Digital transformation in banking and financial services
The role of digital transformation in banking operations
As reported by the World Bank (WB, 2018), digital transformation will help the bank develop electronic products and services such as financial technology companies. The application of digital conversion in banking operations will reduce personnel, reduce transaction documents … thus, it will reduce processing costs on the digital system. According to a study by Shahar (2017), a digital bank specializing in real estate loans has cut 70% of the processing cost on each loan.
Why are banks going digital?
The digitization of the bank helps the bank meet the increasing expectations as well as the trend of transactions on electronic devices of customers, simplifying processes, processing procedures, improving competitiveness, cut down the costs.
The bank’s challenge in digital transformation
Research by the International Payment Bank (BIS, 2018) shows that the bank will face challenges in digital transformation such as: Difficulties in attracting talents; Ineffective leadership; The lack of cooperation in business units; Complex data structures; Lack of governance and decision making; Lack of decisive talent in the enterprise; Corporate culture; Limitations of information technology …
In addition, Deloitte (2018) ‘s research presents a big challenge for the bank is old technology, backward. Currently, many banks are operating on systems built in the 1980s, with low processing speeds, isolated data, and high maintenance costs affecting the bank’s business. To limit this drawback, the bank can use application programming interfaces to integrate data across product groups without necessarily having to replace the core banking system immediately. collect, analyze data, better understand customers so that there is a plan for module conversion for each stage.
Steps to digital conversion to become a comprehensive digital bank
According to Mersch Research (2017), there are 5 steps to performing a digital conversion as follows:
Step 1: Assess to understand the steps of application and technology.
Application of financial technology in the digital transformation of banks today – Photo 1
Before the digital transformation is carried out, the bank must assess the cost and performance of existing applications and technologies to identify technological weaknesses and financial waste. Currently, scientific data analysis platforms automatically monitor and manage technology on the system, which can help detect operational problems early and optimize technology spending.
Step 2: Simplify infrastructure, applications, and processes based on the insights gained from understanding the application and technology steps.
The use of redundant, duplicated, or inefficient technology systems increases operating costs, reduces efficiency and stagnates the banks’ ability to innovate and innovate. Therefore, simplifying the infrastructure, applications and processes will help the bank redesign to fit the comprehensive digital banking model.
Step 3: Accelerate the innovation process through module platforms.
The module platform that integrates application programming interfaces also contributes to the integration of the banking system with the application programming economy. The bank can also choose modules and application programming interfaces based on its business priorities and desired speed of modernization.
Step 4: Design processes and applications based on acquired experience.
The design of a bank should be based on an in-depth understanding of customer behavior and usage to further innovate the services and focus on the customer experience. Data analysis science platforms can help simplify and optimize the application of big data by providing built-in and easy-to-use analytical solutions for corporate customers.
Step 5: Develop new applications that can support new business models, product portfolios and new distribution channels.
The Bank focuses on building new, smart banking applications to create a leading-edge in digital technology applications. Develop innovative and intelligent applications that allow the bank to attract new customer segments to create new revenue streams.
About InApps Technology
InApps Technology is more than a software development company—it is a dream of Vietnamese developers. Our passion for technology inspired us to start InApps with the desire of helping Start-ups and SMEs successfully utilize technology to growth hack their business.
We are an outsource and offshore software development company to help international clients increase their software development capacity and efficiently turn their ideas into working products, in terms of cost-effectiveness and low attrition.
View our case studies for Finance App: https://inapps.net/finance-app/
Banking App case studies: https://inapps.net/banking-app/