Digital business models will shape the future of banking. Customers' tastes and habits for many conventional financial services are already shifting due to digitalization. Thanks to digital transformation, traditional service providers have also found themselves in a competitive environment. Banks must rapidly adapt to become "digital first" companies to survive in today's market. Many financial institutions in 2023 have transformed into pure technology firms offering digital products by capitalizing on their enormous client base and distribution networks.
Trends and Examples of digital bank transformation
The banking sector has changed drastically as new digital technologies have been introduced. Thanks to the proliferation of digital banking, customers may use financial services whenever and wherever they choose. As digital technologies proliferate, online banking is poised to become the norm. Here are some of the digital banking trends defining the future of banking in 2023:
The use of cell phones to complete financial transactions has skyrocketed in popularity in recent years. Because of its portability and simplicity, mobile banking has quickly emerged as the future of digital banking among consumers. It is among the top digital banking trends that banks need to have. According to Statista, there will be 1.75 billion people using mobile banking worldwide by 2024. Because of the rising demand for mobile banking services, clients may abandon financial institutions that are sluggish to adapt.
Traditional marketing and branding strategies have been widely used in retail banking. Experts agree that it needs to shake things up a little. Financial institutions of all sizes use various remote-experience-booster strategies, but their in-branch identities may not always reflect their online ones. That's why banks need to use digital signs.
Bank digital signage employs vivid images and attention-grabbing material, facilitating a smooth transition between online banking, mobile banking apps, and the teller queue. Nearly 90% of adults can use mobile banking, so customers have grown to demand the same level of service and convenience in-person as online.
Since most banking has gone online, the consumer experience has evolved. Many people expect their banks to provide digital services and apps. One of the most effective methods of harmonizing the physical and virtual worlds is digital signage. Having to wait is a hassle for everyone. Using a digital screen to indicate who is next in line helps the line move more quickly and makes the wait seem shorter. Customers have a better experience overall with digital signs, even if the line moves slower. Additionally, interactive signage can keep customers engaged while accessing relevant information.
Regarding new developments in digital banking, cloud computing has skyrocketed in popularity. Accessible from any location with an internet connection, "cloud computing" services include software, data storage and virtualized networking resources.
The various benefits of cloud computing will cause a profound shift in the banking business in 2023. Here are a few:
- Savings on expenses
- Global scalability
- Enhanced efficiency
- Sufficient safety
Banks and other financial organizations can lessen the likelihood of data loss in a natural or artificial catastrophe. Cloud computing also aids financial institutions in breaking down silos of information storage. There is no longer any need for conventional server hardware or administrative personnel.
Open banking and Application Programming Interface (API) use will skyrocket in 2023. According to a recent McKinsey survey, over 60% of customers are open to sharing their financial information with third-party providers in exchange for improved financial products and services.
Banks will need to prioritize not just offering a flawless customer experience but also exploiting customer data to provide financial solutions which are individualized to the individual. This is because open banking makes it easy to compare rates and move between various providers. Therefore, banks must use new technology and form strong collaborations with fintech firms and other third-party providers to provide the most competitive suite of services possible.
Creating a customer-centric culture
Companies with a digital-first mentality can better respond to shifting consumer tastes. With the digital transformation in financial services in full swing, they may update to cutting-edge technology, do away with outmoded procedures, and tailor offerings to specific markets. The company's culture is more significant in today's commercial environment. If an organization does not have a customer-centric perspective, then even the well-planned digital transformation will fail.
This highlights the need to put the consumer at the heart of any digital trip design. Thankfully, it can be implemented quickly and painlessly in digital-first businesses. Some careful forethought is all that's required. The organization must actively look for and implement ways to address consumer concerns. The digital transformation should focus on the client, even if it were difficult for traditional banks to make such rapid changes.
Use of AI tools like chatbots and virtual assistants
By capitalizing on their vast client base and broad distribution channels, many banks are transforming into pure technology corporations in 2023, offering digital solutions. Banks can't compete with pure technology businesses with access to powerful analytics and can crunch massive amounts of data, even in areas like fraud detection and compliance.
Chatbots and virtual assistants are making waves in many other sectors, their versatility makes them especially useful in the financial sector. Financial institutions could consider using these innovations to serve their clients better. They may lower contact center congestion, free up workers for other useful activities, and provide consumers with automated solutions to frequently asked questions. Most mobile banking applications, including those on smartphones and tablets, already include these features.
Many financial institutions in China rely on chatbots to handle routine transactions. HDFC Bank in India tested out a digital assistant for its website to meet its clientele's evolving needs. It was seen as an attempt to improve consumers' digital experiences. The virtual banker offered by the Spanish financial institution BBVA has proven very popular with the younger generation in Latin America.
Cryptocurrency and Blockchain
Customers now have an alternative to traditional banking services made possible by blockchain technology and cryptocurrencies. Bitcoin, Ethereum, and Litecoin are examples of decentralized digital currencies since any government or financial institution does not back them.
Conversely, blockchain is a distributed ledger allowing safe and transparent financial dealings. These innovations make faster, cheaper, and more secure financial transactions possible.
Several significant factors are driving the bank digital transformation, with interactive banking at the forefront. Banks may improve the client experience by making it more accessible, convenient and individualized via conversational banking technologies. The pandemic served as a timely reminder of the importance of every company's services. Even before the pandemic hit, the transition to digital media was rapidly accelerating. This crisis has also presented a chance for financial institutions to reevaluate their goals, adjust their mission statements, and enhance the human elements of their digital banking services. Look DS digital signage products can make a valuable contribution to your bank digital transformation quest.