Virtually every industry has felt and began
adjusting to the impact and implications of digitalization. In some instances, it’s almost become a
necessity- online presence and ecommerce options are necessary for companies to
scale their businesses, and in many instances it’s been shown to increase
customer loyalty and satisfaction, as well as increase sales and reduce
costs.
The Banking sector has also recognized the
benefits of going digital and in many ways, they've began rising to the
occasion. Within the last decade,
options like mobile and ATM deposits and transfers have been unveiled, quickly
amassing loyalty from weary consumers who quite honestly have better things to
do then stand in a bank teller line. During the past eight years, ATM deposits
have increased by 38% and mobile deposits by 10%. Traditional face-to face teller deposits have
decreased by 48%.
image source: businessinsider.com
This is great news for
banks, which save money every time consumers choose to bank
electronically. The cost, for instance,
of an average teller-conducted deposit is about $0.65. The cost for a mobile deposit averages $0.03.
The push towards digitalization isn't only
about saving on the cost per transaction however. It’s also about optimizing the overall IT
operational costs, which at the moment, is unsustainable high due to
inefficiencies within most banks internal processes.
According to Richard Jefferson, Vice
President of financial services at Pegasystems, “…many [banks] are looking at
ways to reduce their IT cost…for example, if you are applying for a loan as a
commercial customer, in the background, people at the bank may have to
interface 10 to 30 systems to originate and process that loan.”
It’s a model that has obvious room for
improvement, and as the technology sector continues to streamline software and
IT processes, banks are increasingly beginning to examine their options and
fulfill digitalization gaps that are withholding revenue or creating
unnecessary hardships for operational procedures and consumers alike.
The ability to reform and adapt is more
important than ever as movements such as Fintech are producing a plethora of
startups focused on financial reform and new age alternatives to brick and
mortar banking systems.
So far, banks have been able to retain
their customers by satisfactorily synergizing tech solutions that provide
convenience, but they've still got a long way to go when it comes to internal operational
growth.
