Since the last half and a decade, digital technologies have completely transformed; it has not at all been limited to just providing online banking and mobile functionality. The industry has completely revolutionized and it has reached beyond imaginations creating miracles for the different marketing and business service sectors, including the Banking, Financial Services, and Insurance Market. Today, I am going to discuss about the ‘Digital Transformation in the BFSI sector. But before that, let’s talk on the overview of digitalization age and its transformation affecting and benefiting the different industries.
The New Era Drives Digital Transformation
Digital transformation is embedding the digital world into different areas of business and services. Fundamentally, digitalization is more about providing value to the customers using the best of design and technology. A perfect digital strategy meets an ideal design for developing a perfect production/service/workplace. From the small scale businesses to the large scale enterprises, every industry has transformed their business with the digital era for getting maximum coverage.
If we believe the reports, the Digital Transformation in the BFSI market will hit 121.70 Billion USD by 2025.
The increasing adoption of smartphones and smart devices is the driving factor of digital transformation in the banking, financial services, and insurance market. Also, the era of digital currencies such as Cryptocurrency is a major player for the digitalization in Banking and Financial Services.
The Significant Collaborations Are the Big Game Changers
Have you ever thought, what is the impact of the big business and tech collaborations on the digitalization? Well, the tech collaborations between the big business tech companies such as Google, IBM, and Amazon are the best example of how digitalization enhances the different sectors in the economy. The collaborations of these companies with the banking and insurance sector have positively influenced people towards the new digital era that is both acceptable and accessible.
The central elements of Digital Transformation in the BFSI Sector
From Customer Experience
- Consumer/Customer Understanding
- Consumer/Customer Touch-Points
- Top Growth
Be it any business sector, whether the Banking, Financial Services, and the Insurance Market; the customers have started getting engaged on the different portals for receiving and sending the relevant information. ‘Share’ is the new digital era trend that has replaced the old school tactic of ‘word of mouth.’ Now people share on social media to help other relevant customers know about the service, faults, or merits.
In short, customer understanding has enhanced with the digital transformation, and businesses are taking great advantage of more emerging technologies such as AR and VR for improving the customer touchpoints.
Be it insurance, financial services, or banking; the top-line growth is to interact with the customers online by integrating more powerful tools and options. The chatbot has replaced many customer service engagements in many sectors; it is also one of the compelling examples of digital transformation.
P.S. Chatbot engagements are robust, reliable, and relevant as per the customer experience.
Online Banking Insights
- The global reports state that 81% of people, who are banking customers, choose to utilize the online banking feature rather than visiting banks for transferring money and carrying out other activities
- 56% of people order checks from the bank using the application feature in America
- 49% of people use the bank payment option for paying utility bills
From Operational Experience
Automation is a new process in every industry. Have you checked the recent Automated Teller Machines by visiting your nearest bank counters? The money deposit queues are getting replaced by an ATM that helps you in depositing money to your or anyone’s bank account without any confusion or query. The digital transformation in the BFSI has made things quick and easy for both the customers as well as the Institution owners.
When we talk about the workplace or work stations, things are much cooler amongst the employees than before. A virtual workspace is the best example of digital transformation in the BFSI industry; it is equally reliable and secure for the institution. The new digital collaboration tools and software bring in more productivity at work.
From Business Models
The perfect example of digital business models in banking and financial services is the introduction of digital apps replacing traditional banking systems. Now, an app is designed with robust security tools to help process the banking activities and needs without having to visit the bank or financial institutions.
Updates are made easy with the digital age. Now, updating your information is secure and quick. One doesn’t have to miss the crucial working hours for visiting the banks and insurance companies for updating their necessary information or other details. Things have become both secure and accessible through the smartphone.
Buying and purchasing are replaced by an application. Virtual products have replaced the paperwork in the BFSI industry. Virtual money transfer is also the best example of digital transformation. Also, all these are globally connected and accessible for making your tasks simpler, easier, and convenient.
P.S. Providing global flexibility has always been a significant line discussion for the Digital Transformation.
From the above discussion, we can sum-up that the ‘Digital Transformation’ in the BFSI sector is actively and successfully splinted into the following:
- Artificial Intelligence
- Cloud Computing (59.8 % market share in 2018)
- Blockchain & Crypto Market
- Big Data
Digital Transformation is helping you generate more profits
Talking in brief, the digitalization in the different industries and sectors have drastically reduced the operational cost. The reduction of the operational cost has shown significant savings in the books of account. These savings are utilized for more informative and productive measures that help in bringing in more profits. So technically the transformation has become so much favourable for BFSI sector!
The digital transformation is the BFSI sector has dramatically increased over the past few years, and as disclosed above, the figures are going to hit high in the coming years.
If you too want to leverage the benefits of this revolutionizing sector, then you have landed on the right page. TechnoSIP is globally renowned BFSI service provider, empowering the BFSI industry to get better with operational efficiency and enabling real-time insights, secure transactions, and personalized services by delivering cutting-edge banking and financial solutions.