Digital Transformation in Banking Industry

Updated on Mar 21st, 2024

Digital transformation in banking industry has become an unstoppable force in the past few years. As next-gen technologies like AI and IoT become more sophisticated and customers demand that newer and more streamlined features and processes replace the legacy way of doing things, the banking industry has been trying hard to adapt and become more modern. Customer satisfaction is essential in all businesses, and banks in the digital era must always value their clients and customers and strive to offer the best possible services.

A bank that doesn’t listen to its customers and doesn’t keep up with the times, is soon forgotten and abandoned even by their most loyal customers in favour of other banks who are working tirelessly to meet their requirements. That is why, businesses should take digital transformation in banking industry very seriously and plan out how to adapt and what tools and solutions they want to invest in.  

Not only do these solutions help the customers, but digital solutions also help banks improve the efficiency of their internal processes significantly. By automating repetitive tasks that don’t require human cognition and by storing all the data securely in digital format, banks not only save money but, in fact, make their entire operation a lot more streamlined.  

In this blog, we will further explore how digital transformation in banking industry is changing the way banks operate and also take a look at some of the hottest and most in-demand technological trends. 

  • A technological race has already started in the banking sector due to changing customer behavior, growing needs, and the digitalization of business and society. 
  • One of the key benefits of digital transformation in banking industry is that it helps in responding to consumer input in a proactive manner that improves customer service. 

What is Digital Transformation? 

Incorporating digital technologies and solutions into every facet of the business is known as digital transformation. It is the process of integrating new technologies with their operations in hopes of improving key business metrics like customer satisfaction, repeat business, customer retention, efficiency, revenues, etc. Digital transformation has many benefits, including increased efficiency, heightened company agility, and, last but not least, the creation of new value for employees and customers.  

Today, many banks are partnering up with technology firms such as Matellio that offer top-notch and scalable digital transformation services to build solutions that can help them streamline their daily operations. But why is digital transformation important for the banking industry?   

Let’s check,  

Importance of Digital Transformation in Banking Industry! 

The banking industry is based on established, structured processes and systems. As a result, it finds itself in a particularly difficult state when it comes to digital transformation. The established architecture and processes on which banks rely cannot be easily replaced. The need to adopt digital transformation, on the other hand, is pressing and unavoidable.    

To increase digitization and automation, digital transformation in banking industry requires a shift to digital services and also a modification in backend procedures. Banks should integrate required technologies to deliver an end-to-end digital experience to their consumers in order to compete with digital goals.   


What are the Benefits of Digital Transformation in Banking Industry? 

Below are the benefits of digital transformation in the banking industry: 

Help in Decision Making 

With the increasing digitization of banks, data has become one of the most valuable assets whenever it comes time to make dynamic decisions based on enormous amounts of data. Big Data technologies enable banks to make decisions or enhance procedures based on the data accessible to their clients. The emergence of huge technology businesses has posed a significant challenge for banks in recent years since they have access to more data and a deeper understanding of the technological solutions they provide.   

Enhance Processes 

Banks attempt to enhance the efficiency of their manual procedures by implementing cutting-edge technologies such as electronic signatures and the establishment of banking applications for smartphones. They want to eliminate human errors in consumer interactions in this way.

According to the experts, it is estimated that fixing this type of inaccuracy costs three to four times as much as developing a digital system. Because all of the data and signatures are collected accurately for the first time, digitalization in the processes results in significant improvements. Besides, the use of technical tools tries to automate operations that were previously conducted manually. Automated services, including purchase orders, invoice production, KYC verification, and fund transfer, have increased the productivity and efficiency of banking firms.   

Availability & Accessibility 

Digital transformation in banking industry has guaranteed that banks are available to customers 24 hours a day, seven days a week. The consumer can access their bank account at any time to check records and to use a variety of financial services. A consumer with a device and internet connectivity can check his bank account and execute transactions from anywhere and at any time. It saves time and money as now, customers don’t have to go to bank branches or wait in lines to get their work done. This accessibility has unquestionably improved convenience and customer service.   

Improves Customer Service 

Customers have reaped the most benefits from it. A consumer with a device and internet connectivity can check his bank account and execute transactions from anywhere and at any time. It saves time and money because customers don’t have to go to bank branches or wait in lines to get their work done. It has unquestionably improved convenience and customer service.  

Ensures Easy eKYC 

The quality of a customer’s whole experience is primarily determined by how good the first impression is. This first impression is made by most banks during customer onboarding. Previously, onboarding required customers to fill out stacks of paperwork and wait in long queues at banks, which was time-consuming and inconvenient. Banks can now streamline the onboarding process owing to eKYC, which eliminates much of the paperwork, lowers expenses, and improves client and customers’ experience.   

