Going full-on digital in the banking sector has been the talk for years. And if there’s one thing that the recent pandemic called the attention to, it’s that pushing for digital banking transformation is the way to go.
So, why is it the right choice for banks to go digital?
Harnessing today’s technologies to advance the way we bank can work beyond expectations. Not to mention, it has the power to propel the state of digital banking to new heights and reinvent the flow of the world’s finance.
Now is the best time to realize your organization’s digital banking initiatives. Stepping up and gearing towards the future of banking technology are redefining the expectations of both executives and customers.
The shift of customers to digital banking
While we can agree that consumers are kings, digital banking makes managing finances simpler and accessible at any time, anywhere. Visiting a physical branch to make deposits, apply for loans, transfer money, and pay for bills is now an option. These services (and more) are becoming readily available through digital devices.
In the Philippines, ATM transactions declined by 25% and value by 30% since the onset of ECQ. At the same time, money transactions using e-payment services spiked. The Bangko Sentral ng Pilipinas also reported that around 4.1 million digital accounts were created among banks and e-wallet platforms. These numbers represent that Filipinos are changing their preferences from traditional to mostly digital due to social distancing protocols.
Looking forward, 3 in 5 Filipino bankers will switch to a more digital experience in banking. While 4 in 5 will open new accounts with competitor banks that will dissolve their relationship with their first bank. (Fintech and Digital Banking 2025 report) With this at stake, it’s an instinct for banks to get right into the competition and face it head-on.
Attracting and retaining customers has always been a challenge, but now, it’s a step further. And a step towards finding the right technologies for the right services is a step towards the right direction.
Common challenges faced by banks
With this in mind, there must be challenges that banks encounter that hinder the digitalization of their banking system, right? As a matter of fact, yes.
Based on a report, 86% of banking executives say that their legacy banking system is too complicated and the main reason that hinders them from enabling digital interactions with their customers. In the same study, even though 86% of the respondents agree that digital is a high priority, only 19% have a clear digital strategy. (Boston Consulting Group’s Global Corporate Banking report, 2018)
We can infer from this survey that digital transformation has always been an integral part of most business initiatives. But, steering the ship and managing the scales to maximize this considerable investment is a struggle. In other words, banks prioritize the move to go full-on digital, but they’re moving at different paces.
What to do?
Just like with any business transformation, a strategy is first and foremost. Above all, a top-down, integrated approach starting from the C-suite with the CEO steering the ship and involving every aspect of the organization is the best course of action.
The Boston Consulting Group recommends four priorities in making this happen:
To sum up, if traditional banks want to stay afloat, they should start and take advantage of new banking technologies. It’s also an excellent tactic to streamline the banking experience, choose the right operating strategy, and embed the digital mindset within the organization.
ROI in digital banking
But of course, going digital is not an easy feat. It will involve a lot of resources and cost you money, time, and valuable resources. Before you proceed with the investment, what’s in store for you? We know that return on investment is essential in any business transformation initiative. Knowing these can speed up executive buy-in and identify the right technologies for your bank.
There are four top reasons why executives should invest in digital banking:
Digital is the future
Keep in mind that consumers are online, so should banks be. Omnipresence is a superpower the best banks have. Allowing your customers the freedom of choice to access their finances, anywhere, any time, will increase your market share in attracting and retaining clients.
Moreover, going digital can bridge the gap between banks and their market even better. It is a race towards digital transformation, and staying behind is not a safe choice.
Digital is the future, and it’s fast approaching. If you’re looking for a solutions partner to work with you, we’re right here.
Exist has streamlined the solutions-building process that will complement your existing banking system. From mobile and internet banking to onboarding and origination, we can even tailor-fit our solution to your unique needs.
That and more on our next blog on why Exist is your innovation partner of choice.
Take your next step with a banking innovation that the future needs. ‘Till our next!
Check out our video!
Watch our Digital Banking Advocate, Jem, as she shares in her vlog how Filipino customers are shifting their banking preferences. What are the common challenges faced by banks? What to do? And in what ways can you get your return on investment?
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Exist fosters a future-ready digital banking technology that equips its banking and fintech partners with the agility to adapt to ever-changing market demands.