New technology has started showing its impact significantly on the financial sector and the traditional banking is set to change rapidly for the next five years. Many safety features like advanced cryptography and biometrics have emerged that aims to reduce and protect against bank scams. Remote applications make your work easy like never before so that you can complete your work without visiting a branch. But, if you visit the branch, you are much more likely to get a customer-friendly experience.
Here are the innovative technology trends in the banking sector for future growth and how these trends has changed the way of data sharing and how your money is handled.
Blockchain technology helps to transform banking and financial services fundamentally. Many changes occurs in the financial management where it decentralizes from a central authority to a widespread network of computers. Here, these financial transactions are encrypted in the form of packets and blocks where those are added to the computer code chain, and they are encrypting these transactions to ensure for enhanced cybersecurity. Blockchain technology in banking can change many banking sectors and be the platform for other banking technology trends like bitcoin.
2. Upgraded version of ATMs:
ATMs were introduced in the year 1967 and have changed the bank tech system drastically. Coming to the next transformation, banks are ensuring ATMs for contactless payments. Like Apple pay and Google wallet, you can have contactless ATM transactions by using smartphones.
In fact, some advanced ATM technologies have already been implemented. For instance, you can see a biometric authentication in India and iris recognition technology is at Qatar National Bank ATMs. These latest and innovative technologies help reduce and eradicate the ATM hacks and protect them with high security. It may take some more time to have ATM upgrades in the financial system on a global level due to the strict restrictions that guide the financial sector.
3. Quantum computing technology:
Quantum computing means how we use quantum mechanics to work on complex data operations. We all know that computer use bits in the form of ‘0’ and ‘1’. While coming to the quantum computing (i.e. quantum bits), it uses ‘0’, ‘1’, and both. Hence it will have high exponential computing power over traditional computing at the time of using the right algorithm. So, there will be a considerable rise in computing power, but many commercial implementations are still not taking place and are decades away.
4. Artificial intelligence technology:
We can see impressive growth in the amount of structured and unstructured data available at the banks. Also, there is a high demand for Artificial Intelligence. We can see growth increment by combining cloud computing and machine learning technologies, and this advanced technology can be used for banking and financial services.
Due to business needs and how AI is working in today’s world have grown hand-in-hand, banks seek to implement Artificial Intelligence to beat the competition and be ahead of the competitors. Banks can access large amounts of data that they have with Artificial Intelligence to make better decisions on various verticals like back-office operations, customer experience, marketing, product delivery risk management, and compliance.
According to the new report of “the New Physics of Financial Services” AI is being implemented in banking and financial services in a very guarded manner. You can use the technology in banking across deposits, payments, investment management, lending, capital markets, and market infrastructure. AI is set to transform the bankin sector by shifting the focus from the scale of assets to scale of data. Banks aim to deliver an incredible experience to the customers besides building mass products for large markets.
Banks can now focus more on their customers to retain them by providing high retention benefits rather than retaining customers from charging them with high costs. Mainly, there is no need for banks to rely on human ingenuity in order to improve their services. Here, the performance is calculated between technology and talent.
5. A rise in usage of Non-Banks:
Banks believe that the new technology help them deliver a fast, more transparent experience to their customers. Many resources in the banks are dedicated to working on security, compliance, and other industry-specific requirements. It allows non-banks and financial service providers who are not authorized with the banking industry to flourish according to the market intelligence firm reports predicted in the year 2016. Banks can devote the more significant percentage of assets to innovative financial technology. They can emerge this innovative technology in banking more quickly compared to traditional banks and can attract tech-savvy customers.
6. A similar experience like Apple store:
Perhaps in the coming days, the in-bank experience would be something similar to what one experiences at an apple shop. Banks are increasingly encouraging people to download more user-friendly banking apps or have ATMs to make their banking transactions. Today, in-bank customers are limited to people who are looking for help involving a personal interaction. Banks aim to increase their sales in future with this latest transformation which create a way for users to engage more directly with banks and their products. It’s similar to the apple store, where customers interact directly with tech people for their transactions and have a person-to-person interaction to ask questions, get answers, or address their needs to the individual customer.
