Digital Banking is growing aggressively with these trends
It has been quite a long time since banks ditched manual banking methods and adopted the Core Banking System (CBS). The introduction of CBS unveiled the immense potential in the banking sector and how it can be harnessed with digital ways. This in turn gave rise to Digital Banking which has now become an integral part of our lives. At present, people familiar with the digital capabilities of their banks seldom go to their respective bank branch to avail a service. We have internet, we have smartphones, and banking has completely taken a digital shape upon reaching 2018, and the trends in digital banking are on rise, especially since analytics has become an integral part of processes in financial institutions.
The year is 2018, we have come almost halfway, and some of the trends that seem to affect digital banking and, indeed, look promising are:
The banking systems around the world were established quite a while back, when we didn’t even have inkpads; forget biometrics. And in all these years, the hardcopy of data and manual paperwork that has accumulated was digitized since the use of computers in banking and financial institutions. And that is where the banks stayed until the possibility of cloud migration came out as a solution to step up the entire banking sector.
The need for cloud computing has been there since the digital infrastructure became prominent for the entire industry. And with time, the feasibility of cloud migration in banking industry has been increasing, especially when there are technologies like blockchain that provide a valid base for pooling distributed computational resources or even streaming computational power remotely. According to experts, cloud computing is bound to grow in 2020, exceeding the capabilities of all private data centres combined.
The world has been quite accepting towards the digital banking services simply because it was convenient. Although the digital technologies have been around us for a while now, digital ways of executing frauds is something that we have not been anticipating. As a result, statistics reflect that merchants have been losing almost 8% of annual revenue because of online frauds.
But then, measures to reduce online banking frauds are already being taken, and AI integration is one of the most promising ones among them. A part of the cyber-attacks like Phishing, Malware installation, etc., happen due to carelessness on customer’s part, and mostly because these cyber-attacks have gone complex enough to be recognized by an average person.
This is where AI plays a crucial by analysing the patterns in malicious emails or SMS, and identity the source of it before they are spammed. Besides, mobile app and OS developers have also become more aware about the security threats that target mobile phones to execute bank frauds, and focus more on maintaining the integrity of smartphones by launching security updates. All these efforts are already on the way and have produced some tangible results in 2018 so far.
Personalization is by far the most customer-centric advantage of predictive analytics, which is a branch of AI. Banks are leveraging predictive analytics to deliver much more than deposit and withdrawal options. Most of the loan processing can now be performed via predictive analytics to project the capability of customers to repay the loan.
Apart from that, applying for loans has also become easier than ever, as banks have launched their own mobile app to collect the user’s personal data with their permission, to analyse information such as age, address, number of dependants etc., which are crucial in determining whether the person is eligible for being forwarded a loan. Also, the search data from different search engine is forwarded to people to let banks know about the kind of financial services they are browsing the web for. Banks have always had a competition with fintech companies, and this personalization allows banks to something they can compete the fintech with, by suggesting optimum loan schemes and card services. How does personalization further act as an advantage for banks in 2018, would be an interesting thing to watch.
Most of the banking institutions out there, upon having to deal with more customers than expected fail terribly. What is surprising is that these banks cannot be blamed, and neither can the customers be. So what exactly plays a culprit here? It is that a branch can only fit a fixed number of employees, beyond which everything is basically a ruckus.
Application of robotics in mainstream banking may sound not a very rational thing, given the common belief that not everyone can communicate with a robot. But there are many banking enterprises that have already launched their in-house robots to help people resolve their generic queries. But customer desk is not the only place where banks are using robotics. Some of the banking entities have also made advanced use of robotics. For instance, China Construction Bank, in May 2018, launched world’s first human-free branch, managed by the only robot there, called Little Dragon. The City Union Bank in India is not too far in the race, as in 2017, it launched robot CUB Lakshmi for some of the basic and essential banking tasks, helping the branch to reduce the length of queues.
And to say the least, robotics in banking is an experimentation that flourished by a clear margin, as more and more banks are adopting robotics in banking operations as we approach mid-2018.
Digital banking is evolving with time under the influence of advancements in different fields of digital technology. Something noteworthy about the trends in 2018 is that digital banking has continued the empowerment of customers, but in a more aggressive way with the use of smart technologies. In 2018, we have seen many international banking institutions adopt mobile apps and smart technologies that hand over the complete control of their of bank accounts to the customers via mobile apps infused with AI to collect relevant data to ease up the operation even more for the users. With this, customer eccentricity is on the rise, leading to customer satisfaction, which has always been something of prime importance for the banks and financial institutions.