The Digital Transformation of the Economy and Society

To understand the future scenarios that are drawn for banking, the executive director described the context of the digital transformation that the economy is experiencing, and society in general. The interconnectivity derived from mobile technology has led this change. On the other hand, data analysis techniques allow increasing hyper connectivity between people and machines, known as the Internet of Things.

What will be the next technological frontier? Everything points to artificial intelligence and automation, which will have a significant impact on the labour market and will be an essential part of industry.

The Digital Transformation of the Financial Industry:

The arrival of this disruptive force (the digital revolution) is modifying both the supply and demand of financial services. On the demand side, experts said that they are witnessing radical changes in the consumption and savings patterns of a whole generation. The two new generations of digital natives – the millennial and centennials – are already consumers increasingly influential. And on the supply side, the sector faces great competition from new financial players such as fintech and internet giants and technological challenges that will decisively affect the quantity, quality and price of financial services.

In this context, there are two forces that will be fundamental when determining the speed of change and the scenario in which the sector moves. The first is internal: the vision that entities have of the future and their capacity for technological, financial and organizational transformation.

This ecosystem places the client as the biggest beneficiary of the changes that have occurred, those that are underway and those that will come. But this digital revolution also implies challenges to the stability of the financial system (for example, cyber security), the protection of customer data and consumer protection, among others.

With this change of context in mind, regulators and supervisors have the challenge of creating a regulatory framework that balances the impulse to the digital value proposal with the protection against its possible risks. Read Full interview of Sean St John National Bank on Fund raising here as fund raising plays an vital role in any business.

The Future of Banking:

Will banks have a prominent place in this future environment? The executive director believes that it will depend to a large extent on which scenario they are facing, which could be, roughly, some of these two, or a combination of both:

In the first possible scenario, banks and regulators would continue to do things as they have been doing until now evolving into mere providers of infrastructure and leaving the value propositions to other players.

The second scenario is the result of a proactive strategy in which banks complete their metamorphosis and become very competitive players in the digital environment. The key will be to offer a good user experience, restoring its reputation and offering reduced prices thanks to the incorporation of automation processes.

This model requires profound changes in technology and strategy but also in the politics of talent and culture within financial institutions: that is, a complete reinvention of the banking business. Banks can also take help from any expert like Sean St John on this.

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