Embracing Change – How Banks are Adopting Digital Innovation

Digital Technologies are creating an unprecedented disruption across the banking sector. Digital technologies have radically transformed the way industry operates accelerating the shift to automation. The technological advancements are enabling the banks to meet the customer expectations delivering enhanced services. Digital technologies have unleashed the potential of the banking industry to enable 24×7 online access to the services.

Evolution of Digital Banking in India

In the late 1980s, the need for computerization was recognized in the Indian BFSI sector to deliver exuberant customer service.  To address the introduction of computerization in the BFSI sector, the Reserve Bank of India set up a committee in 1988.    

The banking industry transformed drastically from computerized records to digital banking. Post computerization, banks adopted core banking solutions to deliver service excellence. With core banking solutions there was a transition from branch banking to bank banking. Core banking solutions enabled banks to offer customer convenience through “Anywhere and Anytime Banking.”

The rising competition between private and foreign banks compelled the financial institutions to leverage digital services to stay competitive.   

In April 2016, the Indian government launched the UPI system ensuring easy money transfer to and from banks. The dawn of the UPI system introduced Mobile banking in India that kicked up a digital revolution. Before 2016, mobile banking was offered only to account holders. In the present scenario, UPI made it easier to open an account and make transactions via a mobile phone.

For security reasons the government initiated the process to link the Aadhaar number with bank accounts to ensure the person who owns the account can only access it. Today, digital banking has made it convenient to create and access a bank account eliminating the need to visit the bank branch.

The introduction of UPI and BHIM by the National Payments Corporation of India laid the foundation of innovation in the domain of Payment systems.

Prioritizing customer needs to ensure a fast, accurate, and quality banking experience, the Indian BFSI industry is leveraging digital technologies to ensure an exuberant customer experience. Integrating digital technologies in the BFSI industry implemented electronic payments system, Time Gross Settlement, Cheque Truncation System, Mobile banking system, and internet banking.

What is the Role of Digitalization in Banking?      

Digitalization has brought a great transformation in the BFSI sector. With Digital Banking Solutions, there has been a transition from manual to automation in the banking industry. The transition to digital banking services has minimized the errors caused due to manual intervention.

1. Enhanced Customer Experience:

The Digital Banking Solutions have enabled the banks to deliver an Omnichannel banking experience facilitating customer-centric services. Digitalization in banks offered analytical insights enabling products or services to be tailored to users based on their preferences, behavior, choice, and financial health.

2. Grab New Prospects/ Customers:

Consumers are migrating from traditional banking to online banking for convenience in accessing transactions and services. With the growth in digital banking customers, financial institutions have witnessed an increase in the number of customers.

3. Enhanced Process Efficiency:

Integrating the advanced technology solutions with the banking solutions, banks aim to improve the efficiency of the manual processes. Implementing the digital processes, banks have reduced the errors due to human intervention delivering an exuberant banking experience to its customers.

4. Cost Reduction:

Digital payments and cashless transactions have enabled banks to save infrastructure costs. With automated banking, the operating cost of the banks has dropped enabling them to charge low service charges delivering high-interest rates.

5. Insightful Decisions Based on Data:

The digitalization of banks gave rise to huge volumes of information being generated, where data plays a crucial role in dynamic decision-making. With advanced technology solutions, banks have started using customer databases to enhance their decision-making.

How is Digitalization Delivering Omnichannel Banking experience?

In the present scenario, consumers expect banks to deliver Omnichannel experiences. With Digital Transformation, financial institutions are delivering seamless banking experiences to their customers on all mediums, devices, time, and places. Omnichannel banking offers the customers to migrate between the channels without fragmenting their journey through digital mediums. An Omnichannel platform enables real-time data synchronization, flexible banking experience, and convenience to its customers.      

According to a survey, the percentage of customers using digital banking is increasing every year but some customers are likely to go with the face-to-face services at the branch.

What are the Benefits of the Omnichannel Banking Platform?

  1. Quick Problem Resolution: The digital platforms enable the issues to be raised and resolved quickly through online interactions. Omnichannel banking is more efficient and quick as compared to face-to-face banking in a branch. 

  2. Reduce Support Costs: Online tools like chatbots resolve simple and straightforward customer queries enabling the advisors to be more focused on complex inquiries.

  3. Personalized Experience: A single banking approach to all the customers is outdated in this digital era. The omnichannel platform offers more flexibility with digital services ensuring the

  4. Customer Loyalty: Quick response and improved tailored experience deliver enhanced customer satisfaction enabling customer loyalty. Customers experiencing exuberant services will be loyal customers.   

Wrap UP

Digitalization has transformed the BFSI sector driving the transition from manual to automation. With digital technologies, banks and financial institutions are delivering a seamless banking experience to their customers.

The Dx enablers like ESDS-the Digital Transformation Catalyst offer Digital Banking Solutions delivering an Omni-channel banking experience.       

Priyanka Chaudhari

 

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