The Digitalization Megatrend & the Banking IndustryReshaping the global banking industryThe Banking industry is facing massive challenges today. The effects of the Covid-19 pandemic have added an additional layer on top of the low interest rates, regulatory changes, and the digital disruption that have challenged the traditional bank business model long before the Covid crisis began. However, the banking industry’s response to the pandemic is noteworthy. Many banks went fully virtual in a matter of weeks, effectively deploying technology and showing impressive agility and resilience as COVID-19 reshaped the global banking industry, bringing in a new wave of innovation and accelerating digitization.
Transformation in crisis in addition to accelerating digital adoption, the crisis has also served as a test for banks’ digital infrastructure. Institutions that made strategic investments in technology prior and during Covid-19 are emerging stronger, however more tech modernization is needed, and the sooner the better. Unfortunately, in times of revenue and profitability pressure, banks may be tempted to slow down digital transformation efforts, or even put them on hold, in order to improve cost efficiency, but this is an extremely short-sighted approach. Although leaders must balance their investment in transformation with cost efficiency efforts, the banks that do not take bold action now and make the most of the latest available technologies will not be able to stay ahead of new competitors and meet customer demands.
Tech is a Strategic PriorityHigh-performing banks show that transformation amid a downturn is not only possible, but it must be a top strategic priority. IT investment is crucial in the new banking world in order to meet customer experience expectations, collaborate with Fintechs and adhere to changing regulatory requirements. Banks must leverage various platforms to elevate customer engagement, use data intelligently, establish new partnerships, and deploy compelling service delivery models.