Digital Transformation of Banking Sector by using new technology

Introduction

In assignment 1, AI application was analyzed in the banking and financial operations, for which Federal Financials Bank of Australia was focused. The given case study discussed that the bank was facing major challenges of efficient transactional banking services, quality services to meet competition, and problems of extending customer service. Also, it faced problems in developing personal relationships with online customers and delivering transactional and value-added services to the customers. For this, an artificial Intelligence (AI) application was suggested to manage the financial operations of the Bank, efficiently. Based on the initial analysis, the application of AI technology was revealed to be aligned with the needs of the Australian banking sector.

Based on this, this assignment will first evaluate the potential impact of the six possible banking applications for AI (given in the case study provided) on areas: strengthening customer service, building the trust of stakeholders, improving the effectiveness and efficiency of managerial functions such as planning, decision making, control, and coordination. Additionally, the report will discuss how the bank could achieve its key objectives by investing in AI. Furthermore, the report will propose suggestions for Federal Financials Bank, to incorporate AI in specific areas. Lastly, the report will explain new digital skills and capabilities development required by the bank to embark on the digital transformation process of the bank.

Discussion

Digital transformation in the banking sector can be explained as a comprehensive combination of digital technologies, which help the bank to change its operation and deliver value for the customers (Ajayi-Nifise, et al. 2024). This transformation involves introduction and evaluation of modern technologies and revolutionizing the ways of providing banking services (Bueno et al. 2024). New technologies and digitalization also transform the strategical and cultural change within an organization (Ajayi-Nifise, et al. 2024). Similarly, Federal Financials Bank of Australia is planning to go through a digital transformation, by adopting AI technology to fulfill multiple objectives and support different functions and goals of the bank. For which, it will evaluate the potential of AI and its impact on specific areas. Additionally, the banking sector and the financial sector are facing challenges, due to technological developments and the process of digitalization (Bueno et al. 2024). This requires the banks and other financial services to transform their business models, with using new technologies (Jameaba, 2024). Similarly, the case study proposed six changes in the business model of Federal Financials banks.