Financial technology companies have begun disrupting the market with cryptocurrency, bitcoin, blockchain, and more. In the United Kingdom, a new breed of banks called “challenger banks” have emerged, focusing on delivering digital-only services and exceptional customer interactions. In the United Kingdom alone, there are currently more than 20 challenger banks.
Forward-thinking banks have responded to these market disruptions by expanding their in-house capabilities. Others have partnered with fintechs to develop new digital offerings. And some simply acquired their competitors.
Banking Goes digital
Digital transformation looks different in every industry and every company. In general terms, it is the integration of digital technology into all areas of a business. That integration leads to fundamental changes in how the business operates and delivers value to its customers.
Banks running on a digital core can see reduced costs and streamlined processes. This end-to-end integration also helps provide a more seamless, engaging customer experience. And it makes room for further business transformation with new digital technologies like blockchain and artificial intelligence.
Going digital has also affected the banking workforce, with automation sometimes resulting in layoffs and staff reductions. But there is a growing demand for data scientists with banking experience—a skill set not easy to find in today’s market. It is time for the industry to develop a new workforce model to educate existing staff and recruit new talent.
Big Data and its impact on the customer journey
The banking industry is among the most data-driven of industries. Regulatory and insurance requirements mean banks must store many years of transaction data. The challenge is knowing how to translate that information into meaningful insights.
Big Data provides significant opportunities for banks to outshine their competition. Moving data onto a cloud platform provides a 360-degree view of every customer. This deep insight shows banks where they can provide a higher level of service and create more value. Big Data also allows the use of disruptive technologies like artificial intelligence, blockchain, and IoT to map the customer journey and gain a competitive edge.
Banks are racing to take advantage of market opportunities available through digital transformation. At the same time, they must manage the risks created by the new digital economy. There is a critical need for affordable computing platforms that provide greater agility.
There is no doubt new digital technologies are changing the banking industry.