Saturday, June 10, 2023

Digital banking: Key technologies to watch out for


By Kaushal Verma

Digital banking has been gaining pace for the last couple of years and several technologies are being incorporated in the sector to shape it up for the future.

The pandemic has created a paradigm shift in business by changing the way people work, communicate, and even bank. This is further validated by the EY Future Consumer Index, according to which 43% of respondents believe that the way they bank has changed due to Covid-19.

Considering the lockdowns, restrictions, and safety concerns, customers had to switch to digital banking channels. However, the sudden increase in digital adoption poses quite a few challenges as most banks are yet to tap their digital potential due to inherent roadblocks such as operational silos, monolithic applications, and disjointed processes.

Although digital has been on the radar for most banks, it’s time to gear up to cater to the rising demand for digital banking services. With the right set of technologies, banks can expedite their digital transformation initiatives to significantly reduce time-to-market, modernize legacy applications, bridge operational silos, enable channel-agnostic and automated customer journeys, and deliver a personalized customer experience.

Key new-age technologies that can change the face of banking

1. Low code: Low code is a streamlined, visual, and guided method to build enterprise-grade applications. It helps banks become future-ready by bringing agility in operations and enables rapid application development and deployment through an easy-to-use interface and drag-and-drop tools. Using low code applications, banks can streamline and automate various processes such as customer onboarding, service request management, retail and corporate lending, trade finance, and others.

2. Artificial Intelligence (AI) and Machine Learning (ML): AI and ML capabilities can bring intelligence to banking processes, enable smarter decision-making, enhance customer experience, and prevent fraudulent transactions. According to Forbes, “70% of all financial services organizations are already utilizing machine learning to forecast cash flow occurrences, fine-tune credit ratings, and detect fraud.” AI and ML can empower banks to map user trends to provide personalized loan offerings, reduce credit risk, and drive contextual customer interactions.

3. Cloud computing: According to a Gartner forecast, “cloud-native platforms will serve as the foundation for more than 95% of new digital initiatives by 2025 — up from less than 40% in 2021”. Cloud can enable banks to deploy state-of-the-art digital services with minimal IT bandwidth. Furthermore, banks can gain unprecedented scalability through cloud-native technologies like containerized architecture and microservices.

4. Process intelligence: It becomes difficult for banks to extract meaningful insights from high-volume transactional data. Process insights can help banks deep dive into this data, gain valuable insights, manage bottlenecks, and make intelligent decisions.

Accelerating digital with a unified digital transformation platform

New-age technologies can help banks achieve their digital goals but not in isolation. Banks need to undertake a platform approach while leveraging these technologies to make the most of their investments.

A unified digital transformation platform enables banks to harness these modern technologies – low code, cloud, AI, ML, RPA, and intelligence – along with intelligent content automation and customer engagement capabilities. Thus, allowing banks to streamline processes, enable customer journeys, deliver an omnichannel customer experience, and be future-ready.

Here’s how a unified digital transformation platform backed by modern capabilities can help banks fast-track their digital journey.

  1. Delivering personalized experience

With a data science platform, banks can gain visibility into the processes and enable customer journeys by cohesively integrating functions, systems, processes, and people. The platform allows banks to leverage user behavioural trends and data to deliver personalized recommendations and offerings. Moreover, an AI-enabled virtual financial advisor and self-service portal enable intuitive and quick responses to customers queries, enhancing the overall customer experience.

  • Modernizing legacy applications

Monolithic applications and legacy systems make it difficult for banks to cope with ever-increasing data volumes and hamper the time-to-market, hurting overall digital initiatives. Leveraging a low code-based platform, banks can enable rapid application development to meet ever-evolving market and regulatory needs.

  • Enabling smooth remote operations

A digital transformation platform allows banks’ employees to collaborate virtually and communicate with customers via their preferred channels. The platform backed with new-age technologies allows any time, anywhere availability of services. Furthermore, it helps banks deliver a contactless banking experience and enables online customer onboarding, automated loan origination, e-KYC, video KYC, and more.

  • Enhancing operational efficiency

In an increasingly competitive environment, banks’ operational efficiency becomes a prime focus. A unified digital transformation platform acts as a one-stop solution as it enables end-to-end process automation and unifies front and back offices, enhancing overall efficiency. Furthermore, it facilitates seamless integration with third-party systems, improves adherence to service-level agreements, reduces turnaround time, and enables straight-through processing via robust rules management engine.

  • Meeting growing customer expectations

Tech-savvy customers expect instant services and omnichannel customer experience. To meet the increasing demands of customers, financial institutions must continuously innovate and offer the best-in-class services. With a digital platform, financial institutions can offer various customer-centric features such as digital KYC, e-signatures, e-stamping, online mandates, etc.

To conclude

According to a Gartner report, “70% of new applications developed by organizations will use low-code or no-code technologies by 2025, up from less than 25% in 2020.”

The pandemic has created a sense of urgency for banks to accelerate their digital initiatives. By opting for a low code-based digital transformation platform, banks can become future-ready and stay competitive.

Also Read: Investing in Cryptocurrency? You should know this

(Kaushal Verma is the Head of Banking Practice, Newgen Software Technologies Limited.)

(Disclaimer: The views expressed in the article above are those of the author’s and do not necessarily represent or reflect the views of Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.)


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