Enterprise renovation usually involve putting different systems in place to ensure operational efficiency and effectiveness. For instance, a recent report from EY surveyed 250 C-level executives at FIs across the globe, stated that 65% of executive’s enterprise saw increase in revenue, 62% witness improved customer experience and 60% experienced innovative services due to their enterprise digital change plan. Successful transformations usually require consistent budgeting and dedicated teams to realize automation, speed, agility, and elimination of redundancies.

The report also found that enterprise digital change plan was top priority for 65% executives while 32% FIs do not prioritize transformation and are less digitally advanced. In addition, 83% digitally advanced FIs have “defined, repeatable and scalable innovation processes.

Financial institutions in the US are focusing on customer experience and loyalty. “More than half – or 56 percent – of FIs plan to focus on digital wallets over the next three years

Similarly, a report from PYNTS shows that financial institutions in the US are focusing on customer experience and loyalty. “More than half – or 56 percent – of FIs plan to focus on digital wallets over the next three years. A little more than one third – or 35 percent – of FIs plan to focus on peer-to-peer (P2P) payments over the next three years. Thirty-nine percent of FIs plan to focus on loyalty over the next three years. Thirty-five percent of FIs plan to focus on real-time payments over the next three years. A little more than one quarter – or 28 percent – of FIs plan to focus on contactless over the next three years”

Reinvention Trends

One major driver for enterprise digital transformation is the development of customer centric solutions that will increase revenue and expand growth. Four instances provided by a recent IBM and PYNTS report include:-

• “A bank in North America is using digital reinvention to improve its customer rewards program by using blockchain technology to give customers real-time data about their rewards account and a much better user experience.
• An european bank has launched a Facebook app that not only allows customers to perform most banking functionality on standalone applications, but supports creation of personalized cards with photos, as well as mechanisms that facilitate customers making donations to charities most aligned to their interests.
• A Turkey-based DenizBank is linking together its digital payment subsidiary fastPay with fintech start-up Qapel to launch an interactive TV quiz show. The show allows viewers to win Qapel cryptocurrency that is spent exclusively through the fastPay network, allowing DenizBank to acquire new customers and increase transactions on its network.”
• Similarly, NXT-ID and FitPay are transforming payment offerings by powering wearable product offerings and mobile wallets. The innovation witnessed 43% growth in activation across devices, banks and geographies within 2 weeks.

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7 Key Steps to Digital Transformation

What steps can Financial Institutions take for a successful digital transformation? A  recent bankinnovationand bai report identified 7 key considerations:-

• Employing exceptional expertise: Financial Institutions would need to employ brilliant team that can focus on some aspects of the business to create unique, market-leading solutions as part of their transformation plan.
• Employ the right FinTech partnership: Partnership with FinTech companies can enable swift delivery of secure and innovative bespoke solutions that allow banks to compete in the market place.
• Isolate the operation of legacy systems: – Reducing the utilization of legacy systems in the development and deployment of new solutions ensure the removal of limitations as a result of obsolate technology.
• Have a consistent strategic and proactive innovation plan: In a world of expectation for seamless experiences, financial Institutions would need to be proactive in order not to be left behind and risk playing catch-up with competitors.
• Strategic Focus Selection: Deliberate decision is required in choosing the business aspect that needs to be transformed. For FI’s most transformations are in three categories; “simplified small business lending, expanded wealth management services (roboadvisory), improved customer relation and sales management tools, and simplified person-to-person and business-to-business payment products”.
• Incorporate risk and compliance strategies from the start.
• Ensure that the transformation plan accommodates strategies for customer acquisition together with tested and proven innovative products.