There are certain industries that are more tightly regulated than others. The financial services sector is one of them.
Like healthcare organizations, financial entities regularly deal with information that’s highly sensitive and confidential. As such, they’ve been slower to adopt modern digital technologies than others, mostly out of an abundance of caution.
However, this is quickly changing. Now, the financial industry digital transformation movement is picking up pace.
8 Financial Industry Digital Transformation Trends
1. A Customer-First Focus
As financial companies embrace new technologies, they’re letting go of some of their more outdated, manual processes. Not only is this a smart move competitively, but it allows them to meet their customers’ changing needs.
Gone are the days when people visited a bank in-person to perform all their transactions. Now, they’re looking for institutions with a digital-first approach. This means mobile banking and other features that cater to on-the-go lifestyles.
Financial companies are moving most (if not all) of their functions online, from deposits and account creations to loan applications.
If you currently have a brick-and-mortar presence and are considering implementing some emerging technologies, consider how you can create a seamless customer experience across these channels.
In other words, how will you align your in-person services with your online services? If you want customers to enjoy full-service digital access, a cohesive strategy is essential and data integration is mandatory.
The 2024 Top 10 ERP Systems Report
What vendors are considering for your ERP implementation? This list is a helpful starting point.
2. Moving to the Cloud
As banks become more digital, it should come as no surprise that they’re also moving to the cloud.
According to one report, bank branches have been closing at a steady rate since 2011. During the pandemic, this rate accelerated as more banks embraced cloud computing.
This has led to the emergence of fintech services that provide customers with copious options. These software solutions and apps allow customers to access their accounts, secure a loan, manage their wealth, and more.
Historically, financial services organizations have been hesitant to work with cloud providers due to concerns around data security and data protection. Now, cloud-native providers are going the extra mile to assure organizations that their software is secure.
Risk-adverse banks and companies with similar regulatory demands should consider working with a cloud provider that has been building cloud platforms since its inception.
3. Integrating Digital Experience Intelligence (DXI) Solutions
To meet customer needs, financial services companies are looking more closely at their business data.
To make sense of thousands of daily customer interactions, companies are implementing digital experience intelligence (DXI) solutions. Driven by artificial intelligence (AI), DXI not only captures 100% of interactions, but it analyzes them.
Business leaders and their teams can access these insights to identify issues and make more informed decisions that improve the customer experience.
4. Focusing on Social Media
If you remember going into your bank to fill out a deposit slip, engaging with a bank on social media might sound like a foreign concept. Yet, this is an important way organizations are reaching out to one of their biggest demographics: digital natives.
Financial companies are using social media to . . .
- Market new products
- Cement their brand identity
- Continually engage with customers
If your brand isn’t heavily using social media, it’s time to make a change. Your target audience is already there, and so are your competitors.
5. Embracing AI
According to a recent survey, 52% of financial services organizations say their AI initiatives are a higher priority than they were one year ago. This is a trend that has continued to grow each year, even as companies struggle with the AI governance structures required to meet regulatory requirements.
It’s easy to see why AI’s popularity continues to rise. This technology can help banks automate and simplify processes such as:
- Credit risk analysis
- Fraud monitoring
- Customer service
- Making personalized recommendations
6. Emergence of Reg Tech
Traditionally, financial companies have relied on human monitoring to facilitate regulation and compliance. This method can be time-consuming, high-risk, and expensive.
Enter reg tech. Usually driven by AI, these tools help companies more accurately monitor activities on an ongoing basis. They can also highlight issues with greater accuracy while ensuring customer data protection.
7. Personalized Solutions
Today’s customer wants to feel like they’re the only customer a brand has ever had. The same applies to financial customers. To maintain engagement and satisfaction rates, organizations must deliver personalized solutions and interactions at every turn.
Increasingly, finance companies are gathering and analyzing data from all their digital touchpoints. This is helping them answer questions such as:
- Who is this customer?
- What matters to them?
- What do they want?
- How/where do they spend their time?
- How do they engage with our organization?
To establish this 360-degree view, many firms are implementing customer relationship management (CRM) systems. These solutions provide a centralized database for all customer data, so institutions can develop targeted marketing campaigns.
Some firms are integrating CRM systems with ERP software, which is enabling them to automate workflows across functional areas.
(Learn about the benefits of ERP and CRM integration.)
8. Innovation-First Culture
As they move forward in their digital transformation journeys, financial services institutions must consider the kind of workplace environment they’re creating.
Are we recognizing achievements and promoting innovation? Are we encouraging cross-team collaboration? Do all employees feel supported and safe enough to contribute ideas and assist in decision-making?
If the answers are no, then it’s time to reevaluate your culture.
Change-first organizations are ones that embrace digital transformation, not run from it. All team members work together to drive ROI on tech investments.
Keep Up With Your Financial Industry Peers
It’s official: The financial industry digital transformation movement is moving full steam ahead. Organizations are making big changes and some deep investments. They’re migrating away from on-premise systems and into the cloud. They’re deploying AI, leveraging DXI, doubling down on security, and creating a continuous improvement culture.
Ready to discover how your own organization can benefit from these trends? Contact our enterprise software consultants below to discuss the digital business tools you’ve been contemplating.