to further change and become more and more personalized with time.
Traditional banking systems are for the past now. They consume a significant amount of time and require a lot of manpower. Execution of processes is tedious. This suggests a need for digital transformation to fasten and ease the tasks.
Not to forget how covid-19 has changed the scenario. With lockdowns being imposed and the security of our health getting worse, people have adopted net banking and prefer carrying out every single banking activity at the tip of their fingers.
The solution to this is undoubtedly going towards digitalization.
In fact, the next generations are going to be early adopters of the Internet and are going to be a part of the already digital world. The digital wave that we have experienced in our teens or late 20s, is going to be available to the next generation much in advance.
They are practically going to grow up with it. Thus, to be able to cater to them in the future, the digital transformation of banks needs to start today.
As much as people need banks, it is also vice versa. Private banks are coming up with value-additions year on year, thus to compete with them, it is important that every bank adopts digital transformation.
All these factors suggest that India’s banking sector is set for robust growth. Banks that undertake this transformation can expect reduced costs and streamlined processes.
This integration also helps to provide a more hassle-free and engaging customer experience. There is a severe need to digitally upskill your employees to keep up with this rapidly changing online space.
Now that you have understood the importance and need of digitalization in the banking sector, let’s quickly see the benefits of digital reform.
4 Benefits of a Digital Transformation in Banking:
1. Trustworthiness is gained online
Nowadays, people choose their banks depending on how they perceive the institution. Their perception is shaped by the way a financial institution positions itself online. People are influenced by social media platforms, through websites and advertisements. If banks are able to do some good online marketing, it will help them build trust in people’s eyes.
There are several ways to build a relationship with a customer but there is one particular strategy that has produced great results is Online Reputation Management.
Check this Volkswagen’s Case Study and learn how we helped Volkswagen build and improve its online presence.
Now you may ask that hey this is a case study for an auto sector brand, is it still relevant? The answer is Yes.
Whether it’s Volkswagen or an HDFC bank, they all need to adapt and understand the importance of Online Presence.
2. Acquisition of new customers is cheaper and easier
Banks require customers just as much as customers require banks. Therefore, financial institutions can no longer be passive about the way they attract consumers of financial services. The good news is, there is a cheaper and easier way to attract these customers towards you.
The Internet provides great platforms to reach out directly to these potential consumers, right on their devices. This makes influencing them easier, which in turn leads to an increase in the possibility of them coming to you. It’s also called Content Marketing and is the new word of mouth. It helps to boost engagement and earns trust with both prospects and customers.
3. Personalized Offering
Digital transformation allows financial institutions to know what the people actually want. They can formulate their financial services and offer according to customer requirements rather than guesswork. New innovative technological developments allow banks to strengthen customer engagement with personalized offerings.
4. Enables Innovation & Adaptability
Digital Transformation equips banking institutions to act upon technology and market trends and scale these efforts with gradual successes. Only if an institution is able to upgrade itself, will it be able to cater to the demands of the new-age customers. Sophisticated digital technologies have transformed the traditional way that banking was done.
The emergence of shopping portals, social channels, and integrated mobile apps has opened a lot of doors for banks to reach out to their customers.
Banking institutions need to embrace this new world of digital by moving towards a digital transformation. Here’s an interesting stat; Millennials are more likely to watch a 3 minute Youtube video than read a long pamphlet. That means videos are becoming more and more popular as they are concise and engaging.
Along with videos, there are many other forms of Digital Marketing that brands have started adopting. Here are some digital marketing trends that can be capitalized upon in your plan for Digital Transformation.
How can you bring Digital Transformation in the Banking Sector?
Now, if you checked our blog on top Digital marketing trends, you must have understood that there are many ways a bank or any organization can bring digital transformation. You can have it started in-house but if you want to have a comprehensive or advanced approach towards it, you will need a specialist.
This is where IIDE comes into the picture. IIDE offers customized corporate training in digital marketing curated for the banking sector by industry experts to provide a 360° insight into the digital world.
The past year has taught us that a solid Digital Marketing Strategy is how any organization can thrive in a digital landscape. We understand the requirements of your company and our corporate training program has helped many companies like Volkswagen, Abbott, Asian Paints, L&K Saatchi & Saatchi, Mahindra & Mahindra, Cipla, etc to achieve digital transformation with flawless results.
If you are looking to digitally transform your bank, write to us for a personalized demo!
We hope this blog has helped you understand the importance and need for a digital transformation in the Banking sector. It is important that you update yourself with the know-how of the digital industry and expand your learning horizon.