Indian finance sector made contact with digitalization a long time back. However, it is in the last 5 – 6 years that the major paradigm shift has taken place in terms of online banking and digital financial services. To paint a simpler picture, the impact of digitalization can be narrowed down to four major zones – improving frontline business; enhancing customer convenience; increasing customer reach and boosting retail credit growth. Better digital reach has allowed connecting with customer segments that were left untouched by the traditional approach. Access to credit has drastically improved. Customers no longer need to physically visit a bank branch as the process is completely digitized. It has become not only simpler but near real-time and ubiquitous.
Enhancing customer experience has always been at the heart of digitalization. Earlier, customers were acquired traditionally and then inducted to the digital environment but now, with digital transition customers are acquired, managed, and grown digitally. In the last half-decade, FinTechs have already been creating havoc – upgrading customer experiences. The next wave of digitalization is expected to come from the consumer top layer, building inroads and adoptions for digitalization rather than just being the front end for banking or assets.
To be future-ready from a digital perspective, banks and financial service providers need to have four pillars strategically ready in terms of execution. The first two pillars are digital infrastructure and digital reach. Here the digital blueprint should be in place, including clarity on channel strategy – whether it is mobile app, net banking, or Alexa or Google Home. This will enable reaching out to the wide target audience from both acquisition and servicing point of view. The third significant pillar is digitizing the vast product range and making it available in the self-service mode. Finally, the last pillar is ensuring a smooth and upgraded customer experience devoid of hiccups.
Tech firms have been enabling smooth digital transformation across industries by continuously analyzing used case studies for applications. Sharing their insights as to how the same technology is being leveraged by a plethora of players in different sectors is helping the financial sector to develop the best digital experience for the customers.
The next wave of digitization in the BFSI sector, is also bound to transform employee experience. All new age financial institutions have an employee strength upward 5000 who are regularly spending on the street on behalf of the company. The current phase of digitalization is expected to have a powerful impact on this workforce by making the mundane and inevitable things for them simpler, so that they can focus on more important matters for their business.
No deliberation about digitalization can conclude without touching the topic of data privacy. Sharing confidential information like bank statements, investment information, etc. between financial institutions will become much more robust in near future, as will the new data privacy law. New data protection law will eliminate the any existing vagueness and make the clauses more particular, stating what information is being shared, with which parties and for which purpose, increasing data security considerably.
In conclusion, we can say the industry leaders have opined that the swiftly transforming BFSI sector is all set to usher in a new era of digitalization augmented by new innovations, which will offer a holistic upgrade for the customers, employees and businesses alike.