As digital channels and devices proliferate, as tech-savvy consumers shift behavioral patterns and expectations of what “good service” means, and as business models undergo digital transformation, businesses in the banking and financial services, and insurance (BFSI) sector are understandably working feverishly to stay ahead of the industry growth curve.

All while, they must remain focused on the fundamentals like cost reduction, revenue growth, and risk mitigation. For these businesses, digital transformation means more than technological adjustments; it impacts everything from customers, employees, and partners to products, services, and processes. The challenges are real. The potential rewards can be great.

Identifying the challenges

Customer
Manage diminishing consumer trust and escalating demands for privacy
Understand where, when, and how to engage each customer in real time to meet their evolving needs
Monitor customer perceptions and interactions to identify what attracts them to the brand and what creates distance
Implement the right omnichannel customer engagement strategy to reduce churn and cultivate long-term loyalty

2. Product

Leverage data-driven insights to differentiate brand offerings
Gauge customer interest in different products based on behavioral, transactional, demographic, psychographic, and contextual data
Personalize products and services for the individual customer
Identify, strategize, and implement more efficient product distribution processes

3. Business model

Develop a win/win business model for customers and partners
Continue to reduce costs and grow profits without compromising customer, employee, and partner relationships
Assess the viability of the new business model in terms of costs and ROI
Balance regulatory compliance and business agility

4. Technology

Map out existing tech-stack and identify gaps
Create a map for integrating the various systems in the tech-stack
Plan how to effectively use the data stored across systems
Develop a roadmap for seamlessly transitioning to new solutions with minimal disruptions to customers, partners, and employees
Explore how current and new technologies may impact business model
Identify and minimize technology-related risks during and after implementation
Calculate the costs of digitizing data to support the technology transformation

5. Skills

Determine and address any existing skill gaps that could impede the digital transformation
Identify any new skill sets required
Plan training and change management initiatives to develop new skill sets and ensure smooth implementation

Seizing the opportunities of digital transformation

Integrate all distribution channels

By eliminating data and communication silos, BFSI businesses can achieve greater cost efficiencies and deliver more consistent customer experiences across touch points. As brands reduce fragmented, uncoordinated communications, they will very likely see increased product or service consumption, reduced churn, and improved referrals.

Connecting online and offline touch points

A true omnichannel approach engages customers wherever and whenever they prefer—both online and offline. This requires the ability to accommodate new channels and devices as well as audience identity resolution capabilities for seamlessly connecting online-offline interactions and accurately attributing offline conversions.

Continuously unify and augment customer data

To personalize and optimize customer engagement, the business must consolidate its audience data to achieve a singular customer view. It must also continuously enrich individual audience member profiles with new data from both internal and external sources. This enables brands to replace assumptions with data-driven insights to create frictionless, contextually relevant customer journeys and maximum impact.

Develop capabilities to respond to customers in real time

Given the constant shuffle of customers between the online and offline worlds, businesses needs the right capabilities to monitor their behavior and respond to critical, highly specific triggers in real-time—and at scale—with highly personalized messages, offers, product recommendations, and more.

Derive customer propensities to optimize communications and transactions

With robust AI and machine learning models, brands can derive individual customer propensities for channel, time, content, offer, and more. This will eliminate spray-and-pray communications and optimize individualized customer engagement.

Orchestrate unique customer journeys for different product and service types

In the highly competitive BFSI marketplace, businesses must orchestrate dynamic journeys that evolve with the individual customer. It will need to develop and continuously improve the capabilities to pinpoint the products and services most suited to each customer as they interact over time and across touch points and channels.

Design new business models to maximize the potential of new technologies

New technologies will likely create new opportunities for growth. For instance, asset-light and crowd-sourcing-enabled business models could empower the BFSI organization to more clearly differentiate its product and service offerings, accelerate customer acquisition and revenue growth.

Ensure organization-wide commitment to transformation

As noted earlier, digital transformation will impact the entire BFSI organization and thus requires cooperation and collaboration from employees across departments. A successful digital transformation hinges on more than simply the right technology. It can succeed only through the willingness of all stakeholders to be individual agents of change.

Globalization and innovation will continue to transform how customers perceive and interact with brands. BFSI businesses must develop a clear understanding of what “digital transformation” means for them, develop the strategies to manage it successfully, and acquire or develop the processes, tools, and talents to make it sustainable.

Digital transformation. Opportunities for growth in the BFSI sector.