While financial companies are instituting digital strategies to remain competitive and relevant, consumer expectations are continually advancing. Fintech startups and Big Tech firms have started to fill this void by providing consumers with more vibrant and more immersive products through interactive, easy-to-use apps.
These new players took a bite out of the profit margins of the traditional financial firms. Nowadays, these firms need to be innovative and think more innovatively if they want to remain relevant.
New-age innovations have created a range of incentives that will enable continued growth. Companies may use social media, cloud, big data and analytics, machine learning ( ML) and artificial intelligence ( AI) to optimise operations, boost user service and launch new goods.
To this end, though, they need to reconsider conventional innovation models. New research on disruption should see banks adopt the best technology approach to achieve both their short-term and long-term objectives.
Making innovation a reality
The keyword is innovation as banking activities witness a digital facelift.
When innovations become state-of-the-art, financial firms are constantly vying for more of the pie. Also, banks are at a dangerous junction by more recent payment forms, digital wallets and cryptocurrency.
Banks need fintech companies to stay away from the competition, consider the changing dynamics of the industry and meet their digital requirements.
Banks need fintech companies to stay away from the competition, consider the changing dynamics of the industry and meet their digital requirements.
Traditional financial institutions can provide a much-needed boost by collaborations with tech companies. This relationship helps them to focus on their core skills and to give their customers digital advantages. Technology companies have innovative laboratories which focus on developing customized solutions through randomized controlled trials ( RCT), for example, to add value proposals and to extend customers to new areas.
Tech enterprises often require banks to remain open to compliance risks and conditions. To ensure their detailed and rigorous regulations and mandates, the Payment Services Directive and the GDPR have been regularly revamped. They are undergoing modification.
New-age fintech technologies are also critical for banks not to be penalized and corrective measures to stay up to date with their regulatory needs. The quality of customer data can play a decisive role as digital technologies help to tie business results with customer journeys.
Indeed, the Ernst and Young survey shows that 93 per cent of banks consider improved data quality to be their significant risk management priority in the next 3 years.
Cultural transformation strategy
The provision of innovative customer experience is critical for an external approach and gradual transformation of the corporate culture. To do this in practice, you must track the trends of the customers and tailor the products and services that you gather.
The constant sensitivity allows organizations, in the end, to deliver customer-friendly services.
Indeed, BCG research indicates that AI will use the data collected from various platforms and channels to improve customers' sales growth by $ 300 million per $ 100 billion of assets.
For the creation of goods or services that the current clients most pursue, the actionable insights generated from the combination AI, big data and analytics are essential.
Banks have been using chatbots and voice bots in customer-facing positions for developments in robotic process automation (RPA). The increased reality and virtual reality should also enhance customer experience by allowing banking branches and ATMs to be located close to them.
Further development in the internet of things (IoT) and cognitive computing would in due course, allow machines to interact more freely with each other and other stakeholders. To deliver the sacred grail of customer experience, financial firms need to work towards full 360-grade visibility of their customer profiles: genuinely personalised services.
A broader cultural impact
Financial services organizations can achieve sustainable development through the enhancement of their corporate culture.
The aim is to increase digital investment, develop the capabilities of the workforce, enhance sales and marketing strategies through strategic analysis, and reinforce collaboration processes. The same applies to other types of financial services, such as lending, borrowing and saving. For these fundamental shifts, leaders would need to concentrate on formulating sustainable development plans with a long-term vision.