Apart from the above-mentioned benefits, some other benefits of digital transformation in banking industry are:  

  • Increase the efficiency of operational procedures.  
  • Keep track of your customers’ actions 
  • Improved risk management by having a better awareness of risk exposures.  
  • Enhanced employee experience.  
  • Personalization can be encouraged.  
  • Enhanced customer research and marketing that is highly targeted.  
  • Responding to consumer input in a proactive manner improves customer service. 

Top Trends and Technologies that are Enabling Digital Transformation in Banking Industry!  

The top technological trends enabling digitalization in the banking industry are:  

1. Internet of Things

IoT in banking has become a big trend in recent years. Smart gadgets are the most effective way for businesses to learn regarding their current and potential customers and their wants and needs. Personal information is used by banks to develop customer journey maps. They also employ targeted adverts to build and adapt their marketing tactics. Personal data acquired through IoT is also utilized as a source for Machine Learning analysis to uncover customer behavior patterns and train Artificial Intelligence to detect frauds. 

Read More: IoT in Banking and Finance: How Can IoT Help Banking Industry Grow?

2. Data Visualization

Gaining insights into financial data requires the use of data visualization. Based on data trends, analysts may simply track and predict organizational performance. It assists in the monitoring of both financial and non-financial KPIs. Workforce performance is greatly improved by combining KPI measures and data analysis. The potential of data visualization techniques to uncover patterns and anomalies has primarily benefited financial firms. Charts or graphs, rather than fixed data points, make trending data easy to examine and interpret. Better decision-making is enabled by the ability to delve deeper into data patterns. 

3. Artificial Intelligence

AI in banking has not only made the entire industry a lot safer, but it has also made the internal operations of banks much smoother. Artificial Intelligence combined with Machine Learning assists banks in complying with regulatory requirements. An AI-based digital infrastructure is widely utilized in fraud detection and alerts users to questionable activities, improving security against cybercriminals. Secondly, if used in conjunction with blockchain technology, it will be easy to determine both when and how frequently a transaction between the two accounts took place. Using Machine Learning to train an AI system to spot these inconsistencies can quickly sort out fraudulent or out-of-character behavior, leaving reasonable doubt for investigation, if not outright proof of fraud. 

4. Big Data Technology

It wouldn’t be a stretch at all to say that the banking industry revolves around data. With digital transformation in banking industry gaining speed, banks today have to deal with online and offline data simultaneously and that makes storing, managing, and using this data a big problem. But thanks to Big Data, this seemingly impossible task can be made manageable. Machine learning is being used by banking firms, especially banks, to process data and produce analytical solutions. Big data enables banks and other financial institutions to provide better service to their consumers by personalizing services depending on the information gathered. In the end, this can assist financial institutions in attracting more investment and creating a positive working environment for both staff and clients & customers. 

5. Blockchain Technology

All other innovations that have changed the banking industry pale in comparison to blockchain technology. It has drastically transformed the economy, and the way transactions are processed. 

Blockchain is a distributed technology that operates as a decentralized database and ensures that financial data is completely secure. To protect data and verify transactions, it uses powerful encryption methods. It ensures that the private key can only be used by authorized people to alter the data. Other financial applications of Blockchain include one-time KYC verification, fraud minimization, efficient trading, and others.

Read More: How Blockchain can Benefit Banking Industry ?

6. Mobile Banking Apps

With the rise of mobile apps, people began to demand more flexible ways of getting things done. Banking mobile apps provide users a way to do their banking chores easily and from the comfort of their homes or while travelling. Customers can use their mobile devices to transfer payments, deposit checks, and apply for loans in the digital banking industry. Customers nowadays prefer to do their banking online at their leisure time rather than going to a physical bank.

Mobile banking is becoming increasingly popular among customers because of its availability 24 hours a day, minimal waiting time, and convenience of use. Mobile banking has significantly altered the way banks and financial institutions operate, and it is projected to continue to increase in future years. Due to the massive demand, most banks partner up with at least one mobile app development company to build their apps.

Read More: Role of Mobile Apps in Banking and Financial Industries



Digital transformation in banking industry is no longer a whisper or something at the horizon. No, it is happening right now and banking institutions have to jump on it now. A technological race has already started in the banking sector due to changing customer behavior, growing needs, and the digitalization of business and society. Banks have learned that investing in digital technologies is the way to go if they want to provide better service to their consumers.   

Digital transformation in banking, like most businesses, is a costly set of procedures. This must be taken into consideration, and the complete number of resources required for successful implementation must be prepared.   

You’ll need a detailed strategy and competent specialists experienced at scalable and top-notch banking software development, like Matellio. Contact us, and we’ll handle the entire process of incorporating digital technologies into your business. We know the industry’s high standards and have the expertise, knowledge, and discipline to deliver high-quality execution and perfect deliverables. 

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