Digital transformation in banking does not purely serve the purpose of enhancing customer experience; it’s the door to new opportunities and a true revolution in financial services. From hyper-personalisation to fully data-driven decision-making – there are a lot of possibilities that come with digitalisation. Do you want to find out more about them? Then keep reading this article!

Table of Contents

What Does the Term Digital Transformation Mean in the Banking Industry?

Digital transformation in banking refers to the adoption (and integration) of digital technologies and adjusted, innovative strategies across different layers of the organisation. While typically associated with the front office and some more complex processes regarding the client (e.g., autonomous digital onboarding), the digital transformation also includes back-office optimisation and digitisation. Hence, it’s a complex operation that takes a considerable amount of effort and time.

Despite that, digital transformation bears the utmost importance for banks. It comes with many benefits, from increased security to lower operational costs, higher customer engagement and even improved compliance. As a result, it should be the goal of all banks that are still not digitised or operate on legacy systems which block the full potential of the tools and applications available right now.

Digital Transformation in Banking: The Cornerstone of Increased Profits

Having defined digital transformation, let’s take a closer look at why it’s needed in banking. The best way to do so is to analyse the benefits that come with it. Take a look at them below.

Enhanced Customer Satisfaction and Engagement

It might be cliché, but let’s say it out loud – customer acquisition costs are higher than ever. This means one thing: banks must do whatever they can to retain customers since it’s simply the more financially effective option. Digital transformation is a way to do that.

With digital transformation comes higher customer satisfaction and engagement. These, on the other hand, build up loyalty – loyalty that you can forge into retention rates. But how does adopting digital solutions impact them in the first place? Here’s a brief overview:

  • Digital-only and mobile-only customers – Some banking customers are moving towards using only digital channels. If your organisation operates on legacy systems or lacks digital solutions, these customers will have a negative experience and, hence, will leave for your competitors.
  • Process acceleration – One of the most abandoned processes in banking is… customer onboarding. It’s lengthy and tiring for the customer. But with digitalisation and automated eKYC procedures, it becomes much more convenient. As a result, your customer’s experience is much better, and more customers are prompted to actually finish their onboarding.
  • Personalisation – With digitised banking, you don’t work on predictions – you work on data. This data can be used, for instance, along with AI, to personalise the content and offers your customers receive. In turn, these customers will feel more cared for.

Lower Operational Costs

Another key advantage of digital transformation in banking is that it significantly reduces operational costs. Despite requiring some initial investment, IT solutions generally help optimise internal processes. Add to this digital process automation, and you get a mix of higher productivity that leads to lower recurring expenses.

What are the examples of solutions that lead to this? Namely:

    • Appointment management app – An appointment management app lets customers book meetings after office hours, reducing the time your customer agents spend on… making appointments.
    • Document processing toolsAI document processing enables you to extract data from unstructured documents automatically, reducing the costs of doing so manually.
    • Loan origination solutions – Again, since they automate the process, you save money on doing this manually.
  • Campaign & notification management solutions – A campaign & notification manager is a tool with which you can overview and manage all your notifications in one place, streamlining communication with your clients.

Improved Compliance

You also need digital transformation in your bank to improve compliance and avoid potential fees and penalties. How does this work? Once again… take a look at a few examples.

  • Document processing – Returning to AI-powered document processing, such systems can be trained to flag any clauses that might be non-compliant. Afterwards, your employees can analyse, evaluate and change them (if required), avoiding backlash in the future.
  • AI-powered fraud protection systems – While they won’t replace human agents, such systems can learn patterns that humans wouldn’t spot and hence flag potential fraudulent transactions for you to investigate.


Newer technologies are undoubtedly better in terms of protecting your sensitive information. This is why, if operating on legacy systems, you need to conduct digital transformation as soon as possible in your bank. Otherwise, you risk breaches and potential loss of trust from your clients.

Digital Transformation in Banking in Practice: How to Approach It?

Digital transformation in banking is always helpful, but to get the maximum out of it, you need to plan it carefully. What should you consider?

  • Data integration – Make sure you use solutions that can be integrated. This way, you can make better-informed decisions based on the most accurate data.
  • The range of technologies – There is no single digital transformation in banking. The term may include creating a mobile app, merging your IT systems, designing an AI model (even a generative one!), utilising biometrics, and embracing OCR – there are tons of technologies that can build up your stack. Consider which ones you need and what role they will fulfil before planning your transformation.
  • Training your teams – Technology is helpful, but it’s just a tool – the people using it need to know how to do this. Therefore, do not limit yourself to introducing new systems and replacing the old ones – prepare workshops and training on how to use the new solutions.
  • Assess priorities – You won’t conduct a full digital transformation overnight; this is both too costly and too time-consuming. Therefore, you need to select your priorities and start with them.

The Takeaway

Digital transformation brings a lot of fresh opportunities to the table, especially when banking is considered. Thus, do not be afraid of it – embrace it instead and reap the benefits as soon as possible. And if you need further help, don’t worry – you can contact us at Ailleron and we will prepare tailored solutions for your organisation!

You may also read: Digital Transformation in Finance: Challenges and Benefits

Ailleron - Revolutionising Banking through Digital Transformation


Ailleron Marketing team includes digital marketers and content creators who provide insights and expertise from across the organization, including #AilleronExperts. For media queries, please get in touch with us via our contact form.

abstract lines

Let’s make financial experiences
easy and enjoyable together!

Tell us what you need and we will contact you shortly.

Tell us what you need and we will contact you shortly.