Home Slider The Wave of Digital Transformation Shows No Signs of Slowing

The Wave of Digital Transformation Shows No Signs of Slowing

by internationalbanker

By Vadim Kulik, Deputy President and Chairman, Management Board, VTB Bank





Once known for being slow to adapt, the banking sector is now at the nexus of implementing new technologies around the world. Having undergone significant digital transformation in recent years, a whole new world of opportunities has opened up for banks, partners and customers. Despite this extraordinary pace of change, the industry shows no signs of slowing down. Digital transformation is no longer an added bonus; it’s an imperative for a bank’s success.

Today, in order to be successful, banks must predict, utilise and optimise digital technologies, offering customers the products they need before they even realise it. There are key trends that the industry can, and should, adopt to keep pace with growing customer demands and expectations.

Mixed reality

Perhaps one of the most significant trends in banking is that of “mixed” reality, a combination of virtual reality and augmented reality. This technology shift is in part due to the prevalence of smart devices, which have changed the way we live and bank. Based almost entirely on a customer’s journey, mixed reality will change the way a customer experiences banking services and ultimately make the difference between retaining him/her or watching that customer go to a competitor. In the future, all these applications—whether biometrics or voice assistants—will enable virtual journeys through which customers are served.

To create mixed reality, data-processing and data-exchange technologies, trust technologies (application programming interface [API], blockchain, open banking), voice assistants and multiple others are needed—making it no easy feat. These technologies help create a new reality in which the lines are blurred between the digital and analogue worlds. Currently, this technology is being implemented to focus on the journeys and interactions that matter most to customers, such as locating automated teller machines (ATMs) and bank branches. However, the possibilities are truly endless, and it is up to each bank to take advantage of this trend’s potential by providing personalised customer experience—before a competitor does.


Few customers wish to visit a branch anymore and speak with someone face to face in order to carry out atransaction. A visit to a banking office is now seen by many as an inconvenience that does not fit in a fast-paced, modern life. However, despite this, some customers still want to talk to someone to complete processes or transactions, just without lengthy waiting times.

The trend of using machine communications and voicebots means that customers will be able to carry out online processes and even transactions by speaking via applications. These new services will be convenient, quick and informative, guaranteeing that customers are able to get the best experiences possible but on their own terms.


Robotics is changing the way banks and finance companies carry out business across multiple areas. Through ATMs, wealth advisors and chatbots, robots are already commonplace in the banking industry. Primarily used to deal with the industry’s more “monotonous” tasks, this trend demonstrates clear benefits to both customers and employees. Banking institutions are already using robots extensively, allowing their human counterparts to shine through more creative tasks. Via both behind-the-scenes operations and customer experiences, robots will continue to be invaluable moving forwards.

Safety is king

Technologies related to ensuring security in data processing are also likely to develop rapidly. As we see more AI (artificial intelligence)-based products created, which require as many different classes of big data as possible, data-security risks also increase. As we move forward, the banking sector will have to compromise on how to reap the benefits of big data whilst ensuring customers are still well protected.

There are already some solutions, which will be further explored in the future. Technologies have started to appear that allow the confidentiality of primary data to be maintained and, at the same time, models to be built on them, after certain manipulations. One example is data fusion, whereby the neural network “wraps” primary data whilst ensuring that decryption is almost impossible. Alternatively, MPC (multiparty computation) technology, a type of data matching without disclosure of primary data, is available. Through this technology, banks are able to build neural networks over data classes and teach them to “talk” to each other, combining them and building the next processing floor.

Competition or collaboration?

The banking sector is undeniably competitive, and in the current climate, it is a matter of innovating or being left behind. However, not a single bank has all of the materials, employees or expertise needed to implement large-scale digital-transformation projects. This has meant a clear shift in the banking sector’s attitude: a new openness to collaboration.

The emergence of fintech (financial technology) companies has created a new wave of digital products and emerging practices for how these products are created. Put simply, many large and established banks are hampered by legacy IT (information technology) systems and historic processes, and fintech innovators are the ones that can move swiftly. However, whilst fintechs can quickly innovate, they lack what banks have built over time: the trust of customers and established positions in the industry. Through collaboration, both entities can solve the other’s problems. Partnerships have become essential to banks’ innovation, and there seems to be no sign of this trend stopping.

A new workforce

As much as customers influence how banks operate, employees do, too. As banking changes, so does the criteria for what creates an ideal banking specialist. Russia, in particular, has a strong history of innovation and scientific knowledge, which already creates an advantage when searching for new talent. Two clear components make an ideal specialist.

The first is professionalism. This is not only about skills and productivity but also creativity, the ability to make non-standard decisions. As robots take over many tasks, an increasing reliance will be placed on banking professionals to constantly reflect and offer innovative solutions.

The second component is emotional intelligence. For a large team of people to work in a similar way and move towards a common goal, constant information exchange is needed; for this, they need to listen and hear. This is impossible without empathy. The ability to communicate, feel and anticipate is a basic competency that should be highly valued moving forwards.

What does the future hold?

We’re truly living in one of the most exciting periods for banking innovation. The digital-transformation wave has not yet crested. New technologies and innovations are set to continue disrupting the way we live and operate, and it is up to us to harness them. It’s vital that we continue listening to and hearing from customers, optimising services as we do. In an ever-changing market, it’s no longer acceptable to keep up; instead, we must stay ahead—stay ahead of trends, customer demands and competitors. Only by doing so can we cement a bank’s role and its future through innovation.


Vadim Kulik is Deputy President and Chairman of the VTB Bank Management Board. He joined VTB in 2019 and was hired to drive the bank’s digital-transformation strategy. He brings a wealth of experience and has worked at the forefront of Russian banking innovation for many years.


Related Articles

Leave a Comment

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.