Top 5 emerging technologies that banks need to invest in for their digital transformation initiatives
The banking sector is known for being one of the biggest investors in technology. But a great deal of those investments have gone mostly into setting up a core banking system for operations. The two most fruitful outcomes of core banking have been online banking and mobile banking. But banks often fail to think beyond offering these two key innovations. This is where disruptive technology players (fintech) were able to woo consumers by making finance as easy as instant messaging. They have mastered the art of offering direct consumer financial services that utilize the underlying core banking infrastructure of banks. From Apple and Samsung to Google and Whatsapp, today almost every consumer-facing tech company has created its own financial payment window for end users.
While tech players have already dominated the digital payment space, there are tons of other avenues where banks can offer innovative and disruptive financial services by investing in emerging technologies. These technologies have the capability to accelerate their digital transformation goals and enable banks to improve their customer love, as well as bring down operational costs. Here’s our roundup of the top five emerging technologies that banks can utilize to offer a better banking experience to their customers:
The news about cryptocurrencies being banned and their value being extremely volatile have cast doubts on their future; but not on their underlying technology – blockchain. The centralized ledger mode of operation and associated transparency of blockchain make it the perfect platform for banks to offer experimental innovative services, without worrying about compromising sensitive financial data of customers. Limited security risks involved with blockchain make it ideal for setting up new global financial models, wherein more key banking services can be converted into internet powered self-service models.
2. Robotic Process Automation
Reports have shown that more than 40% of American customers never really visit a bank branch physically today. With the rise of online and mobile banking facilities, more transactions run on a completely digital mode. With digital processes, it is easier for banks to implement RPA systems within their branches for automated processing of repetitive tasks such as batch approvals of digital transaction queues, data entry of e-KYC information, issuing of transactional records and much more. Thus, human resources can be re-allocated for more important tasks within branches. It also reduces scope of errors and data redundancy, thanks to automated processes and strict enforcement of quality assurance policies.
3. Internet of Things
Banks can be a major beneficiary of IoT because it allows them to collect more significant information about a customer. For example, integration with wearables can enable banks to identify customer locations and direct them to the nearest branch or ATM or partner retailer for preferential services. With interconnected sensors, newer virtual banking channels can be created anywhere for customers to avail services without visiting a physical bank branch to do the same. The possibilities are limitless.
When there is so much to calculate, the financial sector is one of the hotspots for analytics-powered innovation. The same principles of predictive analytics deployed in retail could be used in finance as well. Imagine if you could determine when a person has a financial emergency and would avail a loan service. Based on this insight, you reach out to him first before competing banks and the deal is closed with attractive rates tailor made for his needs. This level of personalization in banking can be brought about by investing in analytics infrastructure. There isn’t a need to build dedicated teams for analytics, as today, there are powerful analytics services available on the cloud, which you can simply subscribe to as per your need.
5. Artificial Intelligence
Intelligent advisory for personal finance as well as for corporate finance is one area that can be massively disrupted by banks utilizing AI. With powerful human sentiment analysis and prediction capabilities, AI systems can understand spending and credit patterns of customers. Banks can create personalized digital assistants for customers to advise them on a healthy financial schedule. Hiring human advisers would involve tremendous costs and the results would be delayed as most of the insights would be based on intuition. For AI powered virtual financial advisers, the advisory offered would be solid and based on data and insights, thereby guaranteeing accuracy beyond human imagination. Not only these, AI powered virtual assistants can handle most customer on boarding and KYC tasks with lesser error rates as compared to humans.
These are our picks for the top five emerging technologies that banks can utilize to better their customer experiences. The key aspect of banks that need a radical transformation is their culture to resist innovations. With the rise in the number of fintech players, there may be a time when banks become obsolete as customers would invest wisely in services that empower them to do more on their own rather than relying on long-drawn-out banking procedures. The future is digital, but you need to invest in the right technologies to stay nimble. Talk to our experts today to see how you can offer a differentiated digital banking experience for your customers with digital transformation.