How banks are turning uncertainty into an opportunity for digital transformation


A study has found 88% of banks and lenders are capitalising on the prevailing uncertainty to rebuild customer trust via digital transformation.

The research, carried out in spring 2023 by Smart Communications and Salesforce, entailed surveying 430 senior executives within the global banking and lending sector, to discover insights on the strategic plans regarding digital technology investment and customer engagement.

Interestingly, there was a split in responses. Roughly 37% of participants wanted to restrict technology expenditure due to the unpredictable future, whilst 63% are keen to continue investing in new digital technologies, foreseeing potential opportunities.

Karen Oakland, VP of Financial Services Marketing at Smart Communications stated, “Despite rising interest rates and market volatility, the majority of banks and lenders are recognising the importance of investing in digital solutions that deliver hyper-personalised customer experiences and build trust”. Oakland further stressed that banks and lenders are also focusing on automation investments to quicken turnaround times, minimise errors, and lessen the pressure on customer-facing personnel.

According to the survey, banks and lenders are turning to digital tools and automation to win back customer trust and counter skill shortages. The majority of respondents, approximately 90%, believe that the capability to quickly scale automated processes when customer queries increase – without incurring added fixed costs – will be crucial for their success in the upcoming three years.

Head of Banking at Salesforce, Anna Bratton emphasised, “The future of customer service in the banking and lending sector lies in hyper-personalisation which can only be achieved at scale through digital transformation”. The research also discovered that consumers now expect banks and lenders to provide AI-guided dialogues for better decision-making. Moreover, 77% of respondents are considering investing in automating digital forms that adapt to customer’s responses, enhancing the conversational experience.

The report also revealed a slow, yet ongoing transition towards cloud technology among banks and lenders, with 65% recognising a potential investment gap for developing systems architecture based on cloud, microservices and APIs. Progress is sluggish, with only 4% of surveyed institutions reporting that they host over 50% of their applications in the cloud, though 27% intend to make the switch within the next two years.

The report concluded with a severe caution, 92% of respondents agreed that a pause in digital and customer experience investments during a crisis could result in failure during the subsequent recovery. This underscores the urgency for banks and lenders to invest in digital transformation and customer experience initiatives.

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