Banking has primarily been a traditional industry. However, it has never been shy of innovation. From cheques to credit and debit cards, banking has adopted several innovations that have completely transformed the customer experience.
Technology has completely transformed how we interact with each other, make a purchase, avail services, and run a business. Over the last few decades, technology has redesigned and reinvented our lives. So, technology must impact the future of banking.
With the latest technologies like chatbots and automation, person-hour has been greatly reduced, affecting the customer-bank relationship. These technologies have completely transformed how customers interact with their wealth, their expectations from banks, and how these institutions operate. All these will collectively impact the future of banking.
8 Technological Innovations that will transform the future of banking
Here are the top technological innovations that will completely transform banking in the coming few years.
Gone are the days when customers would wait patiently in long queues. Instead, they are looking for a branchless banking solution. The Covid-19 pandemic had forced us to stay indoors. Mobile banking software with self-servicing capabilities became the only possible option in such a situation. Not just accounts balance checking or money transfers, customers these days are looking to get more out of their mobile banking software.
Customers want to register and open a bank account remotely. They also want to buy the insurance and apply for loans, all from the comfort of their homes. These are all part of a branchless banking solution. These mobile banking solutions are appealing as they are quick, transparent, safe to use, and assure complete control to the customer.
Customers no longer have the patience to wait for 1-3 business days to transfer money. They need instant payment solutions. Instant payments allow money to be transferred from account to account within seconds. Both the payer and the payee is immediately notified of the transaction through an SMS or push notifications. Keeping in mind these increasing demands, banks are adopting instant payment methods.
Customers can pay for transport tickets, transfer money to peers, split the bill at a restaurant, and pay their utility bills through instant payments.
With globalisation has come the need to be constantly connected with the world. Customers these days prefer banks that can participate in digital ecosystems. The bank’s native mobile banking software should be able to integrate various 3rd party services.
APIs or Application Programming Interfaces help to do this. They essentially link two software systems and allow them to communicate. This technology allows banks to receive money transfer requests from e-wallets, card systems, and other financial service providers.
Gone are the days when banks would have significant, dusty rakes filled with endless stacks of files that stored customer data. The digital age has done away with this hassle and has provided the convenience of cloud computing.
Cloud computing allows banks to store customer data securely. Many service providers provide cloud computing services. Cloud computing increases bank efficiency and cuts down on hardware and software costs.
Despite being so popular and convenient, some people are still wary of online banking solutions. The reason is security. When it comes to wealth and finance, people want to ensure absolute security, and rightly so.
Banks have to ensure that their customers are safe on their mobile banking platform. Biometric technology is the way forward. This technology uses physical attributes to verify their identity, and Biometric verification is much more difficult to hack and almost impossible to forget.
There was a time when limited working hours, long response time, and poor call centre response would hinder customer service. But not anymore. The usage of chatbots has transformed this aspect of banking.
Chatbots can interact with customers 24/7 and provide services like checking the account balance and tracking expenses. Chatbots can be integrated into the bank’s native mobile app or website.
Banking is about moving assets from one account to another. So ultimately, the search is to find the quickest and safest way to transfer funds.
Blockchains are not owned by a single entity and can be accessed by all. With blockchain, transactions are cheaper and faster, and this technology is most helpful for cross-border payments.
In this age of instant domestic payments, cross-border payments take a much longer time and are usually ten times more expensive. Blockchain transforms this payment system. It converts the money into cryptocurrency and transfers it to a different country. Then that country’s bank converts it into local currency and receives the amount.
Most of us know how artificial intelligence has taken over the world and has completely revolutionised our lives. AI assistants are the trendiest and most well-known use of artificial intelligence.
But the banking sector can also benefit from using AI in their services. Every day, a massive load of data is computed by banks, and millions of transactions, money transfers and registrations are done.
Manually computing and sorting such extensive data can become complex and cumbersome. This is where banks can integrate AI technology. Artificial intelligence can vastly speed up this computing process and sort customer data, which further increases the bank’s efficiency.
The bottom line
It is ultimately customer satisfaction that matters. With technological advancements, our lives have completely transformed. So, to survive in this digitalised new environment and keep in mind customer demands, banks too should upgrade their services.
Banks have constantly been upgrading their services. When credit and debit cards arrived, along with ATMs, it was considered the next big thing. However, the world has moved forward.
Banks are now integrating self-service capabilities that have transformed the user experience. A customer now can open an account, deposit money and apply for a loan, all from the comfort of their homes. They no longer need to waste time standing in a long line.
Neither do they need to be present physically to make a transaction or transfer funds. Banks now use digital payments solutions, and everything, from utility bills to hotel booking to sharing restaurant bills can be done digitally.
Banks have also started taking initiatives to keep customers safe online. Biometric verification has become the need of the day. This technology is very hard to hack and ensures complete customer safety.
All these points towards a common goal: to create a mobile banking app. When banks create a mobile banking app, they can integrate all the above-mentioned features into their app. This is the way forward.