Digital Disruption in the Banking Sector

The study discusses the impacts of digital disruption in the banking sector. The work-centered analysis before and after the digital disruption has shown the advantages of the digitization. However, certain steps need to be taken for the full digitization of the banking system. Overall, the digital disruption is preferable for the banking sector.

Running head: DIGITAL DISRUPTION IN THE BANKING SECTOR
DIGITAL DISRUPTION IN THE BANKING SECTOR
Name of the Student:
Name of the University:
Author Note:

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DIGITAL DISRUPTION IN THE BANKING SECTOR
Executive Summery
The main aim of this paper is to discuss the impacts of the use of advanced technology in the
banking sector. The changes those are happened for the implementation of the digital technology
are called digital disruption. The effect of digital disruption is evaluated in a certain way in this
paper. At first the work centered analysis is evaluated before the digital disruption followed by a
retrospective analysis if the banking system. The work centered analysis is done after the digital
disruption and certain changes are noted. The comparison between the past and present scenario
is done in order to evaluate the advantages of the digital disruption in the banking sector. It can
be concluded from the study that the digital disruption is preferable for the banking sector.

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DIGITAL DISRUPTION IN THE BANKING SECTOR
Table of Contents
List of Abbreviations and assumptions made:.................................................................................3
List of Assumptions made:..............................................................................................................3
Introduction......................................................................................................................................4
Discussion........................................................................................................................................4
Background and problem definition:...........................................................................................4
Work centered analysis:...............................................................................................................5
Work centered analysis of the bank before the digital disruption:..............................................5
Retrospective analysis of the banking system before the digital disruption:...............................7
Work centered analysis of the bank after the digital disruption:.................................................7
Analysis of the new process after the digital disruption:.............................................................9
Recommendations:......................................................................................................................9
Implementation of the recommended plans:..............................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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DIGITAL DISRUPTION IN THE BANKING SECTOR
List of Abbreviations and assumptions made:
WCS- Work Centered Analysis
List of Assumptions made:
The impacts of the digital disruption in a company can be well explained with the help of
WCA. The component of WCA depends on certain factors. The WCA analysis indicates that the
implementation of the digitization can be beneficial for the company.

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DIGITAL DISRUPTION IN THE BANKING SECTOR
Introduction
The advancement of technology has its impact on various sectors. The application of
technology is also considerable in case of banking sectors. The banks are aware of the changing
of the technology and are eager to adopt the new technology in order to make the services more
easily accessible to the users. It has been found out in a survey conducted by Nordea that the
increase of the uses availing the online and net banking facilities has grown up to 90% in 2014
(Oshodin et al. 2017). Figure shows that the demands of the users are changing. Using
technology in the banking sector has made the services like switching between banks, making
payment through bank easily available to the users in a cost and time effective way. The
application of the digital innovations in the banking sector has made the business more
competitive both for the technological companies and the banking organization (Curley and
Salmelin 2018). This study will discuss the certain impacts of digitization in the banking sectors
in order to do this, the impacts of the digital disruption in a particular bank is evaluated (Arnold
and Jeffery 2016). The comparison of the situation before the digital disruption in the bank and
the situation after the digital disruption in the bank is done in order to make the recommendation
and conclusion. In order to carry out the analysis more effectively, the work centered analysis is
done on the particular bank. The challenges and the advantages that the bank can phase due to
the digital innovation is also discussed in this study.

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DIGITAL DISRUPTION IN THE BANKING SECTOR
Discussion
Background and problem definition:
The innovations of technologies and their implementation on the banking sectors are
bringing the significant change in the service systems of the banks. The use of technology in
different sections of service such as making payment and other bank account related services has
made the baking easier for the consumers (Lee 2015). These type services are known as net
banking or e-services provided by the bank. These services are cost effective in nature, for both
the consumer and the banking organization. Using technology is also making the service to be
served accurately and taking the small time span.
Work centered analysis:
There are six fundamental elements in the work process analysis.
 Customer
 Product
 Business Process
 Participants
 Information
 Technology
Work centered analysis of the bank before the digital disruption:
Customer: Customers used to withdraw or deposit the money to the bank account. The
process is done manually. The customer had to go to the bank and had to fulfill certain
formalities for these services.

