The need to move to a more digital banking model has been talked about for almost a decade, but COVID-19 has made the need for reduced operational costs and improved digital experiences more important than ever. Financial institutions of all sizes must reassess their existing business models, core systems structure, distribution networks, commitment to innovation and product assortment for a marketplace with more demanding consumers, more agile competition and shareholders who are looking for greater efficiencies.
In the near future, banks will be dealing with an accelerated pace of change in the digital market. Post COVID-19, digital banking distribution will be of central importance, as the pace of competition and innovation in digital banking between financial institutions is likely to accelerate. This will require financial institutions to adapt to changes and uncertainties at a breakneck pace, thus putting a lot of strain on legacy technology infrastructure. The COVID-19 pandemic has moved technological innovations to the top of business agendas in 2020, propelling digital transformation particularly among banks and financial institutions. Let’s see the main changes:
Digital Signature & Digital ID are already essential requirements
Identity verification underlies many of the core processes associated with digital banking services, with financials required to subject their customers to strict identity checks, both to protect those users’ finances and to meet regulatory compliance demands. Digital ID solutions can help iron out these identity verification headwinds, in the process providing a foundation for banks to bat away the growing threat to their core business from industry insurgents. Digital IDs, when done right, can help banks ease identity verification pain points for their customers while also helping them slash operational and compliance costs. The coronavirus crisis brings the need for effective digital identity into sharp relief, as social distancing measures are imposed worldwide: remote access to systems and services is more in demand than ever, and calls are growing on governments to forge a path out of lockdown.
The pandemic has acted as an accelerant to a trend: the steady migration of most everyday digital banking activities to mobile apps and online portals. Digital Signature is a technology that allows any kind of document to be signed remotely, in real-time and with full legal effect, thanks to the certificate of evidence generated by each transaction. Time is of the essence as banks work to distribute these funds, and the adoption of digital signature technology with built-in capabilities for audit trails and workflow automation can dramatically streamline the process.
Businesses Demand Paperless Payments
Despite the rise of new payments technologies, many businesses still use paper checks. However, business professionals pointed to real-time payments as their top B2B payments priority. Access to these technologies — real-time payments, tap-and-go and cryptocurrencies — will be critical for engaging and retaining commercial customers in 2020. Faster payments will enable improved liquidity management, quicker supplier invoice settlements, instant disbursements of insurance claims and reduced exposure to fraud. Improved commercial payments technologies provide opportunities for banks to enhance customer experiences and grow profit through increased transactions and fees. But as more digital players enter the B2B payments space, incumbents will need to act quickly to avoid being left behind by more nimble competitors.
New banking ecosystem based in a new partnership
The impact of technology on digital banking model has been profound. Technological advances have affected payment systems, capital markets activities, credit extension and deposit collection. For decades, banks have controlled digital forms of money and payments through regulatory protection of deposits, exclusive access to the central bank settlement system and close partnerships with credit card companies. The challenge today comes from a variety of digital assets that do not sit on the balance sheet of banks: cryptocurrencies, electronic wallets, stablecoins, or balances with a telecom provider. The competitive advantage of the new entrants is not based on the asset itself, but on the payment technology associated with it. The convenience of payments and the connections to other parts of the growing digital life of consumers and business alike, accelerated by the COVID-19 crisis, has been the key to success.
Does your banking business need to use digital signatures to streamline your processes and strengthen your management?
If you would like to know more about the advantages of digital authentication and integrity, request a demonstration and see for yourself, or contact us. We are here to help you and answer all your questions.