What is Digital Transformation?
Digital transformation is an integration of various digital technologies (such as AI, RPA, Blockchain, Cloud Computing, IoT and more) into all areas of business, fundamentally changing how you operate and deliver value to customers.
Digital Transformation is once in a lifetime technology shift journey of strategically planned organizational change. It starts by empowering our teams with new methods to create a highly responsive strategy and fearless culture of innovation.


 What are the benefits of Digital Transformation in banks?

Successful digital transformation does not come from implementing new technologies but from transforming your organization to take advantage of the possibilities that new technologies hand over.

  • Business efficiency– Not only do digital platforms improve interaction with customers and deliver their needs quickly; they also provide methods for making internal functions more efficient.
  • Cost savings– One of the keys for banks to cut costs is automated application that replace redundant manual, which further improves workflow.
  • Increased Accuracy– By simplifying the verification process, it’s easier to implement IT solutions with business software, leading to more accurate accounting. Financial accuracy is crucial for banks to comply with government regulations.
  • Improved Competitiveness– Digital solutions help in managing marketing lists, allowing banks to reach broader markets and build closer relationships with tech savvy consumers.
  • Customer Assurance– Digital Transformation helps organizations in Big Data by managing large amounts of customer information to generate a more individualistic and personalized service, which favors loyalty.
  • Greater Agility– The use of automation can speed up external and internal processes, both of which can improve customer satisfaction and empower them with personal finance education, financial services, and financial products.
  • Enhanced Security– Diving beyond digital transformation into the realm of disruption, the adoption of blockchain into banking will revolutionize payments, identity, and security.

What are the key drivers for Digital Transformation?

  • Customer expectations continue to rise– Each time a customer is exposed to a new digital experience; their expectations are immediately reset to a new higher level.
  • SPEED is more important than ever– By the time organizations devise a perspective on how to respond to an opportunity or threat, the world has changed by an order of magnitude.
  • Customer insight continues to be essential– Being able to rapidly respond to the expectations of today’s empowered customer clearly starts with a strong focus on customer insight.
  • AI is front and center– “If you don’t have an AI strategy, you’re going to die in the world that’s coming.
  • Consumer Experience– Consumers becomes tech-savvy, socially active and selective in their purchases. They prefer products and services that are personalized, matching their tastes and preferences.
  • Business Processes– Market place becomes more dynamic and adaptive to the new business processes. Enterprise building agile process helps to reduce lead-time for new product development and in addressing customer complaints.
  • Operating Model– Digital wave has not only changed the way enterprises operate but also how employees communicates and engage with customer.

What are the implementation challenges faced by Digital Transformation?

  • Unclear business case– Skepticism or regulatory concerns are legitimate reasons to be careful when investigating new technologies because of the cost constraints.
  • Regulation and reputation– Companies, especially in financial services, are taking a slow approach to social media for fear of regulatory sanction because of security concerns as it can have reputational repercussions beyond any regulatory penalties.
  • Multichannel strategy– Creating a multichannel strategy that includes the web as well as emerging technologies such as mobile and social media is not an easy task.
  • Open banking– There is a threat of risk challenge for traditional banks as the customers share their data with the financial institutions to execute direct transactions without going through the bank, which cannot be controlled.
  • Money laundered through open investment– Transaction platforms that never raised fraudulent suspicions before are now used to move money internationally by fake investors, scammers and terrorist.
  • Aligning business and IT challenge– Digital transformation, as the legacy system of banks was never designed to handle the complex applications and services of today’s digital landscape.
  • Data challenge– The data economy has shifted into a “decision economy” where the business that makes the best insight-driven decisions faster than its peers will gain a competitive edge.
  • Technology Integration Challenge– The integration process for new technologies causes delays as employees face acceptance, training and getting accustomed to new data management techniques.
  • Cultural challenge– Changing culture will always be more difficult than changing technology, and that’s why it’s important to proactively address the changes needed to instill a digital culture.

Difference between digitization, digitalization and digital transformation

Digitalization is the process of leveraging digitization to improve business processes. It means converting something non-digital into a digital representation to be used by computer systems and automate processes or workflows.

Digitization means the process of making everything digital that can be digitized and the process of converting information into digital format.

Digital transformation is the transformation of business activities, processes, products, and models to fully leverage the opportunities of digital technologies.

What is Omnichannel banking and how is it helping in banking services?

Omnichannel is about making the same set of services available to customers across all the channels, both digital and offline. It allows real-time data synchronization between different channels.

Omnichannel banking enables bankers and other financial service providers to provide secure banking services at all times and from anywhere. Customers keep shifting from one channel to the other. Therefore, banks are required to merge both physical and digital channels to have a grip on customer’s full history and offer multiple benefits to the customers like, mobile banking, online account opening, online loan applications, remote deposit, digital payment options, easy account management.

Need for omni-channel approach

As of today, various channels are working in their silos, but it’s time to break their silos and renovate the banking experience by instigating Omni-channel strategy. This approach is based on a single brand name, providing customer centric experience to each and every customer as per their preference and behavior just like an individual bank for every customer – and so smoothly transacted that it becomes seamlessly embedded in the customer’s lifestyle. Various channels, but not limited to, which are the part of the Omni-channel:

Branches: Up to 65 percent of customers prefer the branch for rich advice and personalized attention Mobile: 32 percent of the U.S. customers currently bank using their mobile devices

Video: More than one-quarter (28 percent) of customers value video access to remote experts

Social Media: There is emerging interest in tapping the power of social media like Facebook and Twitter to deliver financial services like making deposits

ATMs: Within more streamlined branches with a smaller footprint, ATMs can typically outnumber traditional tellers

Big Pieces of the Digital Transformation Puzzle

AI (Artificial Intelligence)

AI is creating intelligent machines using computer science ideology. It emphasizes on giving machines access to objects, categories, properties and relations between all of them to implement knowledge engineering, in order to make the machine work and act like human beings in every aspect. Apple’s Siri can be taken as an example of AI.

