The Impact of Digital Transformation on Commercial Banking

The Impact of Digital Transformation on Commercial Banking

A customer’s journey starts from the moment they log into their online account or step into a physical bank. Whether a customer is requesting to open a new account, seeking help with transactions, or requires information to make an important financial decision, banks have to focus on transforming these everyday customer interactions.

Commercial banking divisions have many reasons to invest in digital transformation. The way consumers are interacting with their banks is changing fast. According to the Ipsos-Forbes Advisor U.S. Weekly Consumer Confidence Survey, 78% of Americans prefer to do their banking online i.e. through a mobile app or a bank’s website.

Digital transformation is not just beneficial for the consumer but also benefits commercial banks in improving their processes and creating new products and services.

Contributes to cost reductions

Digital transformation is cost-effective compared to manual processes. If commercial banks can improve their digital efficiency even by 25%, it will contribute significantly to error reduction.

The fewer the number of errors, the better the customer satisfaction rates.

Opens doors to provide personalized products and services

Today commercial banking divisions have hardcoded products and services with standard benefits, such as credit cards, savings accounts, and mortgages.

Personalized banking is the future of commercial banking. For example, if a customer wants to define a specific repayment plan on their loan, they cannot do so with the current structure, however, if banks were to entertain such a personalized need, they would be scrambling to find a solution.

In a Capco survey targeted to understand customers’ expectations, 72% of respondents rated personalization as “highly important” for their banking needs.

Digital transformation will allow banks to develop flexible and customized products and utilize the advanced technology to manage and deliver these solutions to customers.

Alleviate customers’ pain points

Today when a customer faces an issue with their bank account or related processes, they have to go through a long and painful waiting process. For example, long hold times, where customers are ping-ponging between various representatives and repeating the same information to each one.

Automation is the key to alleviating these pain points. Many commercial banks are already utilizing artificial intelligence (AI) to speed up their processes. AI can collect customers’ past conversation history and use that data to resolve disputes instead of asking the customer to go through the process of explaining the issue each time.

According to a UBS Evidence Lab report, 75% of participants with over $100 billion in assets say they are implementing AI strategies. Cambridge Centre for Alternative Finance and the World Economic Forum also reported that more than half of financial services companies (56%) utilize AI for risk management.

Use predictive analysis for accurate KPIs

Predictive analysis allows banks to be accurate in their predictions of customers’ behaviors, needs, and approaches. For example, how much time customers spend on mobile app banking vs desktop banking.

This data can help create accurate KPIs. For example, collecting data on how much time an average customer spends on a call getting their issue resolved is important in understanding if your representatives are adopting the right approach in problem-solving.

By leveraging this data, commercial banks can improve their processes and contribute to customer satisfaction.

Employees in commercial banking divisions are at the forefront, dealing with customers and addressing their complaints. Banks are on the cusp of digital transformation and finding top-level digital-savvy candidates is crucial to their success. Let The Anderson Search Group help you find the best candidates.



The Impact of Digital Transformation on Commercial Banking