With customers becoming more accustomed to online and mobile banking, banks and financial organizations continually strive to perfect these programs. They have adopted various technologies into their operations to remain competitive and improve business results. This has enabled financial organizations to streamline their processes, enhance customer experiences and expand services. While there are numerous changes happening that impact the banking experience, here are five trends that are redefining the landscape.
1 ) 24×7 Mobile and Internet Banking Services
In this digital age, people prefer to receive notifications for every credit and debit transaction and perform their financial transactions on their smartphones from the comfort of home. Mobile banking apps are driving personalization through easy access to complex offerings from anywhere in the world. They also take care of account security with biometric authentication, one-time-passwords and secure logins.
Banks use artificial intelligence (AI) to facilitate mobile banking, enabling customers to perform any banking operations 24/7. Cloud computing makes 24/7 customer service available from anywhere, helping financial institutions control costs by only paying for the services they use. It also enables fast, secure online payments, digital wallet transactions, and online transfers.
2 ) Enhanced Risk Identification
Financial data enables banks to categorize customers into high-risk, low-risk and potential-risk categories. This is used to detect payment fraud, improve processes for anti-money laundering, and know-your-customer (KYC) regulatory checks.
AI utilizes machine learning (ML) algorithms, software that self-improves as it is fed more and more data, to observe customer behavior and location, track transactions, recognize dubious activities and keep up with suspicious accounts. Deep learning combines data from multiple sources to identify transactions that could be high-risk, whereas ML allows for intelligent decisions about applying the right level of security at a precise time.
AI platforms help banks identify loopholes in their networks and breach attempts, and can help prevent cyberattacks. AI not only boosts fraud detection capabilities among financial institutions, banks and foreign exchanges, but also adapts to the changing nature of fraud in real time. AI analyzes hundreds of transactions simultaneously, and alerts the cardholder after detecting anomalies in spending. AI can help banks predict issues in advance and take early steps to avoid problems.
3 ) Secured and Verified Transactions
Security is paramount for financial institutions, from mobile apps and web portals to third-party networks. Blockchain is a distributed database that can keep track of every transaction with multiple points of verification. The multipoint verification secures the information being transmitted and safely stores details of every step across multiple nodes (computers/servers) of a network.
Blockchain is used by banks and financial institutions to facilitate faster, safer and more transparent transactions or currency exchanges for customers, significantly reducing balance sheet risks. It is also used to transform paper-intensive international trade finance processes into an electronic, decentralized ledger that provides secure access to all concerned entities. It helps to improve efficiency, cost-effectiveness, security and customer satisfaction, throughout the entire spectrum of financial services. It also supports the storage of any type of digital information.
4 ) Use of Big Data in Decision-Making
With the increasing amount of data generated every day by the banking sector, it would be difficult for a human to extract actionable insights that can help build more opportunities. But thanks to big data, banks are able to get the information they need to stay competitive in the future.
Financial institutions use big data to make business decisions in real time by learning about a customer’s spending habits. Big data has found its roots in almost every banking operation, including accounting, merchant services, compliance, credit assessments, wealth and asset management, cybersecurity, customer service, sales and marketing, infrastructure security, audits and many more.
Customer data segmentation helps banks optimize marketing, manage fraud, cross-sell products, assess risk and report information. The adoption of advanced data analytics enables lending decisions for home buying, corporate financing, and retirement planning, among other areas. AI-based credit scoring utilizes more sophisticated rules to allow for a fast, accurate assessment of a potential borrower and eliminates biases.
5 ) Task and Process Automation
Across many financial services, robotic process automation (RPA) is used to save labor and operational costs, minimize human errors, and enhance the customer experience. RPA refers to software that can be easily programmed to enable robots and virtual assistants to complete repetitive and labor-intensive tasks without human intervention. This intelligent automation gives processes the power to learn from prior decisions and data patterns to make decisions correctly and quickly.
Beyond RPA, AI also enables the automation of more complex tasks as natural language processing (NLP) and deep-learning technologies improve. These developments will allow systems, trained with large data sets of information, to accurately read the text and identify objects in pictures that can then be used to solve inquiries or support human decision-making.
Robots and Chatbots are being deployed by many banks and financial companies for conversations either by chat or speech with humans by integrating more advanced technologies including NLP, ML, AI, and analytics. Robots can be used for multiple language customer support and interaction, greeting customers to help them navigate virtual banks and get them the information they need.
A chatbot can take care of inquiries over websites, answer queries, and suggest loans. It can help in opening an account, making deposits, registering users and much more. The chatbot can answer thousands of queries per second as per their capability which takes a substantial load off the service team. Chatbots reduce costs and meet customers’ expectations regarding quick response and effective issue resolution.
Banks are increasingly using AI and ML for automating back-office functions, processing automation for trade finance, smart contracts, foreign payments, and KYC processes. Automation frees up the resources and let’s restructures the workforce to focus on more pressing tasks.
As more banking services shift online, banks will endeavor to make routine transactions and interactions convenient. Financial firms will grow their use of data analytics to take on new roles, combining digital and physical services in a seamless manner.