Digitalization of Offshore Banks is Long Overdue

We are living in a decade in which digitalization of various industries was highly forecasted - and expected. In an age where a majority of consumers are accustomed to controlling various areas of their lives directly from the palms of their hands, digital offshore banking is long overdue.

While there are many offshore banking options that do offer digital banking, there are still too many that don’t. For instance, some are still handling day to day tasks the old way, such as sending out paper correspondence. Some are in between traditional and digital banking, offering some online banking capabilities on a limited basis.

Today, however, consumers want to be able to do everything they need to do online. This is why the full digitalization of offshore banks is overdue.

(A Bit Too) Long Overdue?

There’s no doubt that digitalization is changing the landscape of banking. Fintech is a major industry that has disrupted traditional banking. With the recent coronavirus pandemic, more and more banks and consumers alike have seen why digitalization in the banking sector is so important. Still, digitalization was on the horizon ahead of the pandemic. The industry was well aware that digital banking would become a norm in the future, but the future is here already. Offshore banks need to act now to ensure that they stay ahead of the curb.

As reported by the World Economic Forum, Temenos and Economist Intelligence Unit (EIU) conducted a yearly global study on the future of banking. Year after year, we’ve seen the results of this study showing a wealth of favor for digital banking. This year, however, the results were staggering - and quite eye opening.

66% of respondents said that new tech would have the biggest impact on banking over the next five years. That was a 57% increase from last year. 77% of participants in the study believe that AI is going to be a major game-changer in the world of banking. More than 80% think that banking is going to become a part of a platform for other services.

What does all of this mean for offshore banking? It boils down to one thing: you snooze, you lose.

Offshore banking does have a few obstacles that onshore banks don’t have. For instance, tightening compliance and regulations, as well as a more dynamic structure, can block offshore banks from adopting digitalization quickly. Still, offshore banks only stand to lose if they are unable to provide the ease and convenience of online banking as being demanded by their consumers.

How Offshore Banks can Implement Digitalization?

So, how exactly can offshore banks implement digitalization and better serve customers? There are four 'tech pillars' offshore banks should construct:

The first, and perhaps most obvious, way would be through digital banking. This gives customers the freedom to open accounts and conduct transactions seamlessly at their convenience and at any time, without having to go abroad to do so.

Next, using blockchain technology can help offshore banks offer better, more secure services at a better price. This technology will replace older systems, such as Swift, with a better cost point.

Chatbots and AI (Artificial Intelligence) can be implemented by offshore banks to offer a better level of customer care with heightened continuity. Preset banking solutions can help provide customer care on the spot without the need for waiting on a human to intervene.

Internet of Things (IoT) can be used as part of digitalization to let customers communicate with their offshore bank from various devices.

While this might seem like a lot, these are the four pillars of banking digitalization. Once implemented, banks can save time and money while offering a better level of service to customers.

But What are The Real Benefits for Customers?

Offshore banking digitalization means a higher level of security and safety, as well as an advanced level of convenience.

The days of traveling internationally to handle offshore bank accounts can be long gone. Customers can enjoy better returns, since online banking means a decrease in overhead due to branchless banking. Customers can enjoy around the clock customer care and access to funds on their terms.

Takeaway

While digital offshore banking might seem like a no brainer for customers, it should be an even more obvious choice for the banks themselves. In moving to digital banking, offshore banks can better serve their customers. In fact, offshore banks only stand to lose if they continue to resist the switch to digitalization.

Although many offshore banks have already started the transformation, and some are leading the way in the fintech industry for their innovative approach to digitalization, there are still plenty of offshore banks that have not made the change yet.

As more and more consumers demand online banking and other digitalization in their financial endeavors, offshore banks that aren’t yet offering digital options are going to lose out on customers.