Business leaders often hear the term “digital transformation” and pose a litany of questions about how to achieve it with minimal disruption. This is particularly true in times of crisis or when defining a “new normal,” as short-term gains must not be sacrificed for the promise of long-term success. Executives across industries are driven to out-think, outlast, and out-transform their competition both today and in the future. This requires a change in mindset and applying relevant best practices, such as those we’ve seen in the banking and financial-services sectors.
Digital transformation leverages multiple technologies and solutions, from the cloud and mobile devices to Internet of Things (IoT) and machine learning/bots. It also leans heavily upon customer-focused strategies that address key blockers in scaling-up their business achievements.
Digital Transformation in the Banking and Finance Sector
The banking industry is particularly adept at being client-centric, tech-savvy, and inclusive. The sector is also a rabid adopter of technology, enabling it to fundamentally change its business approaches to deliver the best results.
Remote support and automated customer management were some of the sector’s earliest transformation successes. Using bots, tech-driven personalization, intuitive user interfaces (UIs) and flexible journey mapping gives banks the agility to engage customers wherever, whenever and however they wish to connect. Four key elements have driven this transformation:
Banking IT leaders typically focus on improving the customer experience in banking applications or reducing the internal overhead of manual or time-consuming backend operations (regulatory reports, audit analysis, etc.). Digital transformation can support these efforts by helping IT leaders reduce cost, adopt new infrastructure and application stacks, and deliver an improved customer experience through new digital experiences.
Transformed banking apps often result in higher customer satisfaction ratings, particularly when they include personalization elements based on predictive analysis. By improving customer satisfaction, banks can therefore leverage digital transformation to attract more customers and upsell existing ones, improving their growth up to 40%.
Digital Transformation in the Insurance Sector
Insurance companies are also undergoing digital changes in their customer journey. According to a survey by PWC Insurance, 71% of customers conduct research using digital technology before making their purchase decision, and 26% prefer to buy online – a rate that increases every year. From a technology factor, there have been multiple considerations driving the insurance industry to digitally transform:
Leveraging technology to help customers find the right insurance offerings can both speed the process for the insurance company while delivering a more-personalized experience for users. Embracing digital solutions such as machine learning, predictive analysis, mobile service and contactless support (e.g. live chat or bot-driven customer service) can also contribute to improved customer satisfaction and higher revenues.
Security and regulatory requirements often cause banking and insurance companies to pause when considering certain types of transformation, such as adopting public cloud solutions. However, there are many instances in which pursuing IT transformation can be prudent if they take the time to fully explore the options. There may even be security benefits when migrating to cloud services, as well as improved efficiencies through license optimization, infrastructure/application consolidation, and accelerating application design and development through crowdsourcing.
Digital transformation is a collaborative exercise between business and technology leaders to create and achieve a clear vision for the future. By considering the full range of digital-transformation services, the banking, finance, and insurance sectors can capitalize on their current business strengths while creating new opportunities for future growth.