Future proof Digital Banking

Article

Future Proofing the Banking Ecosystem- Creating Digital Banks that are future ready

As high speed innovation is revolutionizing the world, it’s a pivotal moment of change for the banking industry as well. 2020 has been a breakthrough year for the banking industry, specifically digital banking. Although the planning and implementation of digital banking had been in the pipeline for numerous banks for almost a decade but the widespread pandemic, coupled with evolving customer expectations gave this industry a major push towards immediate execution. This acceleration of digitization can be seen as a blessing in disguise by many because Digital Banking is the inevitable future for the industry.

We are all familiar with online banking and mobile banking, and assume digital banking is an interchangeable term for them. However, that’s not the case. Digital banking is a titan, it goes much deeper and comprehensively encompasses every digital program or transaction to be undertaken by the bank. It includes availability of banking services online through website or mobile applications and technologies like data analytics, cloud banking, Artificial intelligence etc.

The possibilities and opportunities in the digitalization process are endless. Most banks believe that digital banking majorly has to do with the delivery channels of the services, however a complete transformation requires major organizational involvement and structural changes in every component of the bank enabling it to thrive in the future successfully.

Banks need to understand that one of the most urgent tasks for them is to foster a future ready and resilient workforce that’s open to technological advancement and doesn’t see it as a threat to themselves. Hence, competency or skills remapping is a practical approach to follow coupled with knowledge sharing and development.
Apart from this, the structure of a future proof Digital bank rests on four crucial pillars; Omni channel banking, Modular banking, Open Banking and Smart Banking. The key is to work on these four pillars and move away from legacy systems and processes to optimize the transition.

Omni channel banking

Omni channel banking, also known as multichannel banking aims to streamline all the channels in a seamless and uninterrupted manner to provide a user a frictionless experience across all the touchpoints. It moves the organization away from internal silos and creates synergy amongst all the channels and departments.

Modular banking

Banks of the future need to save themselves from the inefficiencies and costs of operating through legacy systems and processes. Through modular banking, banks act as central platform between customers and service providers, delivering sophisticated and flexible solutions. This satisfies the 3 C’s each customer craves: Convenience, Customization and control. It also increases the agility of banks and improves their responsiveness to evolving customer needs.

Open banking

Open banking, which is also known as “open bank data”, is a banking practice that provides third-party financial service providers open access to consumer banking, transaction, and other financial data from banks and non-bank financial institutions through the use of application programming interfaces (APIs). It allows banks to be futuristic by letting them understand about the changes they need to adapt for a better customer experience, behavior and data privacy.

Smart Banking

Consumers are aware that organizations possess the ability to predict and deliver personalized solutions to them. For banks it’s important to do the same. The need to leverage data and advanced analytics to create customized services for clients comes under the smart banking approach. Banks can utilize Artificial Intelligence tools like Machine learning, cognitive computing and Natural language processing to successfully compete with fin tech companies as well as platform companies.

THE FINAL
TAKE

Today’s customer is smart, informed, intelligent. They expect their partner organization to look after their needs, know them well and reward them. And it’s important for banks to understand that and proactively work on it, the time to future proof your bank is now!

Author

Hiba Hashim

[email protected]

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