The current state of digital banking is a story of fragmentation and technology that’s often outdated or poorly integrated. Customer journeys are often suboptimal, and multiple layers of technological solutions often translate to problems like poor data hygiene, lack of regulatory compliance and missed opportunities. In addition, the use of legacy software can make it challenging to integrate up-to-date methods such as AI analytics solutions.
However, demand on both the front and back ends for better digital services and more-efficient processes is driving banks to take on digital transformations that will help them stay competitive in the 21st-century technological landscape. Customers expect a frictionless, personalized and highly functional digital experience, and to match strength with digital-native competitors, banks and lenders must transform how their organizations do business.
What is digital transformation, and what does it mean for banks and lenders?
A comprehensive digital transformation strategy is more than just investing in new digital tools. It’s about rebuilding the structure and infrastructure of your business so that online and digital services and processes form the core of your competencies and offerings. Digital transformation is an ongoing journey rather than an end goal; it’s a continuous process that iterates as you steadily improve and streamline operations and integrate new and improved technologies.
One of the key aspects of digital transformation in banking is better gathering and leveraging of data. Banks, especially larger ones with a longer business history, possess huge quantities of data that may be siloed or poorly utilized. By improving how they collect, analyze and make use of data, banks and financial institutions have an opportunity to enhance their decision-making abilities and engage with consumers in a more authentic, personalized way.
Perhaps most important, digital transformation is customer-centric. While upgrading, merging and integrating back-end technologies and data solutions is a key component of the process, it’s all done with the customer experience top of mind. Centralizing, streamlining and modernizing digital operations help to create a seamless, secure and highly targeted customer journey.
The core pillars of digital transformation
Multiple core pillars are involved in undergoing a successful digital transformation. Each of these should be integrated into a comprehensive strategy that considers the transformation as an integrated process, rather than a series of individual projects.
In fact, one common error banks make when upgrading their digital infrastructure and offerings is failing to coordinate digital initiatives. A true digital transformation is holistic, resulting in apps, infrastructure, digital systems and customer experience platforms that are all part of one coherent, consistent approach.
Data is at the heart of digital transformation. It’s through maximizing and optimizing usable data that financial institutions can truly make an impact on their ability to reach and connect with target consumers. Using data the right way means prioritizing security and privacy while taking advantage of opportunities to improve consumer targeting and engagement and personalization of offers.
Data can’t do its job if it’s not interpreted in a way that makes sense for your business. Quality analytics software and comprehensive analysis are what turn a set of disparate data points into usable information that informs smart decision-making and improves KPIs.
Machine learning is improving by leaps and bounds, and it’s only going to get more useful for businesses looking to increase the efficiency of their sales, marketing and engagement efforts. AI solutions are no longer a fringe tool but are quickly becoming part of the mainstream and a key component of digital strategies.
With the array of digital tools available today, it’s easy to lose sight of the main purpose of your business — connecting with people. Customers today expect digital engagement experiences that feel personalized and real, which is why a consistent, appealing digital customer journey should be top of mind in any digital transformation strategy.
How banks can benefit from the digital transformation
New, digitally native fintech solutions abound in the contemporary landscape. Overall, they tend to be highly competent when it comes to making the most of state-of-the-art tools like artificial intelligence, mobile apps and blockchain. By combining their brand longevity with a well-executed digital transformation, traditional banks can capitalize on their established reputations by reaching consumers with compelling offerings that utilize and are based on best-in-class digital tools and data analysis.
Banks can benefit from digital transformation in numerous ways. For one, operations will be more streamlined. For another, enhanced security will make customers feel more secure while minimizing losses from fraud. In addition, integrating top-of-the-line data and analysis will result in better overall decision-making. The ultimate goal? Boosting lead generation and conversion rates and improving customer onboarding while reducing churn, thereby maximizing the efficiency of budget spend across multiple departments, from marketing to customer service.
Ready to embark on your digital transformation? Experian can help
Implementing a digital transformation that truly improves your business can be a daunting task, but it’s achievable with the right partner. Experian’s connectable and configurable solutions and technology can help drive your digital transformation. With offerings like cloud platform solutions for scalability and flexibility and API access to bring all data and services together through a common access point, you’ll be well-positioned to move forward and take advantage of up-to-date technologies to serve your customers better.
Learn more about how you can benefit from the digital transformation in banking.