Driving digital transformation in the Banking and Financial sector

Driving digital transformation in the Banking and Financial sector


The traditional banking business is undergoing significant changes. A report states that the financial sector experience worldwide changes due to the initiatives to keep ahead of the competition and the requirement to meet client expectations. However, to develop a low-interest-rate environment, meet regulatory and reporting requirements, and compete with FinTechs, the banking and financial sector is being driven to explore innovative technology solutions to implement digital transformation.

Besides, with an effective approach, digital transformations can assist the banking and financial sector to achieve higher returns on equity, lower-income cost ratios, and a higher share price. It is critical for banks and financial institutions to take the initiatives to implement and secure the opportunities offered by technologies. It becomes essential to develop a comprehensive and organized plan that will enable them to create value throughout their whole organization.

This case study provides complete insight into the impact of digital transformation in the financial sector and banks that embrace digitalization.

What is digital transformation in the banking and financial sector?

Digital transformation refers to a set of changes made in the banking industry to integrate various fintech technologies to effectively automate, optimize, and digitize banking processes while also increasing data security. This process entails several significant and subtle adjustments that transform the financial processes and technologies.

Irrespective of the industry, the main trend of digital transformation is the integration of technologies, and statistics demonstrate that this trend will only continue to expand.

Traditional banking faces the same difficulties and opportunities as the payments business, including the following:

– A dynamic environment highlights shifting consumer demands, rising competition, and ongoing regulatory changes.

– Digital channels are becoming more popular

– New digital technologies are being introduced and accepted.

– Data analytics are becoming increasingly important and advanced.

– Networks displace traditional credit or cash transactions.

Likewise, to evolve in the future, it is essential to optimize and digitalize each stage of the customer journey  in a tailored and seamless manner, taking advantage of the changes in the marketplace mentioned earlier.

Challenges in the Banking and Financial Sector to implement digital transformation

Banks and other financial institutions have additional challenges, which are also seen in other parts of the financial industry:

  1. Integration: The requirement to connect or integrate distribution channels to improve efficiencies, lower costs, and provide consistent service to consumers and prospects.
  2. Finding more opportunities: Improved identify opportunities by looking at the complete customer life cycle, improving experiences, and providing better customer service and user experiences.
  3. Increasing loyalty and decreasing churn: Customer loyalty in retail banking fluctuates. This is due to several additional issues discussed below, as well as overall shifts in consumer behavior. In some instances, we witness an increase in loyalty, whereas, in others, we see a reduction in loyalty. Therefore, loyalty is no longer sufficient, consider more about experiences.
  4. Low levels of trust: the impact of the past financial crisis and today’s shaky economies have a huge impact on customer’s minds.
  5. Disruptive models: FinTechs with disruptive models that are better suited to the digital customer. However, depending on the geography and circumstance, there come major changes in the competitive landscape.

Advantages of digital transformation in banking

Financial organizations can profit from digital transformation in the following ways:

  1. Improved data handling and security at all levels: It is easier to prevent external and internal data leaks to fraudsters and competitors  via data encryption. Most importantly, it improves transaction security.
  2. Reduced wait times and faster operation: Clients dislike waiting, especially when they have entrusted you with large quantities of money. Microservice-based design in Big Data processing systems ensures rapid and secure transaction processing.
  3. Improved banking operations analysis and risk management: If you have effective fraud detection systems, you won’t have any problems with fraud schemes. Additionally, multi-level transaction validation eliminates the possibility of customer and staff errors.
  4. The ability to predict the future: Knowing ahead of time what issues and changes your market will experience is critical to your financial success. Having reliable knowledge of many probable situations, ranging from minor economic disruptions to a worldwide financial crisis, will enable you to plan ahead of time. This will help you to make better business decisions and integrate the most efficient Fintech solutions ahead of your competition, or you will be able to shift your company to a more promising and financially rewarding field.
  5. Customization: Customers despise receiving generic offers that they don’t require, but they appreciate receiving timely offers that address their specific needs. You will be able to modify your offers and make this procedure automated and safe if you use software with the right analytical, data mining, and processing compounds.
  6. Possibility to automate repeated tasks: When managers extract the same data to create the same reports over and over, it’s mindless and inefficient labor for your employees and your company because you’re paying salaries for something that people take hours or days to complete but can be done in seconds with software


Examples of Digital Banking in the US

Banks and other financial institutions must devise a “Digital Strategy.” Whether it’s corporate banking or payments and cards, every banking service now offers a digital option. Banks must analyze all possible areas of digitization to evolve as digital institutions effectively.

