Evolution through digital reinvention in banking

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Today’s banking systems evolved from the first merchants bartering and carrying goods between early villages and towns. From there, banking expanded across the world in the form of lenders supporting trade across the Silk Road in ancient Greece, the Roman Empire, and the Han Dynasty. Our most closely related banking systems evolved in medieval and Renaissance Italy where banking branches were established throughout Europe.

Today, banking has evolved from those branches into the tens of thousands of brick-and-mortar banks across the modern world, and most recently into the millions of banking applications we carry around in our pockets on our smart devices. The next evolution facing banking institutions is taking place in the digital reinvention of our current and future technologies.

What’s causing this need for evolution through digital reinvention? Is it smartphone-carrying merchants; other advancements in technology like AI, data science and cognitive computing or new ways companies and individuals can conduct business by circumnavigating bank involvement with decentralized digital assets such as cryptocurrencies? The simple answer is: all of the above.

For centuries, banks have been involved in all facets of monetary/transactional business. From simple deposits and loans to more advanced risk modeling and channel management, banks have acted at one time or another as trusted intermediaries, service providers, asset managers, and market makers. Today, if banks want to continue to succeed, they must reinvent themselves once again from generalist to specialist by creating new products that enable banks to build better forms of customer experiences.

Digital reinvention at its most fundamental level reconceives banking using a customer-first or customer-centric perspective. Digital reinvention employs multiple technologies and approaches including cloud, blockchain, mobile, the Internet of Things (IoT), AI, automation, DevOps, Agile and Lean, but at the same time isn’t tied to any particular technology, and instead uses multiple supporting technologies. Here are a few examples of how digital reinvention is being used by banks today:

  • A bank in North America is using digital reinvention to improve its customer rewards program by using blockchain technology to give customers real-time data about their rewards account and a much better user experience.
  • A European bank has launched a Facebook app that not only allows customers to perform most banking functionality on standalone applications, but supports creation of personalized cards with photos, as well as mechanisms that facilitate customers making donations to charities most aligned to their interests.
  • A Turkey-based DenizBank is linking together its digital payment subsidiary fastPay with fintech start-up Qapel to launch an interactive TV quiz show. The show allows viewers to win Qapel cryptocurrency that is spent exclusively through the fastPay network, allowing DenizBank to acquire new customers and increase transactions on its network.1

What does digital reinvention look like? Banks looking to successfully digitally reinvent themselves like the ones above must first focus on developing more secure ways of creating compelling experiences, building and hardening platforms and monetizing new value opportunities. Second, they need to build new expertise by continuing their digitizing processes, functions and activities enterprise wide that will help support individualized experiences, ecosystem connectivity and transparency. Third, banks will need to identify and retain the talent necessary to create and sustain a highly digital organization that incorporates design thinking, agile working and that rewards experimentation. Lastly, banks will need to adopt a self-funding approach to protect and expand their platforms. To do this, they will need to deploy new technologies and release the latest digital tools in ways that support scalable growth and sustainability.

A report by IBM, Realizing tomorrow today: Digital Reinvention in banking, offers a deep inside look at the ways digital reinvention is shaping the banking and financial markets landscape. Inside the report you’ll find the path to digital reinvention, new strategic focus for a successful digital reinvention, the digital reinvention framework, and four steps banks can take to begin their transformation. With digital reinvention, banks and other industries will need to look past traditional pursuits of growth and be willing to blend strategy, technology and creativity to position themselves to handle the challenges of the future.

Learn more about how IBM solutions help banks digitally transform their organizations so they can innovate, operate and engage to generate value across the ecosystem here.


  1. Macknight, Joy. “The Banker Technology Projects of the Year Awards 2017.” The Banker. August 1, 2017.

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