Digital transformation has been a hot topic in the financial industry for several years, with many banks and fintech companies exploring ways to leverage technology to improve their operations and better serve their customers.
In this article, we examine why business should invest in digital transformation and show examples of major industry players who have successfully implemented digital transformation initiatives. Here’s why you should get ready to ramp up your competitiveness in the digital ecosystem.
Why you need to invest in digital transformation
One key reason you should invest in digital transformation is to meet growing consumer demand for digital payment services. With the widespread adoption of smartphones and the internet, more and more people are conducting their financial transactions online. They expect you to offer convenient, user-friendly and smartphone-based digital tools. By investing in technology, you can satisfy this demand, improving customer experience, customer satisfaction and loyalty.
Further, all businesses are investing in new technology to increase business efficiency and reduce costs. They can streamline their operations and save money by automating certain processes and utilizing artificial intelligence and machine learning. For example, some banks have implemented chatbots to handle simple customer inquiries, freeing customer service representatives to focus on more complex tasks. Additionally, banks can use technology to automate back-office functions such as account reconciliation and fraud detection, saving time and money.
In addition to improving customer experience and increasing efficiency, technology can help businesses stay competitive in a crowded and rapidly evolving industry. Fintech companies have emerged as formidable competitors to traditional banks, especially in card issuance services and personal finance, with a technological edge due to their focus on innovation and agility. By investing in new technology, banks can keep pace with new entrants and offer innovative fintech services, including mobile payments and peer-to-peer lending platforms.
How leading brands are leveraging digital services
JPMorgan Chase has been reaping the rewards of digital transformation for a few years. The bank has invested heavily in technology, including a $12 billion budget for technology and operations in 2022. As a result, it has been able to roll out innovative digital products and services, including its mobile banking app, which allows customers to manage their accounts, make payments, and deposit checks remotely. JPMorgan Chase has also implemented artificial intelligence to improve its fraud detection capabilities and uses machine learning to enhance customer service across every touchpoint.
Another example of a bank that has undergone digital transformation is Wells Fargo. The bank has invested in various digital tools and platforms, such as its mobile banking app, which allows customers to access their accounts, pay bills, transfer money on the go and track all their spending. Moreover, the bank has implemented several other digital initiatives, including its “Greenhouse” program, an incubator for fintech startups, and its “Innovation Lab,” a space for employees to collaborate on new ideas and technologies. While Greenhouse may have closed to new accounts last year, its capabilities were successfully folded into Wells Fargo’s broader portfolio making it a very successful move, especially with younger customers.
Of course, digital transformation is a global phenomenon. Around the world, major financial institutions have significantly increased their commitment to stay ahead of new entrants. However, perhaps nowhere is the race more heated than in Japan. Japanese banks recognized they were starting to lag behind international competitors and disruptors at home. So they’re increasingly working with companies like Moneytree to fast-track modernization and evolution to deliver customer-centric Fintech services.
Digital transformation: more important than ever
Digital transformation is essential for banks and fintechs looking to stay competitive and enhance their operations. Banks can improve the customer experience, increase efficiency, and offer innovative fintech products and services that win with customers by investing in new technology.
With fintech software development playing such a crucial role in creating and implementing fintech products and services, all companies should consider working with a financial services technology consulting partner. It’s the best way to understand the opportunities and road ahead. Start your journey and learn about Star. They are one of the world’s top consultancies and work with companies like Moneytree, Paidy, Expensify and more to achieve their technology goals. Learn more and see how they can help you.
