How Digital Banking Software Development Changes Financial Services
According to AlliedMarketResearch, the global banking market size is expected to reach $10.8 billion by 2027. It is a significant increase from $3.95 billion in 2019. On the one hand, the numbers indicate the rising demand for digital banking software development. On the other, banks and financial institutions look for software development companies to help them translate digital banking services into their competitive advantage. In such a context, let’s explore the role of digital transformation in digital banking development, find out the driving factors of the phenomenon, and discover its benefits for the financial and banking industries.
What is digital transformation in digital banking development?
Small, medium, and large banks strive toward innovation and look for ways to adopt new technologies. From instruments like Artificial Intelligence (AI) to hybrid cloud solutions, technologies are improving the quality of services banks offer. With that in mind, there is a constant demand for digital banking development squads with expertise in the art of adopting digital transformation.
What constitutes digital transformation in the banking industry? In short, this phenomenon refers to shifting banking services from offline to online. For example, the most notable aspects of digital transformation in digital banking development are the following:
- Blockchain technology. Harvard Business Review supports the idea of Blockchain being the future of money.
- Artificial Intelligence and Machine Learning (ML). These tools grant better data analytics and processing of banking services.
These are the two pillars behind digital transformation that come along with digital banking software development. Essentially, you need Blockchain for greater transparency and security, while AI (along with ML), is a way for more efficient data management. Knowing what constitutes digital transformation, it is time to explore the factors driving the phenomenon.
What are the results of digital banking development?
Digital transformation and digital banking development come hand in hand. Factors driving one phenomenon are factors that drive the other as well. Taking a close look at aspects that take digital banking to another level, it is crucial to consider customer satisfaction, Minimum Viable Products (MVPs), and digital banking software development for employee upskilling.
Forbes indicates excellent customer satisfaction depends on how effective digital transformation is. Consumers have many choices, and companies should constantly look to offer personalized products and services. In addition, these digital shifts depend on security, transparency, and competitive pricing.
Respectively, while digital transformation and digital banking development open new horizons for boosting customer satisfaction, the process needs to be fully secure and transparent. With more consumers using digital banking services, there is a greater risk of data breaches. As a result, bringing digitalization to banking must go hand to hand with enhanced security.
Tapping into Minimum Viable Products (MVPs)
According to PwC, only 41% of banks and Financial companies believe they excel at developing MVPs. At this point, the number shows the disparity in how MVPs evolved. Respectively, being able to bring forward top-performing MVP drives digital banking development, as well as digital transformation. In turn, the reverse is true – greater MVP further promotes digital banking. Software development companies develop various microservices and APIs to help banks and Financial institutions to roll out their MVPs across multiple digital channels. Tapping into the full potential of MVPs is a direct portrayal of digital transformation’s success. In addition, the more digital banking development takes place, the higher the chance of more effective MVPs seeing the light. Yet, to build the best MVP, you need to know how to find the best Financial software development company to help you with that.
Banking software development and employee upskilling
The goal of digital transformation is automation. In turn, automation changes the nature of the work in the banking sector. Banks look for ways to automate different repetitive tasks to cut down costs. While some argue that automation might make some jobs obsolete, the truth is that with digital transformation integrated into banking, employees need to upskill to stay relevant. In such a case, digital banking software development drives employee upskilling. However, the more familiar people become with digital banking, the easier it becomes to build up digital transformation further. As a result, automation brought about by digital transformation urges employees to improve their skills. And with the rising expertise people working in the banking sector get, it’s easier to adopt digital transformation.
Benefits of digital banking software development in the financial sector
At this point, we know how digital transformation is linked to digital banking software development and what drives both phenomena. Now, let’s explore the key benefits banking software development brings to the financial sector:
- Cutting costs while driving revenue up. For example, investment in digital transformation and digital banking software development can boost up to 20% in revenues. In turn, automation brought by the phenomenon can reduce up to 30% in terms of costs.
- A better competitive advantage. Banks receive digital maturity through digital transformation and good digital banking software products. With digitization, banks can provide better services, build products faster, and become more competitive.
- Faster product development. Automating repetitive tasks and a greater digital transformation leads to faster-to-market products. The sooner a customer gets your digital product, the higher customer satisfaction will be.
- Improving digital culture and innovation. With digital transformation, you can promote greater digital culture. Employees will be more prone to accept innovation when exposed to such a culture.
- Enhanced digital banking security. As we mentioned above, digital transformation brings forward technologies like Blockchain. Blockchain technology boosts digital banking security and ensures more secure digital banking development when properly used.
These benefits put digital transformation and digital banking development software at the forefront of the banking industry. Yet, it is crucial to remember that only the correct application of digital banking tools ensures the benefits mentioned above.
Digital banking software development is a great way to make the most of digital transformation. In fact, both phenomena go hand in hand. Software development companies like nCube help banks adopt Cloud, Blockchain, AI, and ML to tap into the full potential of digital banking. Besides, among the factors driving banking software development are customer satisfaction, MVP development, and employee upskilling.
Finally, if you work with a trusted software development partner, there is a higher chance you get the benefits of digital banking software development, including cost reduction, increased revenue, faster product development, improved digital culture, and enhanced security.
Contact us if you need to build a team that specializes in building software for banks and financial establishments.