European financial services pursue digital transformation
The financial services industry in Europe is undergoing digital transformation. New entrants in the market, consumer habits and changing economic and regulatory environments are causing banking firms to evolve with disruptive business models.
Because more and more people are choosing mobile banking over in-person services at branch offices, banks need to charm their clients without having a location on every street corner. Regulators and customers expect banks to be always online. To meet these demands, banks must optimize cost structures and reduce expenses without interrupting service and causing disturbance.
Designing for digital transformation
Clearly, the rules are changing in this industry, and digitization is at the heart of the process. Banks’ business models, workforces, processes and services must radically transform to reduce costs, minimize risks and enhance value for customers.
Digital transformation offers a whole new opportunity for the financial industry in Europe. European banks are reacting to challenges by leveraging mobility, security, resiliency and cloud technologies in order to:
- Transform from traditional branch structures to digital channels.
- Embrace the API economy without compromising legacy systems.
- Focus on end-to-end cost reduction to be ready for anything.
- Keep on top of technology trends to anticipate the next shift in client behavior.
Tapping into new opportunities
To respond to the threat of disruption from new competitors and fintechs, banks and financial institutions will become more customer-centric by creating seamless interactions across touch points. New technology helps strengthen competitiveness in other ways , too. For example, collaboration with an ecosystem of service providers offers improved end-to-end solutions to clients, like the consortium of seven of Europe’s largest banks who recently joined forces to build and host a new trade finance platform based on IBM Blockchain.
Or, innovators like Danske Bank who benefit from the IBM Services Platform with Watson implement the power of cognitive and the IBM Cloud to deliver next generation IT services. After successfully testing the cognitive monitoring solution – IBM Operations Analytics Predictive Insights, Danske Bank saw a significant reduction of server incidents.
Bold moves like these help banks leverage economic and technology breakthroughs and enhance client experience using digital capabilities to deliver virtual self-service or provide immediate and transparent execution of transactions.
What do new technologies such as robotics, machine learning or blockchain mean for banks’ operating models and future cost bases?
By 2025, the banking landscape will include some new names alongside today’s well-known banking brands. Most leading financial institutions will be substantially automated, with customers mostly serving themselves and engaging with bank experts for more complex or personal financial advice and needs.
What is achievable with these technologies? We can’t wait to show you.