The financial sector continues to experience massive disruptions and most retail banks are rushing to become innovative and use technology to meet the ever-increasing customer demands. The pressure to maintain and raise the revenues remains high from investors in the wake of digital financial providers who have enjoyed a positive reception on the market.
As a result, banks embark on investing in trending technologies in order to keep up with the ongoing transition. Besides keeping the clients happy, banks have to abide by the strict regulations that come with the technology innovations. Here are some of the most sought-after technological trends in 2018.
Digital transformation
While the players involved in the banking sector understand the necessary technologies, implementation is moving at a slow pace. Basically, this is because the available technologies are in infant adoption phase.
Early adopters are faced with a challenge to educate their customers and most importantly, the employees. This is important when it comes to ensuring the client base is updated on the technology advancements employed. Today, most customers have high expectations that their financial provider will offer real-time support when needed.
Mobile technology
Today, most banks are offering a mobile application that is designed to handle transactions and effectively replace paper balances. Currently, there are slightly over 111 million people using mobile banking applications. This number is set to skyrocket as people gain more trust on the mobile platforms due to the improved security features.
It’s interesting to note that at least 34% of the UK population uses mobile technology for daily banking tasks. Since owning a smartphone has become easy for everyone, and most people want to have financial solutions at any time and place, the number of individuals relying on mobile banking is likely to shoot to 60% before 2020.
As a result, banks are striving to offer better mobile banking solutions to their existing clients as well as prepare for the market that is yet to open up.
At the moment, there are innovative financial providers that are offering short-term loans across multiple devices. The platforms ensure that you can submit a loan application online from anywhere. The entire process happens online until the money is deposited into your account.
Robotic process automation and AI efficiency
Over the last three years, banks have demonstrated an increased effort to procure RPA and AI technology. To both beginners and banks that have already implemented the technology, the main focus will be efficiency in the processes.
Basically, RPA eliminates the headaches resulting from repetitive tasks. As banks seek to ride on the wave of digital transformation, implementing appropriate AI and RPA technologies is critical to enhancing efficiency and maintaining low overheads.
Most banking executives are leaning towards taking advantage of machine learning in the automation of customer service. The competitive advantage offered by this technology is higher than underlying cost and could be the link to the anticipated success in this industry.
The distributed ledger technology
Generally, each bank is responsible for the good maintenance of a database. As such, any transaction between banks calls for suitable intermediaries and reconciliation. But clients are constantly demanding for a financial service that is not only faster but also secure.
Due to the time take to process payments, there is a widespread outcry among customers advocating for real-time cross-border and domestic transactions. Blockchain technology is set to revolutionize this industry as it enhances convenience and efficiency of the transactions. The need for reconciliation and intermediaries for the bank-to-bank transaction will be eliminated thus facilitating real-time transactions.
Although the innovation is still in its infant stages, most banks are seeking to implement private blockchain solutions in order to serve their customers better. However, the trend is moving towards trusted networks where more than one financial provider can collaborate and serve their customers efficiently.
Implementing digital ID technologies
As cybercrime becomes more prevalent, banks are doing everything within their power to boost security. Biometric solutions will be on the forefront as banks embark on using fingerprints, voice, iris and face recognition to minimize the occurrence of fraudulent transactions.
This will also eliminate the need for multiple verification procedures across multiple banking platforms. Huge banking organizations like Barclays have laid the necessary infrastructure to commence the testing phase of cross-border digital ID.
Final words
While this shift is necessary for a better competitive advantage, banks need a pool of personnel that is conversant with these technologies. As such, retraining and hunting for experts with the necessary skills will play a huge part in the success of the transformation.
While this may take time to become mainstream, it will eliminate the labor-intensive manual tasks. But until all the necessary systems are put in place, banking executives have to encourage their staff to support the transformation.
