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Digital Transformation in the Banking and Financial Services Sector


The future of banking is digital. Technologies such as online payments, mobile banking, and e-commerce that were in their infancy 20 years ago can now be accessed at the touch of a button — as banks and financial services from start-ups to institutions are adopting new technologies and services across the board.

Digital transformation in the banking and financial services sector largely involves a shift to offering online and digital services from in-branch banking in a top-down approach, integrating digital systems, customer experience platforms, apps, and infrastructure. Technologies that are being adopted include blockchain, artificial intelligence (AI), cloud computing, machine learning, and customer data collection, management, and analysis. With the increasing adoption of FinTech (innovative technology that supports banking and financial services) disrupting the sector and attracting the interest of regulators and prompting tighter regulatory standards.

But what will this digital transformation look like? In the coming years, transactions will become contactless as automation and blockchain are integrated into finance operations, and reporting will switch from traditional cycles of quarterly or monthly reporting to real-time. Self-service will become the norm and AI will facilitate new service delivery models. Non-traditional competitors such as Google and Amazon are also entering the banking and financial services market.

As the sector goes through this digital transformation, the potential for financial crime is growing. Increasingly sophisticated activity from bad actors involved in cybercrime, payment fraud, terrorist financing, and money laundering is growing in line with the global increase in e-commerce, online banking, and instant payments.

As a result, financial institutions are facing a challenge when it comes to ensuring they are compliant with changing global regulations, all while identifying and preventing cybercrime, payment fraud, terrorist financing, and money laundering. Regulators are focusing on existing policy areas such as climate risk, digital currencies, technology, and innovation in addition to newer focus areas such as operational resilience and anti-money laundering compliance. Compliance teams using only traditional rules-based compliance risk and fraud detection solutions are likely to become overwhelmed by the volume of alerts and they risk failing to detect and report suspicious behaviour. Instead, banks and financial institutions need to stay ahead of their compliance requirements to prevent potential financial impacts and reputational damage.

To do this, financial institutions need to constantly update the way they operate. As consumers demand faster, seamless, and more secure transactions when banking and shopping online, financial institutions must continuously adopt new operations to improve their service and keep customers safe.

At Eastnets, we help financial institutions navigate an uncertain world and support their digital transformation by providing protection against financial crime, fraud prevention, and cybersecurity services.

As a trusted partner to the financial industry for over 35 years, including 11 of the top 50 banks in more than 120 countries, everything we do is underpinned by intuitive technology and a thoughtful approach to innovation. With our agile technology, our customers can stay safe, secure, and compliant. Read more about Eastnets’ solutions here.

Author


Saeed Patel, Group Product Development Management Director

Saeed Patel is Group Product Development Management Director at Eastnets. Saeed has over 25 years' experience working in capital markets, risk management technology firms and as technical advisor to European regulatory boards. Saeed is a Chartered Management Accountant and holds a BA (Hons) in Business & Finance.

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