Five reasons to adopt digitalization by banks & financial service industry

As the financial and the Fintech services in the west and in Northern America improve, the rest of the world is also meeting up with the revolution. Financial services in Asia and other parts of the world are witnessing a challenging phase and the transition to adopt a technologically evolved financial services platform is gradual yet steady. The financial service industry has to cope with the new regulations and governing rules, while also improving customer happiness and satisfaction. APIs, cloud, AI and other aspects have made the financial service and applications fast, nimble and lightweight respectively. The whole financial service industry is changing its home from the old brick-and-mortar institutions to the modern internet world. The size of financial channel has today decreased to attain the size of your palm, in the form of your smartphone.

There are multiple reasons that would propel the banks/financial service industry to adopt digitalization. Here are five of them:

A larger customer base

While banks still have a large customer base, the demands of customers is rapidly changing in the modern age. Customers in all parts of the globe appreciate the benefits of the digital financial services. They find it easy and convenient to invest, borrow, lend and purchase online and to make the most of their free time. The Fintech platform enables them to be financially active no matter where they are. Hence, any bank, NBFC or any other kind of financial institution which does not goes digital will be losing a large part of its existing and future business.

Better Services

Banks have now become around five times more digitally proficient. They can now offer many more new products, create and sell them easily, automate the processes, improve the compliance with rules and regulations and make their customers happy. The earlier a bank adopts the digital technologies, the better it is for its competitiveness. The financial software service providers offer a host of products, tech and featured services that are tailor made for different kinds of banking and financial operations and choosing the best option will help you garner customer trust and large market size.

Regulatory compliance

The payment gateways are already governed and administered by the PCI DSS (Payment Card Industry Data Security Standard) rules. They are relatively new and their size and worth is still growing, and hence with time, rules and regulations will improve. Still, the Fintech services in itself help a financial institution better comply with the norms and rules. The automated, digital and robotic processes witness very few instances of frauds and scams and as the human involvement decreases, the banking operations will become more secure.

Increase in profits

Adoption of the new financial digital technologies will reveal that your bank or financial company takes a lead in adopting innovations, and will bring to you a more favorable market reputation. As time will see, you will be able to attract more of the customers who will surely demand the Fintech platforms and services. These clients will be from both consumer (B2C) and business (B2B) sector. Estimates reveal that the banks who forgo the opportunity of going digital will lose more than 35% of their existing business in the near future. Those who go by the trend and improve their services technologically will see an increase of around 40% in their net profits in the years to come.

Better analytics and personalization

Going digital will ensure that most of the data required towards analytics and forecasting is available, and it helps create personalized financial products as well. A bank will be able to cross-sell, up-sell and can offer better targeted offerings by going digital. Agile development, rapid experimentation with the new products, and user centric services are only some other benefits of going digital, for a bank. While the cost may seem heavy as of now, the return of investment is immense.

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