By: KrishnaRaj Sharma
Adoption of technology in financial institutions has increased pace rapidly with the onset of the unprecedented Covid-19 pandemic. Traditional ‘brick and mortar’ business models are being quickly replaced by ‘click and mortar’ financial services. Adoption of Digital Transformation in the BFSI sector, especially banking, has brought about several advantages to all stakeholders, most importantly enhancing customer experience along with significant savings on costs, time and resources for banks.
However, a few challenges remain with the implementation of the digital transformation in the financial sector that has to be addressed for efficient functioning of the new systems and processes.
Disconnected technologies for selective services is inefficient
Some banks have digitalized only select few aspects, such as couple of online portals and mobile applications as part of their marketing strategy. With customers largely interacting online for banking than before and demanding fast services and responses, financial institutions are now forced to build technologically agile systems and operations. They have to opt for complete transformation digitally across all channels, both internally and externally to deliver seamless and integrated omni-channel customer experience.
If the bank is not meeting the customer’s requirement or if the online services are not convenient and integrated, the chances of losing customers to competition are very high.
Shortage of digitally-equipped workforce is on the rise
If the financial institutions have to engage employees effectively in a digital workplace, they have to empower the workforce with necessary skillsets. The management has to create learning opportunities for employees on the new digital work culture, related processes and new nature of product offerings. With adoption of AI, IoT, DevOps, Analytics and Blockchain among other technologies, banks have to recruit workforce with these competencies to develop new solutions. On the other hand, deserving employees can also be re-trained with up-skilling programs to bridge the skill-gaps. With appropriate up-skilling and re-skilling, mid-career and long-term employees can become competent to work alongside AI and other automated new-age technologies.
More attention should be paid to customized offerings
Traditionally banks and financial institutes would develop products and offer them to a larger audience, irrespective of the age, gender or profession. Such business strategies are obsolete and the banks should understand that and sell only customized products to specific target group, for better business outcomes. This can be easily achieved by deploying predictive analytics solutions to understand customer’s real requirements and catering to them. If this methodology is not implemented, customers will not hesitate to move on to a competitor who is offering the product they require. Customer feedback after the sale of the product should be taken in real-time and issues, if any, should be addressed immediately.
Weak deployment has adverse impact on businesses
Many leading and mature BFSI players are yet to opt for a complete digital transformation of the organisation, due to their reluctance to take risks. However, on the other hand, today’s digitally-savvy customers expect banks to understand them and demand instant services, unlike earlier times. With constant pressure on financial institutions to configure and deploy agile systems and processes, they should avoid getting into a misguided trap of opting for a faulty or ineffective digital infrastructure. Such occurrences will lead to both finance and brand image getting hurt, among other associated risks. It is important for the BFSI sector players to partner experts in digital transformation where the latter also has deep knowledge in the banking business and compliance and take a holistic approach to configure and deploy the solution, keeping in mind not to impact critical business functions. The solution provider should have had sufficient experience of proven successful implementation and support in on-going maintenance too, going forward.
We are living in an era where even technology, fintech and ecommerce companies are offering financial services and attracting customers. It is therefore imperative for PSUs, co-operative and commercial banks, insurance companies, NBFCs and other companies in the BFSI sector to configure and implement a profound Digital Transformation strategy. This has to be tailor-made to the respective financial institution’s requirements and support in business continuity, faster growth and be able to counter competition from outside the sector.
(The author is Director and CEO at iValue InfoSolutions and the views expressed in this article are his own)