4 tech trends will revolutionize in Banking
Modern day technology has changed the way an average human performs their daily tasks. From smartphones to the Internet of Things (IoT), the tech world has introduced new innovations that had a groundbreaking effect on not just one industry.
From retail to education, every sector was hit by the technology and rules of engagement with users were drastically changed for every business. Each interaction in customer experience was strategically curated to reduce friction both in customer onboarding process and conventional service delivery practices.
Even one of the oldest industry, that is even considered harder to adapt to new tech standards, was able to get a ride on the tech bandwagon banking. Fintech and new entrants surely forced their hand as the fear of losing to competition was not an option for large banks.
The stats and user trends were already painting a dire picture for banks as customers tended to shift to online means to perform their day to day activities.
As high as 91% of banking consumers preferred mobile app-based banking services as compared to visiting a physical branch. Not to mention the cost-effectiveness of running an online banking system as compared to a brick and mortar branch network.
So while mobile payment and online banking services are gaining attraction, here are the 4 tech trends that will give a new boost to digital banking services
2019 is the year when a new wave of millennial users will signup for banking services. It is an open secret that they will not be the most enthusiastic of the users when it comes to conventional banking, but if the past few years are any evidence, online banking and mobile-based payment apps are favored by this millennial crowds for their multiple online purchases ranging from Netflix subscriptions to shopping sprees on their favorite e-commerce websites.
According to a survey conducted by a reputable global banking leader, the year 2018 saw a 61% rise in their millennial customers as compared to previous years as compared to 46% rise in overall banking consumers signing up for their mobile payment solution.
Increased Use of RegTech
Technology is not only going to help in bringing a higher number of customers for banks in 2019 or will not only support in reducing friction during the transaction process but it will also help banks to adjust themselves according to the regulatory landscape.
Especially for the banks that have to handle a variety of regulatory guidelines issues by different category of official authorities such as law enforcement agencies, financial risk regulators and money market regulators, in addition to compliance instructions issued by official governments and ministries of finance.
Regulatory Technology, more conveniently called RegTech, will gain more and more takers in 2019 with banks opting for several regulator-approved technologies in order to provide a contextual linkup between data and innovation.
There are several dynamic areas where these RegTech Solutions can come in handy: AML software for banks to prevent customers using their services to launder money, KYC solutions to collect verified customer information and AI-based banking solutions to curb identity theft and account takeover attempts.
Online account opening service is another useful RegTech that will not only smoothen the customer registration process but bring in large clientele for banks in 2019.
Automated Service Delivery
Automated systems are all the rage for the past few years and it is only logical if the banks also start using automated service delivery platforms in order to fast-track banking operations and perform banking services much more easily for users, even when they are not present in a physical bank branch.
An automated service delivery platform has never been more important for banks. Whether it is online bank transfers or international funds transfers, the less friction will be considered innovating on behalf of the customers.
Importance of a new service delivery model is the need of the hour for the banking sector and tech provides ample opportunities.
Connected devices and open banking will be leveraged by the banks in 2019 to make the user experience more smooth over the course of the year.
Cloud-based services will be utilized by many banks with an eye for universal cash management in order to support both online and physical transactions at POS, ATMs, and bank cash counters at the same time.
Alternative Payment Systems
The most impactful trend for the banking industry will be the use of alternative payment systems by users. In an industry that is already haunted by fierce competition, outside players will create more competition for banks. Market shares will be under pressure, at least when it comes to transaction volumes.
The recent example of the Starbucks payment app shows that the banking system might just become a nuisance in the overall user experience when purchasing items even in the physical world, not to forget internet-based transactions on e-commerce websites.
We already have the example of AliPay and WeChat that have billion-plus users around the globe, performing mobile payments right from their smartphones, amounting 2/3rd of global mobile payments.
The banking industry will have to perform innovation on behalf of its customers so that they remain relevant in a world dominated by online payments and mobile apps with in-app payment features.
In the year 2019, payment innovation will be driven majorly by PoS, ATMs, IoT, mobile wallets and if they play their cards right, cryptocurrencies as well. Banks have to decide how they will systematically replace their core legacy operating systems with agile systems for mobile payments and online banking. This is the only way to help banks achieve sustainable growth against fintech products and mobile payment platforms. \
Integration with other technologies and open banking channels will help usher a new wave of digitization that will go beyond checking account balance or performing a transaction via credit card numbers.
A great deal of emphasis in 2019 for all service providers will be on providing top of the line user experience and what better way to enhance the user experience for a banking customer by offering ease of payment to their users, regardless of the platform.
Amelia Matthers is a tech enthusiast that has hands on experience in marketing of various KYC verification and online identity services. With focus on educating businesses about the threats involved with online frauds and identity theft, Amelia has worked extensively to propagate large scale adaption of innovative KYC and AML compliance solutions. Always a keen learner and seeker of an online marketplace free of online frauds, Amelia is go-to-guy for identity verification and KYC verification.