How the Banking and Financial Services Industry is Preparing for Tomorrow?
Published on : Saturday 25-04-2020
With the evolution of Artificial Intelligence, Chatbots, Cloud Computing, and others, the banking and financial industry (BFS) is now making big leaps to digitalize the services it delivers. These days, the industry’s much attention has been on boosting return on equity (RoE) as most financial institutions face economic uncertainties, restraining regulatory environment, extreme competition, disrupting through technology, and overhauling legacy processes to meet changing customer requirements.
This is why many banks are now focusing on innovation by renovating and re-deploying savings from efficiency initiatives and strategic cost programs into investments, including in technology. In recent years, the rise in digital payments has seen a significant uptake in the number of digital-only challenger banks, which offer more agile services than legacy high street banks and glossier user experience.
Today, the banking and financial services industry is witnessing a continued and hostile focus on digitization. Moreover, with the leading players’ aggressive move towards digitization, the adoption of new and emerging technologies to bring in operational efficiencies, enhance speed-to-market, and deliver superior customer experiences are also climbing.
Financial institutions are chopping down spends on branches to invest in self-service digital channels because mobile and online banking is gaining rapid traction among customers. They are even looking to invest in digital wearable devices as it is making it increasingly feasible for banks to offer targeted services to customers. With the rising customer needs and competition, banks seek to adopt full-fledged digitization. In this respect, emerging technologies like AI and robotics are assisting banks to address these needs efficiently.
However, several pioneering companies in the banking and financial industry are already experimenting with multiple use cases of artificial intelligence in their operations. They are using technology to power chatbots and deliver round-the-clock, agile customer services, as well as for critical functions, including anti-fraud and regulatory compliance. In addition, technologies such as Robotic Process Automation (RPA) and machine learning are also assisting banks to replace labor-intensive, manual workflows with highly reliable, cost-efficient, and fast robotic operations.
While these technologies will benefit banks in the long run, it will result in a vastly different workforce that has a different skill set. According to reports, banking companies in the coming years will be looking for employees that can interact with customers in new and creative ways, and who are able to collaborate and express empathy. Indeed, to make this shift require more technical expertise to those who have the soft skills that will help banks in creating the services that will engage more customers.
So, it is evident that increased use of technology is the way that can aid banking and financial companies to drive digital transformation. But in our perspective, before turning to advanced technologies, banks must examine the fundamentals underpinning their core operations as customer preferences, demographics and lifestyles change by the time.