A new wave of digital technology has transformed the BFSI landscape in the past few years. While mobile and social media have forever changed the way in which banks interact with customers, analytics has enabled banks to make hyper-personalized offers to customers.
In addition to this, cloud technologies have also shifted the scenario from Capex models to more flexible Op-ex and have thus enabled the delivery of multiple processes from a variety of third-party platforms.
Adoption Of Technology In BFSI
While all these changes in technology fared great benefits for the BFSI sector, the second phase of transformation is now set to influence a deeper change.
This second phase of transformation would deal with more influential technologies such as robotic process automation (RPA), the Internet of Things (IoT), artificial intelligence (AI), open banking platforms, shared infrastructure, and blockchain distributed ledger systems.
These innovations are now set to power the BFSI industry and will reshape how financial institutions will operate and evolve in the coming years.
Trials And Implementation
Several trials of the new technological innovations are already taking place across the financial and banking services industry. While on one hand industry leaders are showing a keen interest in small-scale incubation and research, several organisations are already dedicating their funding to develop use cases powered by the new advancements in technology.
Banks in the U.S. are already incorporating cloud-based services to provide their customers with end-to-end cashflow services. Many leading industry players are also reducing settlement costs by using real-time distributed ledgers, while others are using blockchain to secure their document transfer.
The value discovery undertakings and sustained experimentation being invested in by financial institutions are proof of the fact that technology is already driving transformation in the BFSI sector.
Optimized Customer Service
Financial institutions are now optimising their call centre operations to reduce operational expenses while at the same time improving customer satisfaction. To fulfil this purpose, organisations are now incorporating speech transcription into their framework.
They are also using natural language processing to classify the type of calls, structure data into groups, and then develop different sentiment measures that would allow them to better segregate the nature of queries and how they could automate their immediate address.
In addition to this, predictive analytics has also allowed banks to make a generalisation of the customer behaviour on the basis of interactions made by their call centres. This helps them in developing strategies that improve overall customer outcomes.
Not only does predictive analytics helps the bank in developing more sound strategies, but it also reduces the volume of call centres, thus resulting in savings in operational costs.
Mobile Banking As The Game-Changer
While digitalisation of banking is not a new development, the coming years will see mobile becoming the epicentre of digital transactions and banking operations. As technology improves and tablets and mobile phones become even more widespread, customers will resort more and more towards mobile phones for their banking processes.
In a study conducted by the AT Kearney group, about 85% of banking executives stated that mobile technology would be the new cornerstone of their digital strategy since it will quickly replace computers as their first touch point.
The transaction volumes for mobiles are already overtaking other mediums across all channels, and customers now have eleven times as many contacts through their mobile phones as opposed to those made on standard computers.
AI And Blockchain To Be The Frontiers Of Innovation
A report from Synechron stated that AI and blockchain will continue to drive change in the BFSI industry.
While AI development will focus on developing more cognitive sales and marketing strategies, investments, and wealth management decisions, blockchain, on the other hand, will be incorporated with robo-investors to drive a more centralized fintech platform for wealth managers.
This will be a significant step for the BFSI sector as it would then move forward from R&D in advanced technologies like predictive analytics and machine learning into measurable growth in cognitive computing.
The second phase of technological transforms will not only impose a secular change in the BFSI ecosystem, but regulatory actions associated with the industry will also improve collaboration among several financial institutions. The changes brought about by phase 2 of digital transformation will be a constant evolution, one accentuated by the introduction of several incremental innovations.