How IT Influencing Banking Sector
The digital age is changing how people interact and do business on a day-to-day basis, and technological advancements are continuing to influence the future of banking around the world. An increasing demand for a digital banking experience is transforming how the entire banking industry operates.
From retail and mobile banking, to neo-bank startups, technology has its hand in seemingly every aspect of the banking industry; and, the influence of technology will continue to launch banking into a digitized future.
Future of Retail Banking:
Retail banking refers to the specific services banks can offer to consumers such as savings and checking accounts, credit and debit cards, and loans. Consumers’ growing desire to access financial services from digital channels has led to a surge in new banking technologies that are reconceptualizing the entire retail banking market.
Technology geared toward improving retail banks’ operational efficiency is positively impacting the market. According to Business Insider Intelligence, 39% of retail banking executives say that reducing costs is where technology has the greatest impact, compared to only 24% who say it’s improving customer experience.
Retail banks are also launching platforms in the Banking-as-a-Service (BaaS) space to remain competitive.
Future of Mobile Banking:
Mobile banking has become the go-to method for users to make deposits, account transfers, and monitor their spending and earnings. According to Business Insider Intelligence’s Mobile Banking Competitive Edge Study, a massive 89% of survey respondents said they use mobile banking.
A top concern, consumers have when choosing mobile banks is security. The fear of data breach increases the demand for services that keep users’ data secure allowing consumers to place holds on credit or debit cards, schedule travel alerts, and file and review card transaction disputes are some successful security banking features.
Mobile wallets are another up-and-coming feature in mobile banking. Mobile wallets are applications that emphasize convenience; they allow users to make purchases online or in-store with their smartphones without ever having to take out their physical credit card.
Successful mobile banking options also include money management features that help users cut spending and grow savings. The future of mobile banking points toward offering savings tools and financial wellness scores, which is seen as particularly important among millennials.
Future of Online Banking:
The popularity of mobile banking has surpassed that of online banking, and the overall number of online customers has slowed worldwide. According to Business Insider Intelligence, mobile banking is growing at five times the rate of online banking, and half of all online customers are also mobile banking users.
Despite this growing popularity, some banks still fall short on the demand for mobile tasks, like bill pay and reward redemption, causing them to push users to online banking. However, even this push won’t be enough to popularize online banking continue gravitating toward the mobile market.
Banking Technology Trends
The future of banking technology is driven by consumers, who see technology as something that enhances their lives. A common trend in banking technology is using an application programming interface (API) to make proprietary data available to anyone who has the consumer’s permission to access it.
APIs could be used to enable a bank’s mobile app to pull down customer account information.
Additionally, Business Insider Intelligence reported that 48% of banking executives believe new technologies like blockchain and artificial intelligence (AI) will have the greatest impact on banking through 2020. According to Business Insider Intelligence, banks are exploring blockchain technology in hopes of streamlining processes and cutting costs.
Consumers can already see AI being used by most banks through chatbots in the front office. Banks are using AI to smooth customer identification and authentication, while also mimicking live employees through chatbots and voice assistants.
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