According to one report, more than 90% of financial service providers accelerated the pace of their digital transformations in 2020. Those that accelerated their transformations by five times that year grew their year-over-year profits by up to 4.6 percentage points.
In 2022, financial institutions are continuing to break free from legacy IT equipment and embrace a fully digital future.
If you’re a financial services firm considering modernizing your technology, it’s important to understand digital transformation best practices before you start innovating at lightning speed.
Today, we’re discussing digital transformation in financial services and distilling some lessons learned from organizations that have blazed this trail.
7 Tips for Digital Transformation in Financial Services
1. Go All in With a Customer-Centric Digital Approach
Gone are the days when customers had no choice but the visit a bank or wealth management institution in person. Now, they’re embracing digital platforms that allow them to take care of their financial needs on the go. To keep them happy, financial services providers are moving their services online. Even if these facilities choose to offer these same services at their branch, it’s still important to give customers the option for a full-service digital experience.
The 2022 Top 12 Professional Services Software Systems Report
Our experts have compiled a list of the top professional services software, detailing the key differentiators of these PSA point solutions and ERP systems.
2. Invest in Cloud-Based Solutions
As digital transformation becomes more mainstream, more banks are closing their brick-and-mortar locations. Instead, they’re offering online and mobile solutions to meet the needs of their on-the-go customers. Modern ERP solutions are built in the cloud. However, traditional institutions have been hesitant to make the change. Much of this hesitancy has been related to the strict regulations around privacy and security that they must follow. In response, cloud providers have made strides to show that their platforms have robust data protection features. This has encouraged banks to look more closely at cloud-based solutions, like the systems on our top ERP systems list.
3. Use Data to Drive Decision-Making
Financial services institutions handle an enormous volume of data. To stay attuned to their customers’ needs, they must have the ability to analyze this data. Without a proven system in place, it’s hard for executives to organize this information. To solve this problem, many institutions are turning to digital experience intelligence (DXI) solutions. By integrating DXI into their operations, they can capture and analyze all their digital customer interactions. This allows them to make more informed business decisions, fix technical errors, and discover revenue-boosting opportunities as they arise.
4. Cater to Digital Natives
Millennials now outnumber both Generation X and Baby Boomers, making them the largest generation until Generation Z surpasses them. These individuals have never lived outside of the Digital Age. They’re adept at using the internet, as well as most forms of technology. Appealing to this demographic is key for financial institutions that want to remain relevant and competitive. Social media marketing is becoming more common as institutions seek to shape their brand identity, showcase new products, and reach customers where they are.
5. Lead With a Mobile-First Strategy
Well-designed apps give customers what they want in a format that’s easy to navigate and use. As financial institutions research the best and most efficient way to embrace digital transformation, they consider a mobile-first strategy. Rather than simply translating their websites onto a smaller screen, they should take advantage of the unique features that users can only get on their mobile devices. From personalized ads and built-in cameras to real-time text alerts and GPS technology, there are a slew of mobile-only tools that can enhance the banking experience.
6. Leverage Artificial Intelligence and Advanced Analytics
According to one recent report, 85% of IT banking executives have a clear strategy for adopting artificial intelligence (AI). The financial sector has started to embrace AI as a powerful player in their data analytics toolbelt, and the trend continues to grow each year. These technologies provide a range of benefits for forward-thinking institutions. For example, advanced AI tools can enable certain safety features, such as automatic fraud monitoring and risk analysis. They can also provide enhanced customer support functions and personalized service recommendations.
7. Keep Security and Privacy Top of Mind
One reason why this sector has lagged in digital technology adoption is the security risk involved. To circumvent these liabilities, institutions are designing secure customer journeys from the very beginning. In their initial design and development stages, they’re integrating functions built specifically for customer privacy, integrity, and consent. This has given rise to an entirely new sector: reg tech. Put simply, reg tech providers help financial services institutions accurately manage their regulatory needs at an affordable cost. In addition to relying on reg tech firms to stay compliant, companies are also leveraging AI platforms to monitor their operations for any suspicious or fraudulent activity.
Are You Poised to Take the Leap?
Digital transformation in financial services is about making digital tools easier and more convenient for banking customers to navigate. It’s also about making these tools secure using advanced security technologies. As long as institutions can understand and cater to their target audiences, these systems could have great potential. Are you interested in learning about new technologies that could revolutionize the way you do business? Contact our ERP implementation consultants below.