Let’s take a closer look at popular banks in the United States that have successfully served tech-savvy millennials by following banking trends.

American Express

AmEx, or American Express, is a well-known premium brand in the United States as it provides excellent customer service, like maintaining customer and relationship relationships while providing comfort and ease. Some of the great strategies that make AmEx a #1 choice among customers is listed below:

1.     Facilitate digital onboarding

The onboarding process at American Express is simple and effective. It also utilizes multiple channels. The onboarding process began immediately after the approval procedure. This includes a reaffirmation of my Platinum advantages and the option to sign up for extra services like the Pay Over Time feature. Even Platinum Partners, such as Amazon, send emails promoting the linking of the Platinum card to the Amazon account and the usage of AmEx points for Amazon purchases.

A new account kit is sent out via direct mail and digital onboarding, and it reinforces the significant components of the value proposition with colorful postcards. There’s even a postcard encouraging new cardholders to “Share the Love.” Adding a second card for a family member or introducing a friend for 15,000 bonus points are examples of this.

They also attract customers with exclusive and new account package. The current platinum card from American Express is made of gleaming silver metal. The card is supplied in a lovely wooden carrier that also serves as a phone holder. It creates a distinct sense of surprise and delight.

Key Understanding:               

While most banks and credit unions will not greet new customers and members with a gleaming metal card in a wooden holder, the value of reinforcing the new relationship through both non-digital and digital communication cannot be overstated.

The only way for American Express to earn from the relationship is for the new consumer to use their card. At the start of the relationship, every communication encourages the new customer to use the new card as the principal mode of payment on all travel and hospitality accounts.

To achieve the same purpose, banks and credit unions must employ onboarding communications. Immediate participation and account usage. All available channels should be utilized. Local firms must bring digital account openers into the branch to meet with their “local” team of specialists. For instance, American Express recognizes the importance of engagement and invests extensively in it.

2.     Boost Mobile Engagement for better digital transformation

Customers that actively utilize their mobile application are vital to American Express as part of the onboarding process. All communication reinforces the merits of linking the Platinum card to many external applications, such as Uber, big hotels, major airlines, merchants, and so on, from the beginning of the partnership. This is the only way to obtain the cash-back advantages that make the Platinum card such a good investment. It’s also the only method American Express recognizes a relationship’s true worth.

AmEx consistently emphasizes the use of the Platinum card’s mobile payment capability, in addition to reinforcing the Platinum card’s attachment to other organizations’ apps. They don’t rely on chance for mobile engagement; instead, they use their existing clients as a “growth platform.” The mobile app also emphasizes the advantages of using it and provides quick access to benefit possibilities.

Key Understanding:               

They utilize every opportunity to educate the customers about benefits and keep them engaged. Besides, they promote active usage of checking accounts, savings products, credit cards, or investment services instead of actively pushing active use.

3.     Simple and Quick Onboarding

AmEx has said goodbye to lengthy paper paperwork, and the company’s quick and simple onboarding procedure helps customers save time. Obtaining an American Express card is so easy that it only takes 30 seconds. Thus expert see Digitization as a boon.

4.     Compatible with all Devices

Is your Banking form only available on a desktop computer? Why not open it in a new tab? To eliminate any inconvenience to the consumer, AmEx ensured that the application form is compatible with all screen sizes and devices.

5.     Third-Party Plugins Integration

First, AmEx always demonstrates its worth to its clients by displaying a comparison chart and stating the actual value that the customer will receive. It is an excellent idea for banking software to allow customers to compare and make educated selections by integrating with third-party plugins

6.     Effective Data Utilization

AmEx leverages data points to detect fraud as well as mitigate hazards. They ensure to make effective usage of your data.

Although the features listed above aren’t “newer innovations,” they make consumer life more accessible, which sets you apart from your competition.

How appICE can help Banks in enabling digital banking in the US

appICE is a technological service provider serving financial institutions, the telecom industry, and other industries with various services such as Behavioural Analytics, Personalized Engagement, Contextual Segments, and Messaging Channels. We can help digitize core banking, launch mobile financial services, and act as a change agent to achieve financial inclusion. In addition to, provide tailor-made solutions for banks looking to improve their marketing or automate their personal engagement process. We ensure to address the 360o digitization of banking operations without the need for additional hardware or resources.


Traditional banking is no longer adequate, and digital banking is no longer a viable alternative. Today, your finance company requires the use of appropriate technology and a digital strategy to embrace digital transformation. Every digital transformation is part of a larger effort to address a problem. Reading through these use cases will give you an understanding of how banks and other financial institutions benefited from such changes.






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