It’s well-known that banking is a late adopter of Digital Transformation, compared to more agile industries like retail and e-commerce. This is especially true for established financial institutions. In order to maintain its intricate and lengthy core, it takes more time and money significantly. In addition, the established mindset of the workforce frequently rejects a comprehensive transformation such as digital front office transformation for financial institutions. There is no immediate need for a radical shift.
Digital front office transformation is said to be responding well. Most digital initiatives by financial institutions are a response to big industry changes and shifts in client behaviour that force them to adjust. Mobile banking and electronic KYC are two examples of this. So, here are some benefits of digital front office transformation for financial institutions.
Automated processes
Intelligent Banking Automation (IBA) is a term coined by leading financial institutions to describe the combination of AI, robotic process automation, and a process orchestrator (IBA). It is the future of banking since IBA automates all repetitive, rule-based manual procedures, thus reducing the need for human interaction.
Today, banks are putting a lot of money into combining their automation skills with data analytics and human innovation. Advanced automation results in complicated challenges being resolved automatically, deep insights being gained, and new service ideas being developed across the organisation.
Data analytics is currently being used by banks in every aspect of their operations, allowing them to:
- Compile data on client behaviour and expenditure
- By analysing client data, you can better classify your customers
- Improve risk management by better understanding risks
- Assist in delivering a personalised service
- Proactively respond to consumer comments to improve service
Because banks handle tens of thousands to tens of millions of transactions per day, banking data comes under the Big Data category. With so much data at their disposal, there is virtually no limit to the amount of information they may learn about their business, their consumers, or the industry as a whole. Consequently, banks need a comprehensive data analytics strategy that allows them to use both structured, semi-structured, and unstructured data from both internal and external sources.
Improved Customer Satisfaction
Customer experience is usually high on the priorities for banks embarking on digital transformation. Customer experience in banking is the total of all interactions customers have with banks via various touchpoints. There are a variety of ways to conduct financial transactions online, such as through internet banking, phone banking, email, and even social media.
Most banks are implementing these tactics in order to improve the client experience:
Mobile app development with the customer in mind
Mobile banking applications are now a must for banks. In today’s world, clients expect to have the ability to access financial services at any time and from any location. Banks are better equipped to attract and retain customers while also reducing operational expenses when they create mobile applications that serve several purposes and are centred on the user.
Electronic Know-your-Customer (eKYC)
The quality of their initial impression primarily determines the quality of a customer’s experience. The majority makes this first impression of banks throughout the onboarding process for new customers. Banks now can digitise onboarding, lower expenses, and enhance client experience owing to eKYC. Instead of spending their valuable time in long bank lines, consumers no longer have to fill out reams of paperwork just to get started.
Hyper-personalization
In contrast to typical personalization, which relies on predictive data, hyper-personalization focuses solely on the customer. When delivering hyper-targeted products, banks can use predictive analytics, artificial intelligence, and machine learning.
The Digital Core
Composable banking — the idea of deconstructing core banking systems into separate components with best-for-purpose functionality – is being implemented by banks instead of holding on to their monolithic core systems. In the future, composing banking will have enormous possibilities. In this way, it helps banks digitise their very core. What’s more, there’s a lot more. The digital front office transformation for financial institutions allows banks to be quick and flexible start-ups in adding and removing new features without disrupting their existing infrastructure.
