Digitization in banking can enhance the customer experience; make banking more convenient; save time; reduce human error and most importantly keep banks up-to-date with the ever-changing technology that has become an inseparable part of everyone’s lives.
Technology is continually evolving and the banking industry strives to incorporate the latest technical innovations into their systems in order to improve the customer experience and streamline the operational processes of banking. By integrating advanced tools banks are now not only using technology but also providing technology to customers in the form of digitalized financial services for the corporate and retail business.
Expansion of Digitalization in Banking
Most banks have adapted to the increasingly digital environment we live in; this is apparent in the frequent appearance of the word “digital” in the annual reports of top European banks. Another sign of the digital maturity of European banks is the number of banks looking for new engineering and IT employees. Today technology makes up a significant part of the corporate and wholesale banking cost base.
In addition to conventional banks we now have numerous startups and innovative companies offering services in the financial sector giving customers a wider choice of financial service providers including risk management, lending and payment providers. In Europe alone there are over 1,500 companies providing innovative technological solutions in the finance industry. Fintech investments are growing exponentially and particularly in business-to-business situations.
Digital Technology Transforming Banking
New technology in the financial sector comes with increased risk and the need to adapt to the new digitalized environment. Technology has already affected the way customer onboarding is handled including the introduction of biometrics and e-identification for account access. Mobile banking has been transformed significantly by eID and bank processes such as the management of digital data flow; data exchange and the distribution of data has also been transformed by technology.
Open Banking is predicted to boost organic growth significantly; the number of banking APIs available for third parties has grown and big data and business analytics solutions are also a booming sector within the financial industry. Banks are now prioritizing the recruitment of data scientists and cloud computing experts plus the use of robo-advisors and integrated tools to run AI. With the increased amount of banking technology being used these technical advancements are vital for the day-to-day smooth operation of the financial sector. With cloud computing digital solutions can be made scalable and more cost effective. A corporate no-cloud policy or no-internet policy is virtually unheard of these days. Banks are investing more and more in their cloud IT budget and simultaneously moving some of their systems to public clouds.
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