For the longest time, banks were reluctant to change their old systems; but not anymore. Fintech startups have brought stiff competition to the marketplace, creating a sudden need for digitalization and innovation. And COVID-19 forced banks to adopt digital transformation fast.
The banking industry is using technology to overcome many challenges such as legacy processes, intense competition, and the changing financial needs of the modern customer. Technology is changing the way banks deliver services and the speed of delivering services. In the future, customers will access instant payments, virtual currencies, anytime-anywhere services, and individualized products. Here are 4 technologies ushering the banking industry to such a future.
1. Instant Payments
Modern consumers don’t have the patience to wait for the traditional 1-3 business days for financial transactions to mature. They want to access their money as fast as other digital products, and banks have no choice but to comply.
Banks are now providing instant payment solutions that deliver convenient and effortless payments in real time. All this happens within seconds electronically. Customers can instantly pay for online shopping, restaurant bills, buy train tickets, and receive instant transaction notifications via SMS or email.
2. Biometric Technology
Very soon, PINs and passwords will be a thing of the past because banks are adopting biometric technology. Biometrics are physical human features that are used to digitally identify a person before granting access to data, systems, or devices.
This tech allows banks to save customers’ personal information like fingerprints, voice, or the iris structure to help close the security gap created by security codes. Customer identification is faster, more secure, and convenient. Soon, you’ll only need to scan your finger, have your eye scanned, or use your voice at an ATM to authenticate a transaction.
3. Process Automation Technologies: RPA, AI, Machine Learning
Process automation technologies will soon eliminate the challenges of traditional banking systems: slow workflows, clucky procedures, and lack of inter-departmental collaboration. Repetitive procedures like checking for compliance, customer onboarding, account opening, loan processing, and customer support will be automated through robotic processing automation (RPA), artificial intelligence (AI), and machine learning.
Banks will greatly benefit from improved productivity and cost savings while customers will get faster and highly accurate services. And automation is already underway. Today, chatbots have taken over most customer support tasks and robots work as virtual assistants online. Automation is availing core banking services to customers 24 hours a day, 7 days a week. You can open an account, apply for a credit card, and even get title loans online any time of the day.
4. Big Data and Advanced Analytics
The banking industry is arguably the most data-intensive globally. It provides services to other sectors and virtually everyone on the planet. Through big data analytics, banks can use their clients’ information to generate personalized offers and experiences.
Banks can use the data to understand what every customer wants and serve them better. They can gather more customer data from online and mobile payments, social media, withdrawals at ATMs, IoT devices, biometric authentications, and other platforms. Banks can also monetize this data by sharing it with related industries.
Technological Transformations Are Key to the Banking Industry’s Future
Technological transformations are becoming the core competency in the banking industry. The focus has now moved from selling products to creating great customer experiences, and Fintechs are giving traditional banks a run for their money. Whether banks join forces with Fintechs or not, the ability to transform quickly will determine who survives the technological revolution.