All You Need To Know About Digital Transformation In Finance
by Sumona Technology 28 October 2022
Recently, we have seen a digital transformation framework in every industry, and the same goes for finance.
Finance is a pretty complicated industry that requires strong data storage and real-time data update. Hence, digital transformation in finance is something that keeps happening.
By adopting digital transformation, customer-facing processes have been digitized, transaction speed has increased, and much more.
Finance sectors also develop new innovations from time to time, making real-time data processing possible. It streamlined tasks, optimized processes, and advanced analytics. But there is more, and here is a complete overview of how digital transformation in finance is happening:
What Is Digital Finance Transformation?
In today’s time, digital transformation in finance is something that we get to see across different sectors. It is not limited to finance only.
In simple words, digital transformation stands for businesses utilizing digital technology to improve or amend current operations to achieve faster workflow.
A business can do it by migrating to cloud-based software, utilizing digital platforms, or completing tasks through automation.
In the finance industry, we get to see a bunch of examples of digital transformations. For instance, nowadays, anyone can download banking apps on their phone that allow them easy money transfers. Or you will find apps that help you with investing.
Along with that, AI-powered chatbots are also being used by different companies to help customers solve their queries faster.
6 Digital Transformation Trends In The Finance Sector
Digital transformation in finance is the way to future-proof the finance sector. Many companies have already started to digitize their whole process, and there are other companies that are on the way. And here are a few trends that we see among fintech companies:
1. Paperless Transactions
Without a doubt, making transactions through the old traditional method is way too slow and expensive. You have to go to the bank and write a check to transfer money to someone else.
But in today’s time, there are many companies that are ditching the old method and shifting to a more paperless transaction option. And there are two benefits of adopting paperless transactions. First, it is extremely fast and seamless. Also, they are easier to manage and keep data.
Also, the digital transformation in finance gets recorded in real-time. Plus, nowadays, banks are adopting blockchain, which keeps a ledger of every transaction, and the ledger cannot be altered or modified in any way. As a result, storing data has become a super secure process.
Automating boring or time taking tasks is something that we are getting to see across all industries.
Automation helps in dealing with repetitive tasks that do not require any human help. This helps the company to manage the whole workflow and save money on employee salaries.
There are several everyday processes that can be easily optimized by implementing a workflow management system. For example, companies can use it for managing payroll systems, taking a backup of the data manually, and many more.
Without any doubt, digital transformation in finance is a long way to go. Among different finance industries, the most digitization that we are getting to see is happening in the banking process.
In today’s time, almost all banking processes have turned digital. One can open a bank account, manage their bank account, transfer money, and check investment options right through their phone. Also, there is no need to visit the bank.
Also, today’s generation prefers neo-banks or digital banks more than traditional banks. Hence, you will see many top banks launching their own neo-banks or partnering with companies working in the neo-banking sector.
AI or artificial intelligence is taking over the world by storm. Almost in every industry, we are getting to see the heavy impact of AI. Digital transformation in insurance is one of the significant examples of digital transformation.
The rise of AI is because they serve several important processes. A trained AI system can help financial services provide identity patterns and automatically implement measures to eliminate unfavorable conditions.
AI tools can help a fintech company strengthen its security, identify users trying to open a fraudulent bank account and execute fake transactions. As well as, AI tools can offer a bunch of other help to the finance sector.
5. Cloud Services
Almost every other company is going cloud. Why? Because it makes managing and working with data possible across different devices. You also can hire a digital transformation consultant for better cloud service options.
Also, cloud services offer scalability, and they are much cheaper than the existing systems. Hence, many companies are slowly moving their services to the cloud.
Cloud services have many benefits. First, they are pretty secure and cheaper. Also, it offers companies to meet their environmental and social governance commitment. This is the reason cloud services come under one of the top digital transformations in finance.
6. Advanced Analytics
Analytics is another important area of digital transformation in finance. As the whole finance industry runs on data, you need some sort of analytics. By using innovative machine learning, the power of AI, and real-time data processing, digital transformation can give you and your team access to advanced analytics.
Through the data, businesses can improve their customer service, introduce new features, strengthen their business security part and much more.
So that was all about the digital transformation in the finance sector. One good way to know more about it, you can look at new-age fintech companies and see what services and features are offering and the science behind them.
Anyway, if there is anything else you wish to ask, then do feel free to comment below, and I will help you out.