Banks need to stay ahead of the curve. The competition is fierce, with the threat of fintech startups luring customers away with digital payments and services, traditional banks need to remain attractive. That means both retaining current customers and attracting new ones by offering compelling products and outstanding customer experiences.
Regulatory changes are also driving innovation. As one of the most highly-regulated industries, banks need to protect customers while remaining competitive and keeping up with the ever-evolving regulatory landscape to ensure long-term sustainability. That means enhanced security and minimized risk.
Thankfully, automation technology is making it easier and more cost-effective for banks to innovate and offer new products and services.
Five reasons why banking innovation is crucial:
To stay competitive:
Banks need to constantly innovate to remain competitive in a crowded and constantly evolving industry. Fintech startups are actively leveraging new technologies such as AI, machine learning and advanced data analysis to offer advanced services to their customers. Traditional banks should look to do the same to remain competitive. Offering the latest products and services through technology will also help with reputation and brand image, which helps to retain customers with positive reputation.
To meet the changing needs and expectations of customers:
With advancements in technology and changes in consumer behaviour, customers expect more personalized, seamless and convenient banking experiences. Digital convenience is a leading factor, with customers wanting to manage their finances on-the-go using their mobile phones, but still have the options of being able to visit branches or ATMs. So banks need to offer an omnichannel experience that offers consistency and real-time updates.
To improve operational efficiency:
Innovations in banking can help automate manual processes, reduce costs, and increase the overall efficiency of banking operations. Automation technologies can help to reduce errors, speed up tasks and free up employees to focus on higher value work. Digitizing documents and data can help with data accessibility and management, with optical character recognition (OCR) enabling the digitization, storage and retrieval of information in a secure and efficient manner.
To reduce risk:
Cybersecurity is at the top of everyone’s mind when it comes to digital banking. Innovation can help mitigate risks associated with fraud, cyberattacks, and other potential threats to the banking industry. Machine learning can be used to identify fraudulent activities, while biometrics can be used to enhance access security.
To create new revenue streams:
By introducing new products and services, banks can create new revenue streams and tap into previously untapped markets. This is particularly important as it is now outdated to charge for services such as transaction fees, and making such charges could risk losing customers. Partnerships with fintech firms and exploring cross-selling and upselling opportunities are an effective way to generate new revenue.
How automation enables innovation in banking
Data orchestration
Automating the collection and consolidation of data is a key task for banks who want to innovate, as it provides a unified and comprehensive view of their data, which can be used to gain deeper insights, better understand customers and monitor potential risks.
With data effectively orchestrated, banks can run advanced analytics and even integrate technologies such as AI to uncover valuable insights, personalize customer experiences and identify opportunities for growth and innovation.
Orchestrated data also provides the foundation for real-time data processing and analysis. Real-time capabilities support fraud detection and personalized recommendations. This in turn can enhance the customer experience with tailored offerings. This helps in all aspects of the customer experience, from onboarding, through to ongoing personalized interactions.
Create modern apps
Applications form the foundation for any digital business, and banks are no exception. Automation tools such as low-code and no-code platforms can accelerate application development and reduce the time-to-market for innovative banking solutions.
These applications can then be integrated with existing core banking systems, as well as other technologies, such as CRM platforms, to enhance user experience, with automation platforms facilitating seamless integration between different applications for an efficient flow of data.
Automation also allows banks to scale their applications efficiently, so they can adapt to any fluctuations in demand. The flexibility to scale supports the adoption of new technologies, so banks can continually grow their offering and accommodate any future innovations that will support their products and services.
Boost agility
Automation can help banks to streamline their processes by automating repetitive, manual tasks. This provides agility both internally in the form of project management and externally for customer service. Automation tools facilitate task management, collaboration and real-time visibility, helping banks to prioritize work and deliver solutions faster.
Agile customer service comes in the form of automated chatbots that can handle customer enquiries and guide them through self-service processes, which frees up employees to focus on more complex, value-added interactions.
Bizagi: Driving innovation in banking through low-code process automation
Bizagi has helped numerous organizations to optimize their operations through innovative automation solutions, including multiple banks and financial service providers.
Bizagi can streamline operations in banking and accelerate innovation using existing IT and business resources, enabling users to create robust enterprise applications with built-in governance.
Find out what we can do for you at https://www.bizagi.com/en/solutions/banking
