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The times we are in are unprecedented. With the advancement and adoption of technology in the banking sector, the manner in which people interact and do business has significantly changed. What then will be the future of banking and what will determine its future.
The evolving customer demand and expectations are expected to have a bigger say in the future of banking, whether it is Mobile, Retail or Digital Banking.
Mobile banking is one of the common methods employed by users to make payments, deposits and monitor their spending and savings. A majority of banking users prefer the use of mobile banking, considering its convenience and efficiency.
However, one of the biggest concerns for mobile banking users is security. The fear of data breach increases the demand for services that can protect the data of users.
Mobile wallets are another revolution in mobile banking. Such applications emphasize convenience, and it allows users to make purchases online without the need of a physical debit or a credit card. Successful mobile banking options include money management features that enable users to cut on spending and increase savings.
The future of Mobile Banking[1] can be expected as pointing toward offering savings tools and financial wellness scores. It can work among the millennials. Moreover, mobile banking apps are expected to become much more secure than what it is today apart from being more personal and user friendly. With innovative technology, mobile banking applications are likely to provide a great user experience to their customers.
Some of the future mobile banking trends could be as follows:
Voice-activated commands have already made waves with global consumers as voice user interface improves customer engagement, conversions and insights.
As banks and financial institutions grow their revenue and expand their services, they also run into a great security risk. However, another trend in mobile banking can help fintech to safeguard their resources and protect their customers’ identity. The use of big data allows banks and financial institutions to improve the risk assessment process and also helps in streamlining customer experience while reducing the impact of fraud.
While this mobile banking trend is not entirely new, its increasing adoption by banks shows its swelling popularity, and it could be the future of banking. Earlier credit and debit cards were replaced by mobile wallets for online purchases, and now it’s their turn to step down at ATMs.
Retail banking refers to the specific services banks provide consumers like savings and checking accounts, credit and debit cards, and loans. The growing desire of consumers to access financial services from the digital medium has led to a surge in new banking technologies that has caused the entire retail banking market to reconsider.
The use of technology to improve the operational efficiency of retail banks is positively impacting the market. It can also cause an improvement in customer experience. Modern banks are now less concerned about sales but are more about creating customer experiences.
Retail banks are launching platforms in Banking as a service space to remain competitive. Retail banks previously had played a massive role in finance and daily life of people with customers visiting bank branches for banking services. Today these bank branches have become obsolete with the coming up of digital apps and online service portals, providing a faster and more convenient way to access their banking.
Retail bank design is expected to shift to meet the consumer needs by embracing both physical needs of space designed not to sell but to connect and the rapidly changing demands and expectations of consumers.
Some of the future retail banking trends could be as follows:
Retail banks are increasingly equipping employees with digital capabilities to cope with rapid technology disruption in the industry. This could continue in the future as well.
Banks are collaborating with fintechs to explore point of sale financing. Point of sale financing is appealing to consumers who are in search of more flexibility than traditional credit purchases allow.
We have already seen retail banks employing strategies to provide great user experience and in the process, remove friction from the customer journey, thereby strengthening the customer relationship. This could continue in the future.
Banks are looking to blockchain technology to improve and streamline KYC and identity management programs. Banks are expected to enhance the relationship by streamlining services that involve customer interactions thanks to Artificial Intelligence.
In order for banks to stay relevant, they cannot take the support of outdated technologies, but they are required to increasingly innovate with the evolving technologies. In the future of banking, we may see banks following this pattern where there is an intent to innovate.
Digital banking is the digitalization of banking services with a view to improve efficiency and serve the customer better. It allows the customers to do banking transactions and access banking services without even stepping out of their house. Digital banking is actually the future of banking. With convenience and comfort, it offers to consumers, more and more people are now vying for it.
Considering the impact of Covid-19 pandemic, now expect more people to shift their bases from traditional banking to digital banking. With the Covid-19 related challenges like lockdown and social distancing norms, many people who were earlier reluctant to use Digital banking have been forced to use it, and now they are comfortable with it. It is expected that more and more people will get on board.
The ways through which the future of digital banking could be impacted are as follows:
The user experience is one of the essential factors in digital banking. With AI and machine learning in Digital banking, it helps in providing customized and tailor-made services for every consumer.
With the way new technologies are emerging, consumers may enjoy a service that is suitable for their own banking activities.
The importance of security is supreme. That’s why the banking sector is a highly regulated sector. Methods such as two-step authentication and biometrics are gonna go a long way in the future providing a fool proof banking security. With an advanced layer of security, more consumers will trust the digital platform with their hard-earned money.
With the human factor replaced with digitalization, the chances of error become less, thereby increasing the productivity level. Use of machines reduces the chances of error in calculations in banking.
The integration of business intelligence looks possible in digital banking. It is expected to bring in a lot of benefits to banks. It provides accurate, unbiased and function-specific insights based on historical, present and future banking trends. It will further help in banks increasing their efficiency and will take their services to another level and also generate more revenue.
Technologies that are expected to play a massive role in the future of banking include Artificial Intelligence (AI), biometrics technology, blockchain, cloud computing, augmented reality and quantum computing. These are poised to transform the nature of services that banks provide and also how they are delivered and consumed.
Read our article:Evolution and Growth of Digital Banking in India
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