Digital transformation in BFSI is a type of solution, which develops innovative technology to change traditional business processes. It helps companies to streamline back-office processes such as accounting and legal documentation and to deliver services to consumer conveniently. In addition, digital transformation allows insurance and banking industries to streamline their business process and to publish product information digitally.
Furthermore, blockchain technology is being explored for purposes such as cross-border payments, smart contracts and supply chain finance. Cryptocurrencies have captured the attention of investors and have become increasingly integrated with traditional financial systems. Moreover, BFSI digital transformation has made digital payments much easier, safer, and faster. People send and receive monies at the click of a button on PC or using mobile phone. This has considerably reduced the rush at the bank, thereby saving lots of time for both the customer and the bank. Therefore, these are the digital transformation in BFSI market trends in recent years.
Furthermore, major market players have adopted various strategies to increase competition and offer enhanced services to their customers. For instance, in April 2023, the EY organization announced an alliance between FintechOS, a financial technology company, and Ernst & Young SRL to simplify and support the launch and services of banking and insurance products and support detailed transformation journeys through innovation, business knowledge, and the implementation of FintechOS’ fintech enablement platform. This collaboration has the potential to transform how banks operate, from data management processes to product development and customer service. Across Europe, banks have made steady progress to digitalize their systems and processes, however, the pace must increase as competition from other industries grows.
Moreover, in March 2020, Lloyds Banking Group announced a new strategic collaboration with Google Cloud, as part of its commitment to invest £3 billion to help drive its digital evolution and overall cloud transformation program. The collaboration was part of the Group’s technology strategy that is built on its multi-cloud approach. The collaboration added Google Cloud to the Group’s portfolio of technologies, accelerating its ambition to deploy smarter technology and better experiences for its customers across the UK. Therefore, such strategies foster the digital transformation in BFSI market growth.
On the basis of technology, the AI segment attained the highest digital transformation in BFSI market size in 2022. This is attributed to the fact that AI has been using hidden historical data of customers that helps banks and fintech to identify customers’ requirements and to fulfil customers’ need, which increase the demand for AI in BFSI industry.
On the basis of region, North America attained the highest digital transformation in BFSI market share in 2022 as major banks and financial institutions in North America adopted the latest technologies such as AI, ML, blockchain, and others, to increase their customer experience and to improve their business portfolio across the region.
The pandemic has significantly pushed the demand for blockchain technology in the BFSI industry. This is mainly attributed due to large number of banking and fintech industries adopting blockchain technology for providing secure and safe transaction channels for their customers. In addition, increase in customer demand for online purchasing, increase in use of advance technologies in operation and rise in use innovative technology such as artificial intelligence in business decision making capabilities, are some of the important factors that boosted adoption of digital transformation in BFSI industries during the COVID-19 outbreak. Therefore, COVID-19 had a positive impact on the digital transformation in BFSI industry.
Key Findings of the Study
- By component, the solution segment led the digital transformation in BFSI market in terms of revenue in 2022.
- By deployment mode, the on-premise segment led the digital transformation in BFSI market in terms of revenue in 2022.
- By enterprise size, the large enterprises segment led the digital transformation in BFSI market in terms of revenue in 2022.
- By technology, the big data and business analytics segment led the digital transformation in BFSI market in terms of revenue in 2022.
- By end user, the banks segment led the digital transformation in BFSI market in terms of revenue in 2022.
- By region, North America generated the highest revenue in 2022.
The key players profiled in the digital transformation in BFSI market analysis are Accenture, Alphasense Inc., Cognizant, FUJITSU, Google, LLC, HID Global Corporation, International Business Machines Corporation, Microsoft Corporation, Oracle Corporation and SAP SE. These players have adopted various strategies to increase their market penetration and strengthen their position in the digital transformation in BFSI industry.