IoT (Internet of Things)

The Internet of Things (IoT) is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

Cloud Computing

Cloud computing is the delivery of different services through the Internet. These resources include tools and applications like data storage, servers, databases, networking, and software. It is an ability of storing data, processing data and accessing data via Internet from anywhere in the globe.


Blockchain is a technology that uses distributed databases and cryptography to record transactions in an ever-growing system of interlinked records or ‘blocks’ all synced with identical information. A blockchain functions as an open, decentralized ledger that effectively keeps track of transactions between two parties in a permanent and verifiable way.

Big Data

Big Data is the term that describes the large volume of data- both structured and unstructured- that inundates a business on a day-to-day basis. Big Data can be analyzed for insights that lead to better decisions and strategic business moves.

Robotic process automation (RPA)

Robotic process automation (RPA) refers to software that can be easily programmed to do basic tasks across applications just as human workers do. The software robot can be taught a workflow with multiple steps and applications, such as taking received forms, sending a receipt message, checking the form for completeness, filing the form in a folder and updating a spreadsheet with the name of the form, the date filed, and so on. RPA software is designed to reduce the burden of repetitive, simple tasks on employees.

Virtual Reality

Virtual reality (VR) refers to computer-generated environments or realities that are designed to simulate a person’s physical presence in a specific environment that is designed to feel real. The purpose of VR is to allow a person to experience and manipulate the environment as if it were the real world.

What are the steps for developing a transformation plan?

Once you receive a solid commitment from corporate leadership, you can align your organization up and down all levels of management, and obtain committed resources for personnel and funding. This approach makes development of a bank-wide plan more readily achievable. You can manage even the most complex plan by using consistent tools and standardized steps to:

  1. Map, prioritize and identify opportunities for digitization 
  2. Assess digital maturity  
  3. Guide the redesign of business processes

The process of transformation towards digital banking

Responding to the new competition: At an initial stage, banks react to changes in the supply and demand of financial services by developing new digital channels and products with which to position them in the new competitive environment.

Technology Adaption: The second stage in the banking digitalization process consists of making an in-depth change to the technology platform, to convert it into a more modular and flexible infrastructure to enable the assimilation of new technologies, as well as to speed up the development of new products.

Strategic positioning: The financial institutions, which are furthest down the road in the digital transformation process, try to make their major investments in technology pay off by adopting digital strategies that involve dramatic changes to their organizational structure.

The normal order of things is that industries change, and rules are adapted accordingly. Regulation should enable innovation, not hurdle it. Many legacy players in the sector are struggling with digital transformation, being heavily regulated since the beginning.

Two examples:

  1. Investment in software
    There is a specific issue in the way bank assets in Europe are evaluated, an issue that is blocking the further digital transformation and growth of banks. Current prudential rules prescribe that the use of banking software is penalized instead of incentivized. Software is still valuated as an intangible asset, making it less worthy than basic office furniture. In other words, EU banking rules treat software as a cost rather than an investment. Unlike in the US, European banks are forced to cover expenditure on software solutions with the same amount of capital, which should be changed.
  2.  Data regulation 

The flow of digital data between market players is a space that needs to be watched closely. The financial infrastructure can be seen as a long chain of trust and should not be broken at once.
PSD2 & GDPR are a good starting point for regulating the data age.
The EBA Fin-tech Roadmap, the Commission’s Fin-tech Action Plan and especially the Cyber security Act are milestones we welcome and support. We look forward to engage with the authorities and provide industry input where needed. It is what the EBF likes the most.

What are the ways in which leaders drive digital transformation culture?

Maintaining Transparency – Embedding digital culture means that everyone in the organization is aware of the impact of digital on operations, sales and revenue. People should be aware that their organization is going through a paradigm shift in daily operations. Ultimately, effective digital transformation cannot ignore the human element attached with it.

Encourages Collaboration – New-age technologies such as Artificial Intelligence, Robotics, Internet of Things and Big Data can only be integrated to daily processes and systems, if all the members of an organization are prepared to collaborate and work together to drive digital transformation. Leaders need to encourage and drive this collaboration within teams.

Invest in Skills – People need more than motivation to embrace new ways of doing things. They need skill set development, and not just technical but overall development to build new capabilities. It includes development of interpersonal skills such as effective communication, adapting to changes and emotional intelligence. Once these skills are established, a new culture can blossom successfully.

Focus on behavior to transform culture – Instilling new cultural characteristics requires a shift in values, mindsets and behaviors. Leaders need to model, acknowledge and recognize the behavior that drives the desired cultural change.

What are the prerequisites of digital transformation?

Connect the Dots– There are three key pillars to a successful digital transformation journey – Network Evolution, Digital Business and Customer Experience. By ensuring that your transformation efforts encompass all three pillars in a holistic way, you will be able to connect, monetize, and engage your customers to create new digital experiences.

Deliver Innovative Digital Services– Innovation is critical in designing digital services. This can mean providing an all-digital service or a product-as-a-service enabled by digital channels.

Take Advantage of the Latest Technology Innovations– Innovations such as highly scalable and reliable cloud and platforms, AI, ML, biometrics, and blockchain are all part of ensuring a successful digital transformation journey.

Integration– Integrated cloud and communications infrastructure, platforms, and services with service-based architectures and open application programming interfaces are essential as more people, devices, and “things” connect, communicate, and transact with each other.

Provide a thorough customer experience– Successful digital organizations put customer experience at the center of every process and operation in their digital transformation journey. They deliver a personalized, contextual and meaningful experience to customers across the entire customer engagement lifecycle.