Digital transformation seems to be more than just the digitization of data and processes, or digitization in combination with robotisation. It leads to a special kind of socio-economic change. With digital transformation the events gain its momentum and affect functioning of organisations and many aspects of lives of individuals, with consequences as follows:
• the emergence of the almost ubiquitous Internet of Things – subjectivity and objectivity become complex,
• the unreal world becomes a new reality,
• use of smartphones – the need for continuous communication (Fear of Missing Out)
• virtual assistants,
• threats to our private lives through the unauthorized use of security cameras and surveillance equipment
The bank must be safe but fast, cheap, tailored to the customer‘s needs and smart. Today, it is difficult to talk about customer loyalty or sentiment. Today‘sclient is mobile, he comes and goes, does not stay in the bank through sentiment or habit, and because the bank accompanies him in all phases of his life as a consumer and as an economic entity.
I advise you to please take a read of the below chapter and I would be very happy to know your thoughts.
Is it the end of banking as we know it? Will AI be the future of banking? Will banks be soon digitized mechanism and advisors AI?
based on my earlier research: Chapter Role of digitization for German savings banks
(PDF) Role of digitization for German savings banks. Available from: https://www.researchgate.net/publication/344808656_Role_of_digitization_for_German_savings_banks [accessed Nov 28 2023].
Based on the document provided at the link, we cannot conclude that it is the end of banking as we know it. However, the document does highlight that digital transformation is bringing major changes to the banking sector. Some of the key points regarding digital transformation of banking mentioned in the document:
1) Digitization is a major force shaping transformations in society, organizations, enterprises, and the economy. It is also transforming the banking sector.
2) Key components driving digital transformation include the Internet of Things, big data analytics, artificial intelligence, and blockchain technology. These are creating a new digital ecosystem.
3) Digital transformation is leading to new business models that utilize online platforms. Traditional branch-based banking is becoming less attractive compared to anytime-anywhere banking that provides convenience and transparency.
4) Banks need to focus on understanding customer needs, improving customer experience through digitization, being open to innovations, and having organizational flexibility to adapt to the digital age. This includes introducing new digital products and services, redesigning processes, and embracing omnichannel approaches.
5) While there are opportunities, there are also risks related to data security, fraud, operational continuity etc. that banks need to manage.
In summary, digital transformation of banking is leading to fundamental changes in banking business models, operations, and customer engagement approaches. It is not the end of banking, but banks need to digitally transform to remain relevant and competitive. The ones that fail to transform may struggle to survive.
@ George Benneh Mensah Thank you very much for your opinion.
Following on from what you wrote, if the banks that do not undergo transofmation are to fail, will those that lead the way in the application of new technologies be the market leaders?
Another thought is, if technology becomes one of the factors of competitive advantage, the product palette and quality of service does not go down the drain?
The most interesting thing is that change is happening at an incredible pace and this, from the banks' perspective, requires a great deal of focus on maintaining the pace of transformation, which is known to be time-consuming and capital-intensive.
Thank you for the discussion.
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