What factors slow down the digitization of banking?

The world of banking has undergone a very significant change in its business model due to digitization. While in the past they lived in a physical services model, today the digital world drives banks to take new changes in search of redesigning their business model. Vector ITC Group, a Spanish capital 100% technology company, warns of the most common factors that tend to slow down the digitization process.

“The banking business is engaged in a profound shift to the digital world due to the globalization of the economy, greater regulation (PSD2, Open Banking, etc.) and increased competition from the same sector and from other industries (Fintech and Over The companies Top) “, explains Javier Agulló, Sector Director of Vector ITC Group. “In addition, the emergence of new players in financial intermediation, which have much smaller cost structures and more agile processes have caused customers’ habits to change.”

Banking continues to make efforts to update its digital structures, but they are not yet enough to make a full migration to the digital world. Proof of this is that, according to the AEB, only 13% of the banking customers are fully digital.

The main factors that prevent the digitization of banking

Vector ITC Group analyzes the main errors of digital banking and its potential solutions:

  • Security: Although it is one of the areas of action in which banks place the most emphasis, they still face security issues. In this sense, the areas of improvement focus on the verification of the user’s identity, as well as the security of data and transactions. To do this, Vector ITC Group highlights Blockchain technology, which allows to increase the capabilities to verify the identity of customers of computer systems. Vector ITC Group has several banking solutions including AIR SCAN (instant identification technology for all online payment processes, booking, and identification) AIR WALLET (allows the user to make all payments through the smartphone in a secure and personalized way thanks to contacless and biometric technology) or blockchain technology for asset management.
  • Replicate traditional operations in the online world: Banks must understand that digitization goes beyond mere conversion into traditional transaction stakes. The customer, however, demands faster and more simplicity. For this reason, banks should be able to design a digital strategy focused on providing more satisfying experiences. To do this, RPA technology is a successful option, as it allows the automation of processes by means of software robots with automatic generation of incidents, as well as the blockchain technology that provides speed, efficiency, the cost optimization and reduced time to market.
  • Bureaucratic processes: Avoiding long waits in bureaucratic formalities and speeding up time to market is a must. Customers change their demands faster and faster, so it’s critical to adapt almost immediately to new scenarios. Therefore, banks should bet on using Agile methodologies, a standardized set of concepts, practices and criteria capable of reducing up to 75% in the ‘Time to market’, a 50% in operational failures and productivity increases of up to 50%.
  • Digital culture: In digital transformation technology is as important as culture. Every transformation process must be accompanied by a change in the mindset of all the people who are part of the organization. Culture is closely linked to the way technology adoption is carried out, and the ability to innovate depends directly on it. Therefore, the process of managing change is presented as a key and differential aspect that determines the success of a digital transformation process, together with that of technological resources.

“To undertake a successful digitization process it is essential to have a high knowledge of the sector itself, as well as the latest technologies. In addition to these factors, at Vector ITC Group we also have a high degree of experience carrying out this type of process, accompanying the client from the first step to the end of the journey“, says Javier Agulló, Sector Manager of Vector ITC Group.