DNA of Digital in Financial Institutions
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The Financial industry in the contemporary landscape stands as one of the most dynamic and transformative industries. Technological advancements, evolving regulations, cybersecurity threats, and fluctuating global economic conditions have collectively reshaped the operational framework and strategic outlook of this sector.
Two decades ago, Financial Institutions were reliant on archaic ledger systems, manually recording transactions. This laborious process meant daily operations were bogged down by manual entries, leading to an annual reconciliation task of gargantuan proportions. Audit officers would seclude themselves for days on end, halting operations until the meticulous reconciliation process was completed.
Not only that it was the era of Brick-and-Mortar Dominance. Physical bank branches were the primary interface for customers. Most banking transactions, from deposits to withdrawals, required a visit to a branch location. Online banking was in its infancy, and mobile banking was virtually non-existent.
Many banking processes, including account opening, loan applications, and account maintenance, relied heavily on manual paperwork. This led to slower processing times and increased the likelihood of errors.
Looking at digital presence, very few financial institutions offered basic online banking services, such as checking balances and transferring funds, the digital presence of financial institutions was limited compared to today. The internet was primarily used for information dissemination rather than comprehensive financial transactions.
Due to limited exposure to technology financial institutions predominantly offered traditional banking products such as savings accounts, checking accounts, mortgages, and personal loans. Complex financial products such as derivatives and structured products were typically reserved for institutional clients.
