Digital Transformation in Finance – Trends to Watch Out For

Around three-quarters of all banks and credit unions in the US launched a digital transformation initiative in 2022, with another 15% expressing their plans to do so—as per the What’s Going On in Banking Study. The goals of financial institutions are clear: greater personal loan approval, reductions in operational expenses, and increases in payments revenue and other non-interest income. How are they achieving their aims, and what are the dominant trends that will be shaping the near future of digital transformation in the finance sector?

Conversational AI

Senior Forbes contributor, Ron Shevlin, argues that financial institutions need to make conversational AI a key component of their digital strategy. This is because abandonment rates for digital product applications in banking are notoriously high. Consumers are often confused about the information they are required to provide, and banks aren’t following up on their reasons for abandonment quickly enough. AI can bridge the communication gap while also codifying and storing data far more quickly than human beings can. What’s more, chatbots can be easily upside without the need for additional training hours, while also offering optimized service costs. As such, savvy financial institutions are employing smart bots for everything from providing information to selling products, displaying product benefits, and executing tasks (such as informing customers of their application status).

Blockchain Technology

Blockchain provides financial institutions with a cutting-edge, safe means of identifying, recording, storing, and managing assets, and it also has an important role to play in investment. It is easy to see the extent to which this technology can streamline financial processes. For instance, complex tasks such as matching payments to invoices can be automated, thus reducing the time and energy involved in carrying out this task. It can also be used to help different financial systems to compare data on a specific company. This shared bank of data can be used to improve decision-making processes by providing a more complete picture of a company’s financial performance. Blockchain has the ability to revolutionize access to banking service, knocking down many current barriers to opening accounts. It can additionally be used to provide customers with access to more novel means of finance, including microfinance. Because it tracks all assets, transfers, and ownership, blockchain is refreshingly transparent. What’s more, it reduces operational costs and provides cutting-edge protecting against cyber criminals.

 Smart Mortgages

Online mortgages are the order of the day, and new trends are making digital borrowing easier, quicker, and safer. Top companies are offering clients features such as importer tools, which allow users to receive real-time interest rates in minutes. Savvy companies are also looking into technologies such as blockchain-based contracts, AI chatbot advisors, cloud computing, and robotic process automation (RPA). The latter is a technology that empowers robots to perform rule-based workflows. RPA is ideal for reducing the time associated with mortgage applications, since it can be used to audit loan documents, input applicant data into systems, and upload files. Deloitte’s survey shows RPA adoption reaches the breakeven point in less than twelve months. It also leads to 90 percent improved accuracy, 86 percent increased productivity, and 92 percent greater compliance.

Real-Time Analytics

The Finance 2025 Report by Deloitte indicates that current financial reporting systems will change. Instead of being provided with monthly or trimester reports, financial institutions and clients will be looking at real-time data, analysis, and charts. In other words, the financial health of companies will be accessible without the need for reporting intervals, empowering financial institutions to make important decisions faster. Currently, the impacts of data sprawl are vast. For instance, companies that work with multiple financial institutions have to work with multiple bank statements, often provided in various file formats. All of this makes it more difficult to convert data into insights. Because they lack a unified data store, companies may make decisions based on inaccurate information. Having access to real-time data boosts payment efficiency and provides real-time access to a consolidated ledger that is accessible to an entire organization.

Digital transformation is a major priority of most financial institutions, and those that have completed (or are close to completion of) their transformation are reaping big rewards. Just a few trends that will demand continuous improvement include conversational AI, blockchain technology, and smart mortgages. Real time analytics, meanwhile, is a vital means through which to reduce error margins and provide updated information that financial institutions and clients alike can base decisions on.