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Digital Transformation in the Financial Sector

 

Throughout the history of humanity, significant milestones have marked the evolution of humans as a whole; this era of digitization is no exception to the pattern.

Implementing computerization processes involving robotic activity and the capacity for simultaneous processing of vast amounts of information had started before the beginning of the current digital period. The new “now” has created an assortment of channels to share data and global dynamics with massive numbers of participants in business models and social initiatives, never seen before, totally transforming life and behavior characteristics.

 

The digital transformation has already taken place. It continues its course open and eager to assimilate all possible technological advances, which facilitate your life, make it more pleasant, fast, and safe.
As a whole, the environment created a unique possibility for the emergence and consolidation of business initiatives called Fintechs. These technology companies’ agility to respond and offer new approaches to the inexhaustible financial market, which required innovation and regulatory changes to accommodate the modern era, empowered them both in the proliferation of successful services, attracting high customer volumes and low costs.

Traditional financial institutions are aware of the alert they were receiving; they tried to react. Still, their response was not the most agile: this is due both to technological issues and mentality ones. Jumping into the future is not only a due choice but also a matter of shifting point of view. On the other side, the new players in the market, the Fintech, were leveraged in innovation and technology, evolving to what we know today as big data, mobile technologies, cloud computing, data analytics, artificial intelligence, digital payment, etc., but always focusing on the consumer. In the first instance, the traditional financial sector saw Fintech as competition, later excellent strategic alliances have emerged, which have driven the digital transformation into a new income opportunity.

Financial institutions will need to find technology partners for their Digital implementation to cover these main areas:

THE USER EXPERIENCE. Digitization provides the necessary technological elements required by financial institutions to give the user the most important place. Putting the client as the center of attention will force omnichannel mobility, flexibility, speed, security, and simplicity.
THE INCREASE IN THE NUMBER OF CLIENTS. Imagine increasing your client’s base without the fear of losing them because of other Apps come to the market. Currently, the offer of digital applications to access financial services is abundant and very competitive; Therefore, this forces financial entities to be ahead or at the same level as the market.
HIGH EFFICIENCY IN THE PROCESSES. Digital transformation is a complex process that can be made simple, depending on the management approach. It is essential to have a flexible back office, which guarantees the assimilation of changes in processes proposed in user applications. The implementation market lead technologies will facilitate operations and deliver services in an efficient manner, such as the digital signature to validate documents, biometric tests, remote opening accounts, deposits, transfers, and real-time compliance.  Executing these processes successfully, safely, and with much higher volumes is a great challenge, which only would be achieved with the right changes and implementing a robust core banking partner.  Although many approaches today offer various alternatives, ensuring an internal match to Core functionality is a massive weakness for innovation. Technological evolution must lead the institution to have and guarantee; all the processes’ improvement and efficiency, thus achieve greater compliance.
COST REDUCTION. Implementing a successful digital transition must also focus on cost reduction. Automated processes and activities supported by officials, larger volumes of transactions in shorter times, electronic payments, automated digital communication with the client in higher percentages, tendencies to zero errors in processes, allow focus efforts of the different resources on productivity and the creation of new products, leaving the executive operational responsibility to digital technologies.
CAPACITY TO MAKE THE RIGHT DECISIONS The comprehensive digitization processes meet their specific administrative, operational, and commercial functionality. They also generate the ability to handle large amounts of first-hand information, which is consolidated as an asset for the institution and its analysis allows the improvement of processes and the creation of new products with approaches coinciding with customers. It is important to bear in mind that one of the strengths that have allowed large technology companies’ exponential growth is data management to make faster decisions.

 

Beyond regulations, towards evolution: a new mindset

Nevertheless, financial institutions are committed with regulators to safeguard and improve their operation’s transparency, control, and efficiency. The digitization process allows for real evolution, which also assimilates new generations of products and services and guarantees their safe operation. Therefore, having the right Core Banking’s assistance will more than be beneficial. Thus, the involvement of the financial institution executive level and institutional leadership is necessary.

Users do not have rigid schedules to communicate and access information; they want the same from their bank any-where at any-time. The digital transformation is the product of the interpretation of the client’s needs and the institution’s capacity to offer them.

VisiFi can translate this entire process into implementation and operability; managing in compliance the efficiency and profitability that the financial institution requires.

All this without limiting innovation, creativity, and technological business agility. The financial institution will appreciate it as it efficiently meets its objective and profitability. Determining the best option in Digital Transformation requires establishing its modern profile, considering its existing platform. Managing innovation is something connected with knowledge and partnership: that is how we interpret our role in designing new ways of supporting this industry’s evolution. 

John Cetina
Chief Strategy Officer Card & Payments