Do you know that the market size of Fintech digital transformation is likely to reach $29.97 billion by 2025, at a CAGR of 59.8% during the forecast period?
It’s no news that digital transformation has revamped the ways industries operate. Introducing digital technologies has made industries and businesses more technologically advanced and customer oriented.
Also, Read – What is Digital Transformation?
The new normal, post pandemic phase has led the way for digital transformation in how we live and businesses function today. Especially in the BFSI sector, companies ranging from startups to conglomerates have been partnering with top digital transformation companies to transform digitally, aiming to drive growth and success in effectively offering the experiences their stakeholders and end-users expect.
But how can businesses ensure they are in tune with the latest customer and technology trends and technologies?
Also, Read – How do fintech businesses know they aren’t failing?
By transforming digitally? But how can you ensure that your digital transformation efforts are in the right direction? Will it be suitable for your business to connect with business transformation consultants, or should you pave the way for your business’s transformation on your own?
Today we will address all these questions and examine how digital transformation revolutionizes the fintech industry. Ready to read? Let’s go!
Digital transformation & Rapid Growth in Fintech
Fintech digital transformation primarily refers to introducing digital tools and technologies in line with the market trends, emerging financial patterns, and changing consumer behavior aiming to enable businesses to profoundly adapt to the ever-changing customer requirements and make financial institutions more efficient customer oriented.
The new tools and technologies can be cloud-based platforms, big data analytics tools, developing fintech mobile apps, revamping business processes and organizational structures, and partnering with digital transformation consultants to develop scalable financial models.
From the above statistics, it is easy to conclude that the Fintech industry has been seeing tangible changes by adopting digital transformation and can cater to the dynamics of customer behavior.
1. How is Digital Transformation Benefiting Finance SMEs?
Digitally transformation has led financial businesses to experience enormous opportunities, which certainly doesn’t mean that traditional financial companies’ essence has faded; it’s just that now customers have an alternative to choose from at their convenience.
Let’s look at the benefits of digital transformation in the finance industry to understand how digitally transforming financial businesses can deliver an outstanding customer experience.
1.1 Greater Flexibility & Convenience
One of the most significant benefits of digital transformation in financial services is flexibility and scalability. Basically, traditional financial businesses aren’t built to adapt to the accelerating customer needs, thus imposing a hurdle for SMEs’ growth.
On the other hand, introducing digital tools and technologies to your business can yield numerous benefits. Empowering the SMEs to respond more quickly to changes in the market and customer needs can result in a competitive advantage and thus leading to more scalability and acceptance by the end users due to increased ease of use.
1.2 Increased Efficiency
Partnering with top digital transformation companies and bringing in digital tools and technologies like AI (Artificial Intelligence), data analytics, IoT (Internet of Things), Open Banking, and automation with improved data analytics and real-time reporting, digital lending platforms can pave the way for more efficient business operations and streamlined business results.
One of the best digital transformation examples is the KYC. Digitization has made the Know Your Customer (KYC) process more convenient and accurate. Getting real-time data from the customer by leveraging video-based or social security-based personal identity helps financial businesses analyze credit accurately, thus resulting in more informed decision-making and escaping fraudulent transactions based on the customer’s behavior and analysis of online transactions.
Also Read – 7 AI TRENDS AND PREDICTIONS THAT WILL SHAPE 2022
1.3 Simplifying Operational Complexities
We are a part of a highly vulnerable digital era. And as financial businesses, they must ensure that their online processes are highly secure, simple, and effective. But how can a business provide security and data protection?
Well, this is where digitally transforming the business comes into consideration. Introducing digital tools and technologies will seamlessly make the online processes secure and make the process more efficient, engaging, and user centric by implementing profound security measures to protect sensitive customer information.
1.4 Enhanced Team Collaboration
Another benefit of digital transformation in financial business is enhanced collaboration. For any business to succeed, having an intact internal team is one of the critical requirements. Bringing in digitally advanced tools and technologies that can streamline and automate work processes will ultimately lead to a more efficient and well-collaborated team and internal operations resulting in more significant business growth.
1.5 Unlocking advanced digital offerings
With the dynamically accelerating digital platform acquisition, financial businesses have acknowledged the increased demand for digital payment platforms, credit cards, and digital wallets.
However, SMEs across the globe have begun leveraging digital profits by offering simple, fast, and secure fintech solutions backed by advanced infrastructure processes.
With escalating consumer awareness of digital finance solutions, and SMEs trying to build the pace to drive their financial operations, the Fintech industry is poised to pull the best out of digital transformation opportunities.
2. Challenges of Fintech Digital Transformation
2.1. Data Security
Data security has become one of the major concerns in the Internet world. Especially in fintech, businesses are responsible for dealing with sensitive information, such as customer data and financial transactions. Thus the data is more prone to data breaches and cyberattacks, leading to loss of money or confidential information.
However, opting for digital transformation consulting services can help you build a robust fintech app in record time that can mitigate the vulnerabilities.
It is advised to build an app that is well equipped with features like:
- Two-factor authorization
- Biometric authentication
- Data encryption and obfuscation
- Real-time alerts and notifications
- Behavior analysis
2.2 Lack of standardization
Another challenge that most fintech SMEs face is the lack of standardization. By lack of standardization, we mean that until now, there is no one-size-fits-all solution for businesses to abide by; thus, it has become imperative for enterprises to pave the way to transform themselves and get ahead of the competition digitally.
However, partnering with a top digital transformation company can be one of the best decisions as you look for digital transformation.
2.3 Lack of Tech skills
Most organizations still use manually operated legacy systems and processes. Unfortunately, this often leads to a lack of skill development among employees who may not be familiar with new technologies or be unable to use them effectively. Which again can be addressed by opting for outstanding digital transformation consulting services. As these experts can empower businesses with the tech expertise, they need to thrive in the digitally advanced business era.
2.4. Big Data and AI Integration
It’s no news that big data and AI have highly impacted how businesses operate today. As a result, organizations are well equipped with tools and technology to effectively collect personal information about users, social status, financial behavior, habits, and in-app activity using big data.
In accordance with Big Data, AI can automate detecting fraud, performing a risk analysis, and managing transactions effectively. And since all Fintech enterprises aren’t well equipped with the tech expertise, you can always reach out to top digital transformation consultants to build digitally advanced tools and technologies that best suit your business needs.
With all that we discussed in the blog, you might have a fair understanding of digital transformation and its impact on the fintech industry. In addition, you might also have realized that digital transformation in the fintech industry will evolve enormously in a few years. And for businesses, it has become even more important to pave the way towards digitally uplifting their business operations.
As for entrepreneurs, chief technical heads, and decision makers looking to stay competitive, serve customers better and unlock new opportunities, our digital transformation experts at Copper Mobile can help scale and build better digital assets for your business. So without further ado, let’s connect and start exploring opportunities.