Virtually every industry has felt and began adjusting to the impact and implications of digitalization. In some instances, it’s almost become a necessity- online presence and ecommerce options are necessary for companies to scale their businesses, and in many instances it’s been shown to increase customer loyalty and satisfaction, as well as increase sales and reduce costs.
The Banking sector has also recognized the benefits of going digital and in many ways, they've began rising to the occasion. Within the last decade, options like mobile and ATM deposits and transfers have been unveiled, quickly amassing loyalty from weary consumers who quite honestly have better things to do then stand in a bank teller line. During the past eight years, ATM deposits have increased by 38% and mobile deposits by 10%. Traditional face-to face teller deposits have decreased by 48%.
image source: businessinsider.com
This is great news for banks, which save money every time consumers choose to bank electronically. The cost, for instance, of an average teller-conducted deposit is about $0.65. The cost for a mobile deposit averages $0.03.
The push towards digitalization isn't only about saving on the cost per transaction however. It’s also about optimizing the overall IT operational costs, which at the moment, is unsustainable high due to inefficiencies within most banks internal processes.
According to Richard Jefferson, Vice President of financial services at Pegasystems, “…many [banks] are looking at ways to reduce their IT cost…for example, if you are applying for a loan as a commercial customer, in the background, people at the bank may have to interface 10 to 30 systems to originate and process that loan.”
It’s a model that has obvious room for improvement, and as the technology sector continues to streamline software and IT processes, banks are increasingly beginning to examine their options and fulfill digitalization gaps that are withholding revenue or creating unnecessary hardships for operational procedures and consumers alike.
The ability to reform and adapt is more important than ever as movements such as Fintech are producing a plethora of startups focused on financial reform and new age alternatives to brick and mortar banking systems.
So far, banks have been able to retain their customers by satisfactorily synergizing tech solutions that provide convenience, but they've still got a long way to go when it comes to internal operational growth.