Every business pursuing a digital transformation strategy sits somewhere on a continuum of implementation and adoption. Many banks are at the starting end of this continuum — the “toe in the water” phase, as described by the Journal of Financial Services Marketing. To reach the “freestyle swimming” (growth) phase and the “deep dive” (transformation) stage, banks must find and invest in the technologies that support their business goals.
McKinsey notes that the best strategy is to refine a digital transformation roadmap over time and prioritize investments in areas that will have the most impact across the entire organization.
“Leaders who invest in tangible changes to business-as-usual structures, processes, and systems give their organization the best chance at achieving the full potential of its transformation,” the report states.
Automating and digitizing core functions in consumer and commercial banking, payments, risk management and compliance can also achieve big payoffs, according to Fortune.
Here are some technologies banks can invest in to start or accelerate their digital transformation journey.
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The Value of IoT Gateways
Banks can use Internet of Things technologies and location data to deliver personalized services, determine the optimal number of ATMs to place at specific locations, target relevant mobile experiences and more. But the success of broad IoT use cases may hinge on the use of IoT gateways.
The Internet of Things — whether through physical devices or software programs — compiles data and makes sure that data traffic is transmitted to its intended destination. With an IoT gateway, a physical device or virtual platform connects sensors and IoT devices to the cloud. This gateway allows separate devices to communicate with each other.
However, not all IoT gateways are the same. “Modern IoT gateways often allow bidirectional data flow between the cloud and IoT devices,” according to Check Point. “This allows IoT sensor data to be uploaded for processing and commands to be sent from cloud-based applications to IoT devices.” To ensure success, banks should determine how they want to use IoT devices first, and select an IoT gateway second.
EXPLORE: These financial technology solutions make seamless transactions happen.
Get Optimal Connectivity with SD-WAN and 5G Networks
Connectivity within a banking system is critical, which is why software-defined WAN and 5G networks can make or break an IoT initiative. Fast performance and optimal networking are also hallmarks of a modern company.
Between offering easy, reliable network management, improving network performance, strengthening network security and enabling hybrid cloud success, SD-WAN is an essential solution for banks. 5G networks can also help maintain low-latency communications, improve reliability of connections across different work settings and support private networks.
85%
The percentage of banks that have yet to migrate to the cloud
Source: Fortune.com, “Banks Are Finally More Clear on Cloud, but There’s Room for Improvement,” June 14, 2023
Improve Security with Sensor Technology
Businesses deploy sensors for a variety of reasons, but the biggest one is that they are sophisticated, small and affordable. Sensors can scan for irregular foot traffic in branch offices to improve security. Motion-activated sensors connected to lights and HVAC systems can also help banks reach their sustainability goals by conserving energy during periods of low occupancy.
IoT enabled sensors can also track changes in the market, supplying financial institutions with real-time data. This gives banks more precise market monitoring and financial risk capabilities.
Additionally, smart ATMs rely on a range of sensors, not only for security but also for normal operations and to identify the proper operational range for its environment.
DISCOVER: CDW digitally transformed its business in 2024.
Stay Agile with Cloud-Based Solutions and Collaboration Tools
For banks looking to shift away from on-premises modernized and legacy infrastructure, cloud-based solutions and collaboration tools are ideal options, allowing banks to unify, clean and analyze their data in one place where it can be accessed by cross-functional teams. Cloud platforms are cost-effective compared with the expense of managing on-premises architecture, and with their ability to automate security within the platform, small and midsized banks can better compete with industry giants.
Eighty-five percent of banks have yet to migrate to the cloud, according to Fortune, which notes that “cloud, when done right, can help reduce expenses and also power AI technologies to allow for greater tech advancements like smarter chatbots or greater functionality for mobile banking.” Working with a tech partner can help a financial team get started.
