6 Digital Trends That Will Define Banking of the Future
The banking industry gets more and more focused strategically and advanced technically. It’s no surprise that the main emphasis is being now put on business processes digitizing and structural reconsideration. The competition is great and everyone realizes that the future of banking is digital.
Modern banks have already started to adopt the practices, which were earlier introduced by fin-tech startups, more extensively use data and analytics and progressively go mobile.
The Riksbank investigation has revealed that the proportion of cash transactions has recently hit a record low of 13 percent in some states and eMarketer predicts that by 2022, almost 80% of the millennials in America will be digital banking users.
That’s why we decided to analyze the mobile banking trends which are likely to change our life in the nearest years.
Six popular trends that will define banking the next 3 years
At present, the voice search can be already called a norm. It allows to use voice assistants on the go and find the staff we need, even on the move. Some banks have already taken the advantage and introduced the voice technology for payment authorization as a part of the two-step authentication. Besides, it’s possible to access private banking through voice commands to Siri and Alexa. Certain institutions even now let their clients make monetary transfers, inquiries about operations and status of complaint, or report lost cards with just a voice.
Voice over Internet Protocol progressively makes modern services more accessible and secure. However, it’s not anymore enough to simply optimize products for sound-driven search. The contemporary banks get more and more concerned with Voice User Interface which can bring a vast improvement to customer engagement, insights and consequently conversions.
The contemporary banking system is based on a branch network, but the cost of its maintenance is quite high. That’s why one of the following trends worth our attention is moving the transactions to the digital domain. Digital-only banking entities can expect higher ROI, being at the same time able to collect deposits, offer loans, realize investing and offer special services. Besides, such banks will enjoy the decreased costs of payment funding.
The main concerns here should be groundbreaking customer experiences and enhanced value for the clients. It can be achieved through big data combined with advanced analytics for a more personalized customer approach. However, it’s vital to determine the right balance between physical and digital, because innovative delivery models should still meet the clients’ expectations. Their own costs in their turn redefine the whole structure of the present-day banking industry.
Machine learning and smart bots
According to Business Insider, more than 60% of consumers admit they would switch the bank if the service is bad. Personalization is the key to keep the client at present. More than that, it should be a real-time experience. Both can nowadays be achieved through the technology of machine learning, predictive analytics, and smart bot solutions. Combined with intellectual communication these technologies are able to assist the customers at all steps of any transaction performed. Chatbots are believed to be able to make estimations better and to take smarter decisions than humans.
Artificial intelligence: banking on the future
AI seems to be the most exciting innovation in banking in the coming days. Some institutions have already started their way to predictive banking and verbal advice, but they have to struggle with the table stakes of digital assistance for it not to sound scolding.
At present all the external and internal data of the clients can already be consolidated, analyzed and predictive client profiles formed in real-time, thus recommendations can be provided. However, the boosted customer experience along with improved security and efficiency is expected in the nearest future in the financial sphere due to more wide utilizing of robo-advisors and bots driven by AI.
Besides, these capabilities can be integrated with the open banking expanded services and connected devices to proactively change the customers’ behavior, with figures and insights received. This may facilitate the elimination of old-fashioned financial products, like credits, checks, payments, since the innovative solutions will be universal and able to offer integrated services.
Just a year ago bankers debated about moving to the cloud, now they discuss how to effectively operate there. It’s vital to combine the information in the cloud with effective analytical tools. Such a strategy may help to avoid integration problems with systems and products from various vendors. Besides, cloud technology allows to set the common standard through all distribution channels and in such a way to improve UX.
Cloud computing facilitates the more rapid operation of self-service channels due to the immediate access to the necessary data, requires lower costs and allows SRM services scalability.
Most likely banking institutions will receive common opportunities in cloud computing and technology integration, however, he would win, who will manage to craft something of real value.
Mobile services and open banking
The growing number of governing bodies require that banks enable clients to share their data with 3rd parties, thus making open banking one of the most popular mobile banking trends. The main aim is to escalate competition and launch new financial services. Improved customer value is nowadays a winning approach.
Open banking APIs chase mobile banking and facilitate the expansion of the ecosystem through innovation and collaboration. It’s now easy to build a net, which is easy to access from a single point of control. Having access to the financial operations and data through API a user has more freedom to control the interaction with service providers. Having several accounts in different banks, a consumer receives an opportunity to access and operate them all through a centralized hub with a single, all-inclusive dashboard.
Besides, it makes the customer a central figure of the system and the strategy. However, security and regulatory issues make this trend slow to be implemented.
Though the banking system is known to be resistant to change, at present, the traditional entities face the necessity to keep up with the growing demands for personalization, self-service, and instant assistance on part of consumers. This results in a greater demand for the development of banking apps and solutions based on wearables.
Axisbits is eager to provide assistance to banking entities and craft unconventional IT products for the exclusive UX, along with unconditional convenience.