The financial services sector is currently undergoing large-scale digital transformation and even disruptive change. Digitalisation is driving this change, shaking up established business models and processes as a result. New technologies enable financial services companies to overhaul their operations, making them more efficient and appealing, and helping them to meet the growing expectations of their clients. However, in the face of tighter regulations, low interest rates and considerable cost pressure, many banks around the world are failing to satisfy their customers’ growing demand for more rapid digitalisation of services. As things stand, there are barely any new services with mass appeal and widespread adoption.
While many established financial service providers are dealing with IT legacy problems, it is the emergence of these same technologies that is creating opportunities for new types of companies like fintechs, posing additional challenges to the more established players. In addition, financial services companies operate in highly regulated environments, forcing them to meet two fundamental requirements at the same time: to drive forward their digital transformation while meeting demands for increased transparency, a greater foundation of trust and comprehensive data protection. CSX, Credit Suisse’s digital banking service, shows us what the future of banking could look like. Major financial institutions are testing the market with hybrid business models.
Digitalisation: processes and data are essential
A decisive factor is the ability to interpret developments and innovations correctly and distinguish between passing hype and goldmines. This means financial service providers need technological and strategic foresight to safeguard their business over the coming years. Consequently, companies should not only focus on digitalising their current services and processes, but also on expanding and developing their business activities in the light of new technologies such as artificial intelligence, data mining, virtual reality and blockchain. Often, the basis for the successful implementation of new technologies lies in the availability of huge amounts of high-quality data. This is why it is so important to digitalise existing processes to facilitate the collection of data in the required amount and quality, which in turn provides a basis on which to effectively modernise the company.
Does the current situation provide an additional catalyst for digitalisation?
Events in the first half of 2020 have made it clear to many market players that a well-developed IT infrastructure, digital processes with end-to-end encryption and digital services are essential. As a result, it is quite possible that the experiences of the past few months will accelerate digitalisation from the financial sector’s perspective while also shifting focus to technology companies that raise the bar and take customer interaction to the next level. But this is a prediction to be approached with caution, since we must continue to safeguard our customers on many levels – just as the public already expects of social media companies. There remains much to do for the financial service providers of tomorrow.