7 Reasons Financial Sector Should Embrace IT
Technology has transformed the way we bank from brick-and-mortar to ATMs and smartphone banking. From trading on Wall Street to trading by the pool from an iPad or a mobile device. These disruptive advances have given customers and investors greater convenience, autonomy, security options, and agility in their financial lives.
Technology will continue to reshape the banking landscape as well as IT services for financial sectors at an accelerated pace, partly due to the current health crisis and partly due to new customer expectations. Competition has given consumers greater physical mobility, control over personal banking, securities trading, and even financing for auto and homeownership.
The future of the financial sector has been transformed by digital technology influenced by the success of business strategies across the financial sector. Is your business ready for the next transformation?
Let’s look at the biggest financial sector transformation trends to watch for in the years to come
Digital Transformation Trends in 2021-22 for the Banking and Financial Sector
- Mobile Banking
Mobile banking offers a variety of benefits to both banks and customers. Easy to use mobile banking apps provide the greatest value to customers, i.e., banking on the users’ own terms. With 24/7 service availability and negligible waiting periods, customers now prefer digital banking for everything from making payments and transferring funds to applying for loans.
The banking industry itself is benefiting from mobile banking in terms of reduced expenses, more security, increased ROI, and the ease of gathering customer analytics.
Highly visible companies, including Visa, JPMorgan, Tesla, and AIG, have tinkered with blockchain concepts in their own businesses. There’s great potential for new types of transactions to tackle issues traditional markets haven’t managed to resolve. RegTech is helping financial companies ensure leaner regulatory processes, including monitoring, reporting, and compliance. The potential applications of blockchain in loan processing, digital payments, and escrow facilities are in deliberation.
The act of mining virtual currency could involve simulations for protein folding (for things like cancer and vaccine research), machine learning (for image processing, recognition, or rendering), and distributed storage solutions. There’s tremendous potential for growth and disruption with positive social benefits.
- Big Data
Big data exists across all industries. Insights obtained through analysis can lead to new opportunities. The financial sector is embracing digital transformation with the goal of tapping into big data’s potential. The many ways banks can leverage these insights include using them to create personalized experiences for the customers. IT services for the financial sector can help banks automate processes and save IT stafffing from redundant tasks.
- Automated Wealth Managers
Also known as robo-advisors, automated wealth managers have quickly become mainstream since the introduction of Artificial Intelligence (AI) in the financial sector. Wealth bots are a low-cost option to help customers seeking guidance on passive wealth management. The bot’s algorithm can calculate the best interest rates, loan providers, and investment strategies. Some automated investment tools can even curate investment portfolios and provide that data to human advisors.
Need of IT Services in the Financial Sector
- Thinking about the Future
Business size or a financial slowdown no longer dictates the future of a company. Many startups that had humble beginnings are now million and billion-dollar firms, SoFi and Ant Financial to name a few. For established banks and financial institutions, this means more competition and a need for forward-thinking to stay relevant in the market.
Traditional banking institutions are facing disruption by a new wave of FinTech innovations. For example, the major factor behind delays in loan approval was traditionally the Know Your Customer/due diligence process. Start-ups utilizing big data and AI can shorten the loan approval process to 10 minutes. This innovation is pushing incumbent firms to acquire these start-ups or hire IT support services to meet the changing demands.
- Enhancing Customer Experience
Customer experience in the financial sector is not merely limited to customer support and troubleshooting services. Customers are prioritizing low and no-hassle access and ease of use when interacting with financial institutions.
As a result, the customer equation has changed dramatically with services migrating to cloud or web-based interfaces frequently and trending mobile applications. Your app and web interface must not only look attractive but also deliver relevant information on-demand.
- Managing The Current COVID Crises
While the pandemic negatively impacted many industries, the tech world experienced the opposite effect. Abrupt imposition of lockdowns and social distancing inspired many users to switch to online financial services and adopt digital banking practices for the first time. For retailers, the battle to capture sales shifted online, giving rise to eCommerce platforms and online or contactless payments.
- Staying Ahead of Competition
To deliver a smoother customer experience, businesses need to ensure that digital transformation is engrained in the corporate culture Companies must extensively research and fine-tune the user experience using quantitative and qualitative methods. This information can be leveraged to continually improve the financial services offered and enhance the experience for the user.
- Reducing Costs & Improving Productivity
Automating traditionally labor-intensive tasks like fraud detection, credit scoring, and risk analysis reduces the costs of doing business and allows for greater scalability as a company grows. These are just a few areas where AI’s introduced efficiency by freeing your human resources for critical projects and improving productivity.
- Transforming Customer Experience for the Better with Artificial Intelligence
Customers today gravitate more toward services that offer a smooth digital experience. To this end, automated chatbots can wonder to save customers that would traditionally require human intervention. Chatbots stay available 24/7 and can be updated to handle common inquiries related to new policies or adapt to seasonal needs.
- Stronger Privacy / Security
As the public becomes increasingly aware of privacy issues affecting their personal data, these concerns extend to individual financial interests as well. The collection of user data in the age of digital transformations have raised concerns about its ethical use. Public arguments between non-financial companies like Apple and Facebook have brought discussions about personal privacy into everyday discussions. It’s become increasingly important to address potential security issues internally before they become public scandals. Every part of your business deserves a thorough security analysis.
Here at VLink, we help to shape the future of effortless digital transformation across financial institutions of all sizes. Our IT services equip workforces for the future of the financial industry. We help organizations assess their business risks and deploy cloud-based solutions and technology-led transformation.
Our goal is to make IT transformation a breeze while navigating through critical challenges. We take care of everything from government regulations and compliance to cybersecurity, enabling your firm with solutions to help scale, boost productivity, and create superb customer experiences.
Call VLink today and find out how we can put our experience and expertise to work for you and your company!