As we enter year three of the unpredictable Covid-19 pandemic, increased digitalization remains a crucial goal for many firms looking to stay ahead of curve. This is particularly true for financial firms aiming to further deepen their relationship with clients by offering customized investment solutions or receiving alerts on unusual transactional activity.

Customer experience continues to be a major driver for digital innovation, according to technology firm Broadridge, which found via its global survey that improving customer interaction is the highest priority (77%) for financial firms in the next two years.

In terms of types of technology, the Broadbridge survey reveals that financial firms consider artificial intelligence, blockchain and cloud as key technology tools to bring their respective businesses to the next level.

Progress on blockchain-based processes, for example, leapfrogged in 2021 compared to the previous year with 37% of financial firms indicating that the implementation of their blockchain project has reached the middle to advanced status compared to only 15% in 2019. Meanwhile, most of the financial firms surveyed have established their cloud computing setup to do away with legacy systems that have been a hurdle in streamlining and making better use of their data.

The next few years will be critical for financial firms, as new entrants look to take away market share in the highly competitive and opportunistic markets in the region. In the financial hubs of Hong Kong and Singapore, for example, virtual banks pose new competition in acquiring and maintaining clientele.

“In some markets, fintechs are already serving 30% of customers and generating 3 to 5% of banking revenues,” cites a recent McKinsey report on global banking, which underscores the need for banks to bolster their digital processes to ensure they don’t get left behind.

While the momentum is there for financial firms to transform their systems, there are a number of hurdles they need to address internally including keeping up with the latest digital trends, creating a clear roadmap for technology deployment, and being able to modernize legacy IT infrastructure.