New research indicates that organizations that consider themselves to be ‘innovation leaders’ are more digitally mature, leverage AI and other new technologies more effectively to differentiate themselves in the market, and are more committed to measure results than other organizations. Most importantly, there is a very very strong correlation between ‘innovation pioneers’ and those firms where transformation was ‘deployed at scale’. Consecutively, these are more sustainably profitable. Unfortunately, innovation leaders only comprise 14% of the financial institutions globally. Watch this webinar to explore:
Our findings suggest that most banks have not deployed digital transformation at scale. However, organizations where innovation is a priority are further ahead of their peers in the desire to become a ‘digital bank’. These leader organizations have top management support, are more committed to investing in customer experience and advanced analytics, and are more likely to measure results of their efforts. Not surprisingly, these firms have more positive financial results than firms where digital transformation is only partially deployed.
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Progress of Deployment of Digital Banking Transformation Globally
43% of the banks that consider themselves to be innovation pioneers report to have deployed digital transformation at scale. 14% of the pioneers have only partially deployed digital transformation at their organization.
Digital Banking Transformation Impact on Strategic Objectives
Digital transformation seems to be having the greatest impact in the areas of customer experience and the delivery of digital solutions, with most other objectives not being impacted nearly as much. Not many organizations believe digital transformation impacts one of the most critical elements of digital success – the ability to change existing business models.
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There is a variance between what organizations know is important and their stated ‘readiness’. Mobile technologies topped the charts for technologies to have the greatest impact on banking in the near future, followed by advanced analytics and open banking APIs. However, readiness for AI and analytics continues to be lower than expected.
Readiness of Financial Institution to Leverage Digital Technologies
Less than 50% of the banks surveyed consider themselves ready to leverage the technologies they think will make the most impact
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Biggest Threats to the Banking Industry over the next five years
By combining modern technology with a laser focus on improving consumer experiences, fintech and technology firms have brought unprecedented innovation to the banking industry.
One of the primary benefits traditional banks and credit unions had over their competition in the past was trust. Nobody wants to put their life savings at risk or to partner with an organization that wouldn’t protect their identity and privacy. However, this advantage seems to be diminishing. It does not appear as though trust is a big problem for big techs such as GAFA (Google, Amazon, Facebook, Alibaba), who along with digital upstarts and FinTechs have emerged as the new innovation leaders in banking.
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