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DIGITAL DISRUPTION IN THE BANKING SECTOR
Product: The bank checks all the fields in the forms submitted by the customers and
proceed according to the requirements of the consumers. The consumer can get the services after
the verification and transaction process.
Business Process: Major activities of the bank:
 Handling and managing the consumer’s account.
 Doing the transaction.
 Deposition of cash.
 Update the balance of the account.
 Closing of the customer’s account.
 Printing of confirmation.
 Opening the new bank account for the new customer.
Participants: The participants in the whole business process are the customers of the bank
and the employees of the bank. The services were demanded by the consumers and the
employees did the proceeding according to the demand of the customer (Ibegbulem and
Andersson 2017). The whole process did not stand in the absence of any one participant.
Information: During the course of the business process, exchanging of information did
happen in a large scale. The information is sensitive in nature ads it holds the personal details
along with the account information of the consumers.
Technology used by the bank: There was little use of technology in the process. The
requests for services, made by the customers were initially processed by the bank employees in a
manual way. The use of technology did used for doing certain things like maintaining the record
of the accounts of the consumer along with the customer database, checking the amount of

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DIGITAL DISRUPTION IN THE BANKING SECTOR
balance in particular account and counting the currency (Walker 2014). The storage was mainly
server based storage.
Figure 1: WCS before digital disruption.
(Source: Created by author)
Cu stome r(Cl
ien ts of the
bank)
Pr odu ct (M anu al
pr oces s ing of t he
s erv ices )
B u sin e ss P ro ce ss(All
th e s erv ic e sp r ovi d e d
b y re tail b a nk in g
in clu ding -ca sh
wi th d raw, cas h
d ep o siti on )
Participants:
Clients of
Information:
Users account
information
Technology:
Manual

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DIGITAL DISRUPTION IN THE BANKING SECTOR
Retrospective analysis of the banking system before the digital disruption:
The banking system before the digital disruption was heavily based on the manpower.
The processing of the forms submitted by the consumers for availing the service was processed
manually by the employees of the bank. There was a chance that a mistake may occur during the
course of verification. It has been found that such mistakes did happen and it had a large impact
on both the account holder and the bank. The processing was based on the manpower, so, it used
to take much time to process. Thee consumers had to go to the bank for availing the service,
which could sometimes become impossible for them (Dermine 2017). The whole system was
doing well but there were lots of scope for the improvement of the banking system (Tornjanski et
al. 2015). At that time the main challenge for the bank was to introduce a error free service to the
consumers and easy detection of the frauds.
Work centered analysis of the bank after the digital disruption:
Customers: The customers deposit, withdrawals the money from the bank. The
consumers can avail these services after going to the bank or they can avail the service through
the internet. All services are available through internet, so that the consumers of the bank can
avail services without going to the bank.
Products: The products or the services are made available in both online and offline
mode. In case of the offline service the consumer has to go to the bank and avail the services in
conventional way. In order to avail the services online, the consumer has to access the portal of
the bank through internet. The user has to give the right information including the bank account
number and the user id number in the portal to avail the services (Bughin 2017). The bank has
implemented another way for withdrawal of the cash. The money can be drawn using the ATM

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DIGITAL DISRUPTION IN THE BANKING SECTOR
of the bank, for that the user needs to have a ATM card and confidential and secured PIN
number.
Business Process: Major activities by the bank-
Online process:
The bank has created a dedicated portal where the user can login using their user id and
can access all the services of the bank (Agrawal 2017). The portal is connected to the server of
the bank. The user activity can be monitored by the bank officials. However, getting the online
facility, the consumer needs to go through some paper work for one time.
Offline Process:
In case of offline process, the user has to go to the bank and has to do formal enquiry
regarding the services and fill up the forms accordingly. The employees of the bank then process
those request manually.
Information: The information used in this system are confidential as , it holds the
information regarding the customers and their account numbers. In case of online banking and
the use of ATM the user id and the Pin of individual user is important.
Technology: The bank has implemented different advanced technology to initiate the
online banking. The bank has taken a policy to migrate the storage system partially to the cloud.
This will help to save the cost and the will provide better storage system (Omarini 2017). The
bank has also implemented the ATM system where, the ATM server is connected with the bank
and the transactions made through the ATM will be observed by the bank.