7. Augmented reality:
Augmented, virtual, and mixed reality, all these technologies attract your customer’s experience all over the world. Now, do you think why can’t these technologies won’t be helpful for the banking industry? But, implementation of these technologies into the banking sector is at the imagination stage only even though these technologies are at an early stage of development. The final aim of implementing these technologies is to make customers work easy even from home. Technology experts are looking forward to hybrid branches, for those who believe that bank branches we know today are passé.
Already Commonwealth Bank of Australia has implemented augmented technologies for their banking system that assisted with real estate division. It includes about 95% of Australia’s residential property data that can be utilized by the user to get information on a wide demography. They can access their customer data they need like current listings, recent sales, and price trends so that customer can make better decisions.
8. Mobile and Digital banking:
Mobile and digital transformation has taken over the banking sector very recently, but the growth has been highly impressive. Almost all Banks have introduced digital banking services and are investing huge amounts on interfaces where customers can use mobile, web or digital platforms to avail any banking services. It has been found that about 86% of banks find these types of services benefitting them to a great extent and upping their game in the market and improving their image.
Even though banks are investing massive amounts for the technologies, delivering financial innovation quickly involves strategic partnerships. The companies who already have new-fintech or social media platforms can make excellent partners where traditional banks are looking to enhance the customer experience. For instance, a card-linked marketing company analytics, which was into data analytics, has a partnership with several financial institutions like a bank of America to make sure to secure data to emerge with marketing based on the card usage of consumers.
When coming to wearables like smartwatches, are not helpful for the retail banking experience in future. We can take an example here, banks who use Bluetooth beacons to make personal greetings for customers smartwatches when they enter into the bank location.
Coming to the other type of wearable, i.e., smart glasses for the bank tellers will provide customer banking information to employees because they handle other customer tasks. Consumer behaviour and smart device trends are taking advantage of these banking technologies for their convenience. Numerous remote technologies allow you to communicate with your bank easily from the place you are. Even you may come up with new customer experience very soon then you think.
11. Smart machines technology:
Technologies like Amazon’s Alexa and Google Home are already implemented in some areas and are into usage. Can anyone guess the impact of these technologies on the banking industry? There is an example which already into reality, Bank of America has developed Erica, a virtual assistant which can be used for banking operations. These smart machine technologies are used as a digital porter to make interactions with the customers and with the banks too.
Banks can ensure long-lasting relationships with their customers, but you need to invest in digital engagement for that. Your customers won’t visit banks if they become habituated to this technology.
12. Automatic robotic process:
There is an unstructured data in a bulk that needs to be processed with the digital economy’s rise. The data is not just banking transactions but other behavioural data where banks can improve and innovate the customer experience.
Thus, bankers have realized to have technologies which can reduce human actions and judgment at high speed, scale, and quality. The final output will be integrated with various technologies that create a place for cognitive and robotic process automation in the banking industry.
The combination of the technologies will be machine learning, natural language processing, chatbots, robotic process automation, and intelligent analytics which are helpful for banking industries where bots can learn and improve.
It’s found in a recent survey that 88% of financial service professionals think like all these technologies have high strategic priority. The current progress of robotic automation is still weak to process the cognitive and analytical aspects. In the next years, the capability of current cognitive can emerge with the robotic process automation so that you can drive better results and success. It has been implemented already at sales solutions where marketing promotion suggestions are created automatically. It is the most effective for all individual customers.
Winding it up:
All these technologies are implementing into the banking sector to ensure customer experience and not for cost savings. Yeah, savings are essential, but you can get savings automatically if you retain customers in the future. Banks seek helps to FinTech companies rather than their competitors in the next coming years. Just remember that banks are the biggest customers for FinTech companies which help to bring new customers.
Hence, banks are aiming to develop these technologies in order to result in better customer satisfaction. Bankers should think to work with new business models to build more customer relationships and pull FinTech resources throughout the world to generate the most value for the end-user.