The world is treading on the path of innovation. We live in a digitally-driven society in which everything has a digital component. The most significant driving factor behind today’s economy and financial system is indeed technology. This holds relevance all the more for the BFSI sector. In today’s times, the market is filled with smart gadgets being the new norm, and online transactions are the new standard. We should expect to see technology-driven, more breakthrough, and innovative digital revolutions in banking with strategic solutions as we progress deeper into the digital era. Whether it’s mobile banking or any other kind of digital payment, digital technology is helping to shape the Banking and Financial Services and Industry (BFSI) in India as well as throughout the world.
Customers may now lock their belongings in the bank with a single tap.
Adoption of technology in the BFSI sector
The COVID-19 pandemic was a turning point for banks, putting their IT architecture, strategy, and workforces under a lot of strain. The crisis was a wake-up call for most, shattering whatever illusions they had about how far they had advanced with digital transformations and cloud migrations. However, the BFSI industry was able to re-energize and refocus due to technological advancements, particularly in the aftermath of the pandemic’s destruction.
The pandemic transformed technology into transformative forces within the BFSI sector and unleashed digital innovations. The Indian banking sector is now embracing technologies such as Artificial Intelligence, Blockchain Technology, Robotic Process Automation, Cyber Security, and Big Data Analytics with the view to leveraging existing data, expanding products and services, generating revenue, and streamlining communication.
Banking with a clear-sighted perspective persisted in the expanding digital transformation, reimagining their ecosystem. We are presently witnessing a revolution in Fintech that has transformed the banking industry exclusively. The processes are being automated, new banks are launching “NEO” banks in the digital space without the actual existence of physical branches. Uncountable digital-driven trends have emerged and have sped their way into every banking system.
The BFSI sector is revamping with the emergence of new-age technologies:
Artificial intelligence: By boosting automation and dynamic systems, AI is currently evolving as a component of the business environment, redefining the whole BFSI ecosystem. Decision-making is aided by AI, which also helps improve customer services with the assistance of virtual assistants and increases operational efficiency.
Advanced Machine Learning algorithms further aid in data processing speed, which further render a helping hand in compliance management, credit risk profiling, and fraud detection even before it occurs. By customizing client experiences, analyzing massive amounts of data, and boosting revenue growth, AI and Machine Learning help businesses save time, finances and efforts.
Blockchain Technology: While AI technologies have been around for a while, blockchain has emerged as an interesting digital technology in recent years and is poised to revolutionize the financial industry. Banks can process payments more quickly and appropriately using Blockchain-based banking. The implementation of blockchain technology can significantly lower transaction costs and lead to the creation of new financial products as well as services that generate new income streams.
Robotic Process Automation: Banks and financial organizations can use Robotic Process Automation to develop pre-programmed processes that can self-learn from existing data trends and business choices. It has the potential to cut their overall administrative costs in half while also boosting the quality and agility of the banking process. RPA in the banking industry may also help with compliance by automatically creating reports and keeping track of the automated procedures. Robotic Process Automation, in combination with cognitive automation, can assist banks in dealing with the future challenge of data overload as well.
Cyber Security: A cyber threat can strike at any moment and from any location. The most hazardous characteristic of cyber risk is that it is always changing and evolving. Cyber-risks necessitate a proactive effort on the side of BFSI businesses. They must first review, evaluate, and comprehend their organization’s current security condition, as well as determine their cyber-risk appetite. They should then create a cyber-security plan to assist them in identifying risky areas and close such holes as soon as possible. This is the reason why businesses should employ and educate cyber-security teams ahead of time to minimize threats as well as vulnerabilities for a great customer experience.
Big Data Analytics: Improving the retail banking experience necessitates a thorough understanding of your consumers and the ability to communicate with them in their language. Taking a whole perspective of your clients and exploiting the data available are prominent examples of the same. Big Data Analytics are critical for improving the financial services experience and making important business choices. The importance of employing this technology is to acquire deep insights into the changing demands of the clients. As a result, big data in finance can result in significant outcomes.
Enhanced customer experience with banking
The capacity to adapt to changing consumer requirements has become a major differentiator for firms. Customer experiences thus remain the top focus for modern businesses. The implementation of technology in the BFSI industry will benefit customers the most. The banking industry and its workers will profit greatly from new-age technology since it will reduce human errors, operational costs as well as other added expenses, and waste. But, most importantly, it will allow banks to improve their customers’ experiences by reducing settlement times and paperwork. For instance, issuing a bond may be either a painstakingly difficult job or a smooth, almost joyful transaction, similar to enrolling in personal online banking. Customers may get a personalized, safe, and convenient experience through digital channels, regardless of where their financial institution is located.
The banking sector has evolved dramatically throughout the years as new technologies have been introduced. Banking procedures are now considerably faster and more trustworthy, resulting in better client experience.
The significance of the digital banking experience can be attributed to its various benefits such as reduced operational cost, retaining customers, staying connected, as well as enjoying a competitive edge over the other players in the market with the help of new-age technologies. In a nutshell, the customer experience in the banking ecosystem holds massive potential for growth and tech deployment can play a pivotal role in driving client experiences in the BFSI sector.
The above article is authored by Nilesh Jahagirdar, Co-Founder, [x]cube Labs.