For Users’ Sake, Financial Sector Digitalization Is Now Urgent

The accelerated adoption of on-demand services in entertainment, education and other areas of personal and professional life has resulted in a growing need for digitization of services in every industry. As stated by consulting firm IDC, over 50 percent of businesses expect between 1 and 25 percent of their income to come from this new offer.

The financial sector is not exempt from this phenomenon. As people's lifestyles continue to change, they are expecting to receive better experiences with financial services for 24/7 access, ease, and confidence in their use, as well as special features that respond to their specific needs. The expectation is that users of financial services will acquire new services or switch providers based on the offer that best meets their needs.

Outperforming the competition no longer depends on keeping a presence in each territory or on the number of services offered. Growing the customer base depends now on the institution's ability to innovate and personalize the user experience. 

The security of both sensitive information and their financial assets and transactions is among clients' main concerns, given the challenging context in which we live, where large and prestigious companies have been affected by cyberattacks.

Companies in the financial sector must leverage technology to gain a competitive edge and grow. In fact, IDC reports that in Mexico, 27 percent of organizations offer products, services, and digital experiences due to customer demands, while 26 percent do so because the competition provides them. As a result, we believe the sector will not be able to take a step backward from digital transformation.

Figures from the Bank of Mexico indicate that during the last quarter of 2021, more than 14 million users were added to the internet banking service, representing a growth of 25 percent compared to the same period in the previous year.

The country’s financial sector has high business potential; adopting new technologies can provide users with the service they are looking for. In addition, artificial intelligence, next-generation security, the Internet of Things, automation, and blockchain are expected to post double-digit growth rates for the next five years in the country.

Among the benefits of implementing these technologies, it is worth highlighting the strengthening of security, the ability to detect fraud within corporate and user operations, identify complex patterns to predict behavioral models, make real-time predictions, and gain better knowledge of customers, allowing for personalized products and services.

Although the financial sector is the vertical that most takes advantage of and adopts new technologies in its business processes, with a compound annual growth rate (CAGR) of more than 25 percent for the period from 2020 to 2025 in Mexico, there are still challenges to be solved.

Hosting new technologies in the cloud becomes a great driver for digital transformation and the true engine for innovation. The banking sector alone is expected to deliver a compound annual growth rate of over 48 percent from 2019 to 2024.

Other significant advantages of the cloud include the agility it offers for provisioning an environment in a matter of minutes, elasticity to maintain the level of service during peaks in demand or seasonality, scalability to grow the services offered based on the needs of the client, and the immediate provision and processing of the information that is stored.

The cloud contributes to reducing overhead expenses, since the total cost of ownership of infrastructure decreases significantly and companies pay only for the capacity they need. As a result, the institutions are in a better position to optimize resources and assign them to other areas or concentrate them at the business’ core.

Customer demands, together with the advantages offered by the cloud, mean the digital transformation of financial services is no longer an alternative. In today's world, continuing to bet on technological innovation is a requirement.

At AWS, we work every day to become true allies for the sector in its digital transformation journey. Our motivation is to meet end users' needs and solve them quickly and thoroughly so that they can enjoy the benefits that technology provides, such as having a better quality of life.