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DIGITAL DISRUPTION IN THE BANKING SECTOR
Figure 2: WCS after the digital disruption
(Source: Created by author)
Analysis of the new process after the digital disruption:
The banks have seen certain advantages after the implementation of new technology.
 Customer satisfaction: The customers are satisfied with the banking experience. They can
avail service through online banking which saves their time and makes their banking
experience better. Moreover, from the ATM they can withdrawals the money during any
time of the day.
Customer
s(Clients
of bank )
Pr odu ct s (e-
Ser vices
pr ovide d on
diff er ent s ecto rs
by t he b an k)
B u sin e ss P ro ce sss(T h e
p ro ce ssi ng o ft he d a ta
e le ct ron i ca ll y i n ord e r
to pr ov id e the
se rvi ces)
Technology:
Advanced
technology ad
use of ATM
Participants:
Clients of
the bank
Information:
User’s
information

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DIGITAL DISRUPTION IN THE BANKING SECTOR
 Cost effectiveness and better use of resources: The use of the technology in the banking
sector enables the fair use of resources and the online banking helps to reduce the cost
overhead. It indirectly helps in the growth of the business of the bank.
 Better security: The adaptation of the technology in the banking system reduces the risk
of mistakes those could be happen in case of manual processing (Hunter, dela and Dole
2016). The works can be done in a small time span using the technologies.
 Transparency in the process: The use of the technology has made the whole banking
system clear and transparent.
 Availability of service: The technology has made the banking system available for 24*7
hours. The consumers can avail services through internet at any time of the day.
Recommendations:
There are certain advantages of the digital disruption have been concluded from the
discussion. However, it can be assumed that the banking system has partially adopted the use of
technology. In order for the full digitization of the banking system certain steps are needed to be
taken care of. This are-
 The awareness regarding the online banking among the consumers.
 The security system of the transactions through online is needed to be improved.
 The bank should think to migrate the data fully to the cloud.
 The bank can recruit a team of dedicated IT experts to maintain the whole system.
Implementation of the recommended plans:
The migration of data to cloud can be done after taking advice to the cloud security
experts. They can ensure the implementation of the whole system along with maintaining the

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DIGITAL DISRUPTION IN THE BANKING SECTOR
security. The awareness among the uses can be done through providing the guidelines among the
users. In order to implement the fully digitized system the company can take advice of the
external consultants.
Conclusion
It can be concluded from the paper that the digital disruptions in the banking system can
be helpful for improvisation of the services. In order to develop the proper implementation of the
digitization of the banking system, the work centered analysis of the current infrastructure is
needed to be done. This analysis can help to understand the different components of the existing
system. The work centered analysis of the infrastructure after the digital disruption is done in
order to know the improvement. For further improvement, the recommendations are made. It can
be said proper implementation of digitization will deliver positive result in this sector.
References
Agrawal, R., 2017. Disruption in Banking in Emerging Market Economy: An Empirical Study of
India. Economic Analysis, 50(3-4), pp.20-31.
Arnold, D. and Jeffery, P., 2016. 5 The digital disruption of banking and payment
services. Research Handbook on Digital Transformations, p.103.
Bughin, J., 2017. The best response to digital disruption. MIT Sloan Management Review, 58(4).
Curley, M. and Salmelin, B., 2018. Digital Disruption. In Open Innovation 2.0 (pp. 15-25).
Springer, Cham.

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DIGITAL DISRUPTION IN THE BANKING SECTOR
Dermine, J., 2017. Digital Disruption and Bank Lending. European Economy, (2), pp.63-76.
Hunter, S., dela Cruz, V. and Dole, D., 2016. Financial Inclusion in the Digital Age.
Ibegbulem, A. and Andersson, G., 2017. Managing Customer Loyalty in the Digital Era of the
Banking Industry.
Lee, D.K.C., 2015. On the edge of disruption.
Omarini, A., 2017. The Digital Transformation in Banking and The Role of FinTechs in the New
Financial Intermediation Scenario. internationl journal of trade, economics, and finance, 1(1),
pp.1-6.
Oshodin, O., Molla, A., Karanasios, S. and Ong, C.E., 2017. Is FinTech a Disruption or a New
Eco-system? An Exploratory Investigation of Banksr Response to FinTech in Australia.
In Proceeding of Australasian Conference on Information Systems (pp. 1-11).
Tornjanski, V., Marinković, S., Săvoiu, G. and Čudanov, M., 2015. A Need for Research Focus
Shift: Banking Industry in the Age of Digital Disruption. Econophysics, Sociophysics & Other
Multidisciplinary Sciences Journal (ESMSJ), 5(3), pp.11-15.
Walker, A., 2014. Banking without banks: Exploring the disruptive effects of converging
technologies that will shape the future of banking. Journal of Securities Operations &
Custody, 7(1), pp.69-80.