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Legacy modernization: A great way for banks to keep up with the new digital generation

October 1, 2021 | Published by |

With the changing market demands and thriving digital opportunities, traditional banks struggle to adapt new-age business models and transform their banking services. Banks aiming for financial inclusion must truly embrace next-gen technologies like data analytics, artificial intelligence (AI), robotic process automation (RPA), and edge computing to deliver improved digital banking services and enhanced customer experiences. Banks can leverage these technologies to better understand their customers and make real-time products accessible through multiple banking channels.

Traditional banks must explore new ways to capture customers’ interest. Banks must modernize the legacy system and leverage the power of advanced technologies to revamp their operating models and create a digital ecosystem to offer services beyond banking.

Here are the top three reasons why banks must modernize business models right away:

To cater to the changing market expectations

With increased access to digital channels, customer behaviors and demands are also changing. More and more customers prefer internet banking, mobile application banking, and other digital channels for their banking needs.

According to Statista, The number of global online banking users is forecasted to reach 2.5 billion by 2024. This digital shift has been further accelerated by the social distancing and lockdown measures imposed during COVID-19, compelling customers to avail themselves of omnichannel banking services.

Banking services are not just limited to financial transactions, as customers nowadays expect banks to offer services beyond traditional banking, such as providing financial advice. Growing demand for neo banks and fintechs compels traditional banks to transform their legacy systems, making them best attuned to changing customer demands, market patterns, and technological developments.

To deliver compelling customer experiences

Banking is a very competitive sector. Customers are buying banking products not just from banks but also from companies outside financial services, including retail, telecommunications, and technology. To serve the customers better, banks must understand them truly and keep track of the latest customer trends and demands.

Technologies like AI, cloud, and data analytics help banks dig into heaps of structured and unstructured data collected over time. These advanced technologies enable banks to store and manage data in an organized way and make it digitally accessible across diverse databases to pull out information regarding customers’ credit and lending history to serve their clients better. Leveraging data analytics, banks can gain better insights and provide personalized real-time products and services for delightful customer experiences.

To reinvent operating models for better efficiency

Traditional banks must focus on new-age technologies to transform business operations. This transformation will reduce manual efforts required for tedious banking processes like form filling, freeing up human resources for valuable roles, and help reduce the chances of human error. Automating processes like customer onboarding and KYC verification also bring productivity and efficiency, allowing banks to serve their customers faster.

Banks have started to acknowledge the need to optimize and digitize current operating models to save operation costs and boost higher revenue. With changing business goals, newer approaches need to be implemented for better results. However, before deploying a full suite of technologies, banks must focus on synchronizing them with customer needs and future business goals.

Banks shifting to modernized business models have the upper hand over traditional banks operating on legacy systems in driving business benefits around product innovation, time to market, customer experience, operational efficiency, and operational resilience.

Legacy modernization has become imperative and is not a choice for banks anymore. Banks seeking a seamless shift to a modernized business model can connect with the team of professionals at Arttha. Arttha is a unified fintech platform enabling banks and financial institutions to deliver exceptional customer experience on top of the next-gen technology-based solutions. Get in touch with the experts now.

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