Why the Banking Sector needs a Digital Transformation

Traditionally, Banks and Financial Institutions could gain customers quite easily. People chose their banks depending on how near the bank branch was to their residence. Now, the situation has changed drastically. There is a change in technology, consumer expectations, and the amount of competition.

This graph shows the brand value of the leading banks of India in 2018. How do you think these banks achieved this? What did they do to make sure that their brand value does not dwindle?

The answer is- Digital Transformation in the banking sector

What is Digital Transformation?

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 their customers. Banks which undertake this transformation can expect reduced costs and streamlined processes. This integration also helps to provide a more hassle-free and engaging customer experience.

Why is a digital transformation required for the banking sector?

Today in India, there is increased spending on infrastructure, fast implementation of projects and continuation of banking reforms. These are expected to provide impetus to the growth of the industry as a whole. All these factors suggest that India’s banking sector is set for robust growth. Yet, one thing that the banks can’t ignore is the advantages of digitization and how it is going to benefit them.

Here are some reasons as to why banks and financial institutions require digital transformation:

Trustworthiness is gained online

Nowadays, people choose their banks depending on how they perceive the institution. Their perception 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.

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.

Personalise 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.

Stay Innovative and Adaptive

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 have 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. Make sure you do not lag behind!