Top Use Cases of Digital Transformation in Banking and Financial Sector

Top Use Cases of Digital Transformation in Banking and Financial Sector
July 15, 2020

The traditional banking model is going through sharp industrial shifts. With the urge to stay ahead in the competition and with the need to meet customer expectations, the financial sector is said to be witnessing global trends. The banking and financial sector is pushed to look for new technology solutions to build a low-interest-rate environment, meet reporting and regulatory needs, and to match with the competition from FinTechs.

Digital transformations, when done correctly can help the banking and finance sector in delivering a higher return on equity, bring down income cost ratios, and have a higher share price. It is important for banks and financial firms to take their time to understand the opportunities in technology and come up with a comprehensive and structured strategy that can help it build value through the entire business.

To know things better and understand digital transformations in the banking and finance sector in a better manner, here we are with some use cases to check out.

Sony Bank: Focusing user experience through effective digital services

Sony Bank is a commercial bank established in April 2001. This Japanese bank has managed to work as a direct bank and comes with no physical ATMs or branches. In short, the bank is internet-based and is specialized in offering retail services like debit cards, foreign currency exchange, online home loans, etc. Despite having just a few hundred employees, the bank has managed to offer new digital financial services which include WealthNavi Robo-advisor, crowdfunding, integration of debit cards with smartphones, and AI-enabled home mortgage review.

As said above, the debit cards are linked with smartphones and these cards offer services, different card designs, and user experience that can offer better value to the users. By using such cards, users can easily access their bank accounts and check information related to it.

As a part of digital transformation, the bank is planning to include other digital services, work on data and APIs, and focus on UI/UX. Sony Bank is working on to offer financial services to the customers that are personalized to their needs and lifestyle, by accessing the financial data of the users and leveraging the strengths of Sony Group.

In order to support the digital transformation journey, Sony Bank teamed up with DOMO in the last quarter of 2019. For the financial industry, using data in an efficient manner is the topmost challenge. This is where Sony decided to go for DOMO to have a single platform for data management. This has helped Sony Bank to let all the employees have access to the data they need and make information sharing possible in a timely manner.

This has helped Sony Bank to stay competitive in the industry all the while getting newer sales opportunities.

Orange: Get its digital bank in a year

Coming up with a digital bank is not an easy thing and things were not much different in the case of Orange, a telecommunications provider. After acquiring 65 percent of Groupama Banque, Orange formed its bank. The first thing it did was to repair its systems, IT structure, organization, and offerings.

In order to carry out the task of digital transformation with great professionalism, Orange chose Capgemini. Here, the only thing that Orange wanted was to go into business with their solution in a year’s time!

In a general scenario, the digital transformation is a step-by-step process where tasks are carried out sequentially. With just a year in hand to go online for Orange, Capgemini could not go for it. Orange teamed up with Capgemini to define the outcomes and to set the new objectives. They were working on to build a mobile-first bank that delivers all the services reaching the customer expectations. They were planning to achieve a modern design, a new set of banking products, real-time money transfer, self-service with chatbots, and AI investment advisory.

In order to achieve the goal, Capgemini planned to come up with a Digital Operating Model for Orange which will give an idea about how the new IT services will be planned out and maintained. Apart from that, they also worked towards developing relationships with several financial and technology startups.

With just a year on hand to handle everything and get all the needed features developed, Orange Bank’s executives quickly understood that they needed external help. So they took the help of Capgemini to deliver the services and technologies they need and then to integrate it with the API-based service platform architecture which Capgemini has designed for in-house.

Capgemini stood with Orange throughout its journey and helped it come up with a customer-centric organization. It made it possible by setting up marketing and design teams and designing complete customer journeys.

A test version with limited users was released at the end of the year. Testing and improvements helped in widening the user base. After the end of the testing phase, the app was officially launched for the users by the end of 2017. Within a year’s time, they had added additional products like premium credit cards and personal loans and had expanded their customer base by 200,000.

Societe Generale: One of the French banks leveraging from digital solutions

Societe Generale is one of such banks which have gained recognition for implementing innovative digital solutions into their business. They even won a Gold Award for best digital communication a few years back. The innovative approach they took in this area lets us understand the kind of opportunities that such digital services bring in for financial services if they agree to change their business model with technology integration.

One of such model is Dynamic Cryptograms

This is one of the successful digital banking security steps taken by Societe Generale and within the span of just six months; it was opted by around 150,000 customers. This works by collecting the three-digit number present on the backside of the bank cards. Then it shows the digits on a small screen and every hour keeps on reshuffling it. This way, scammers or hackers looking for some static information will not be able to use it. The innovative solution was appreciated and recognized by Netexplo to be one of the innovative advances of the year taken by companies in France.

Apart from just working on building digital solutions for external use, they in 2014 came up with their ‘Digital for All’ programme. The solution helped them bring in a cultural shift within the organization. Now it’s been a few years and through the programme, they tried to make sure that technological solutions are adopted by the firm at every level so as to simplify processes and connect teams.

Additionally, the bank even came up with an online academy named Infogram to train the employees. It offered video tutorials, virtual classes, and online courses that employees can follow to learn new skills that too at their own pace. They can even choose the place and time based on their convenience all the while gaining from such amazing teaching tools.

ITTI Digital: Revamping its core banking solution

ITTI Digital decided to partner with UXDA to transform the core banking solution completely. The transformation was focused on enhancing employee productivity, service speed, and customer satisfaction. Such a new banking solution has also helped banks to bring down the learning curve from a few days to a few hours. Update in such a way has even helped to reduce human errors to a great extent. ITTI Digital has been able to expand its global market reach by implementing a new core banking solution.

Having an outdated core banking system was something that ITTI Digital was more concerned about. They had some solution, which was way back in looks apart from affecting the back-office jobs in a bad way. Having an outdated system for your back-office seems to be more problematic than it looks. It can easily affect the business in terms of poor quality, speed, and in terms of providing valuable customer service. Bank employees are not much in favor of having a modern digital approach at their desks. The absence of any human-centered solutions within the office culture can have a negative impact even when you have an end-customer solution with great looks.

So, here the greatest challenge was to come up with a new core banking solution that is in favor of the employees. A solution, which will make their jobs easier, address their pain points, and turn their job into fun, was to be developed.

To achieve this, UXDA unique Financial Design Methodology was selected. The solution has been developed over a period of 10 years and has proved to be successful by offering service to other banking solutions.

Apart from achieving great design and looks, they have been able to come up with a user-centered solution that offered excellent value to the business all the while bringing cultural change within the organization.

Final thoughts

Traditional banking is no more enough and digital banking is no more an option. Choosing the right technology and opting for digital strategy is what your finance business needs today. Every digital transformation is a part of an effort to resolve a challenge and going through these use cases will give you an idea about how banks and other financial firms gained from such digital transformation.

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