By Bhairav Trivedi, CEO, Crown Agents Bank

Globally, the pandemic has accelerated the adoption of digital financial services, driving banks to accelerate their transformation programmes. As the world continues to grapple with the long-term effects of COVID-19, the limitations of the current banking landscape are being exposed and most banks are still only beginning to integrate technologies such as machine learning and artificial intelligence as part of their digital transformation strategy.

In addition to enabling new levels of efficiency, digital transformation can also create the opportunity to provide enhanced customer value. This is especially relevant in saturated markets where customers can easily choose to bank elsewhere. To meet consumer demands and match today’s pace of innovation, business and financial leaders are looking to digital transformation to remain competitive.

Financial institutions need to adapt to the digital age sooner rather than later if they want to keep up with – or even outperform – the competition. In 2021, 14 million Britons had an account with one of the digital banks and a little over 1 in 4 adults in the UK (27%) opened a digital-only bank account by 2021, indicating a threefold growth compared to the 9% share measured by January 2019.

Here are some ways that financial services companies can successfully accelerate the focus on digital transformation.

Mobile wallets

Some of the most prohibiting factors to financial inclusion worldwide include limited transport infrastructure and low bank penetration; this is particularly pertinent in emerging and frontier markets, where it can be physically difficult even to reach a bank and open an account. By removing some of the biggest obstacles, namely having to be at a bank in person, digital financial services like mobile wallets offer an accessible way for people to fulfil their financial needs. Over the past few years, digital wallets have overtaken traditional banking methods that have proven themselves unfit for purpose in these regions, and digital payments in Africa have experienced a surge in volume and adoption as a result.

API-enabled technology

APIs (Application Programming Interface) have been around for decades and they have the proven potential to transform businesses. By the end of 2024, the global API management market size is expected to reach $6.2 billion from $3.02 billion in 2019. The introduction of APIs within banking gives both customers and businesses the freedom to access all banking data in real-time, offering more accurate and up-to-date financial insight as a result. As an example, at Crown Agents Bank we recently introduced an API-enabled interactive portal that allows customers to send and track pension payments and returns in real-time, drastically improving user experience both for the pension provider and for the end consumer. By enabling financial institutions to connect with businesses and consumers to transfer information securely and conveniently, APIs are having a profound, transformative effect on banking.

Biometric technology

Biometric technology, such as voice recognition and touch ID fingerprint sensors, has been widely popularised by mobile phone providers in recent years. In addition to easing data privacy and security concerns, biometric technology is supporting the provision of low-cost affordable financial services, facilitating remittance flows into urban, semi-urban and deep rural locations in emerging and frontier markets.

This technology is particularly well suited to the banking industry and offers significant advantages for the bank and end-user alike. Certain forms of identification, such as passwords, are easy to counterfeit, which has led to a surge in identity theft. To counteract this, the industry is increasingly looking to digital solutions such as two-factor authentication and voice verification to enhance security and protect the financial information and identity of consumers.

For example, Crown Agents Bank recently launched a suite of digital solutions (EMpower

Pensions) to address the underlying causes of financial inclusion with the elderly. EMpower Pensions offers effective, end-to-end pensions management from one easy-to-use interactive platform, including Biometric Facial Authentication proof of life technology that serves as the perfect ancillary service to their core international pension payroll offering.

By providing access to enhanced digital pension services through an intuitive, secure digital proof of life platform, pension administrators can more efficiently and effectively verify the pensions payments that are being delivered to entitled beneficiaries whilst mitigating fraudulent activity and overpayments.

A company-wide digital transformation in banking and financial services isn’t without challenges, and there is no shortcut. Ultimately, businesses will benefit by offering services and solutions fit for the modern consumer. Companies will be more competitive and adaptable in today’s digital world – and in the one of tomorrow if they invest in a digital transformation now.