Digitisation is now everywhere and is spreading like wildfire.
I am therefore writing a series of articles on the subject of digitalisation. My motivation is that digitalization means something different for every industry and type of company and I want to work out these differences. For an illustration of the differences in different industries, see the following figure.

In this section, I would like to discuss the very essence of this article and illustrate digitalization in the financial sector.

Characteristics of the industry

The core task of companies in the financial sector, such as banks, has always been the management of money. However, banks will have to renounce this in the future, because thanks to digitalisation, key functions, such as the issuance of money, are already being taken over by other agencies, such as supermarkets. As a result, the financial industry is increasingly facing pressure to move towards Work 4.0. The introduction of agile methods, which has been rather neglected to date, is now becoming increasingly important. Due to the lean processes caused by agility and the automation of tasks of the Daily Business, the aim is to save staff in the future and to counteract the low interest rate pressure. This makes digitalisation measures vital for institutions in the financial sector.

The current digitalization in the financial sector

While many companies in the financial sector have already completely automated key tasks of day-to-day business, customers have so far felt comparatively little of the advent of digitalization in financial institutions. Technological innovations are being promoted and implemented slowly by service providers such as banks. Instead, technology providers and fintechs are leading the way in the retail business sector.

In order to counteract the loss of important customers, banks are therefore increasingly relying on cooperation susbly with fintechs in order to be able to take advantage of their advancement of digital developments, e.g. to expand the range of products on offer.

Benefits of digitalization in the financial sector

Customers are now demanding the technological use of bank-related applications as a prerequisite for a good service. Functions such as online banking have long since become part of everyday life. Customers also increasingly want the link between offline and online banking and financial institutions are under pressure to respond to precisely these requests with an overarching range of services.
The combination of the sales channels that have been separated to date and the consolidation of these into a holistic concept as well as the modernization of internal processes and structures offer enormous efficiency and earnings potential for the financial sector.

Tip:

If you are as enthusiastic about this topic as I am, then you can find the entire series of articles here!

Genderhinweis: Ich habe zur leichteren Lesbarkeit die männliche Form verwendet. Sofern keine explizite Unterscheidung getroffen wird, sind daher stets sowohl Frauen, Diverse als auch Männer sowie Menschen jeder Herkunft und Nation gemeint. Lesen Sie mehr dazu.

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I blog about the impact of digitalization on our working environment. For this purpose, I present content from science in a practical way and show helpful tips from my everyday work. I am a manager in an SME myself and I wrote my doctoral thesis at the University of Erlangen-Nuremberg at the chair of IT Management.