How is Technology Impacting the Future of the Banking Sector
The banking industry has been evolving since the 18th century, and it is considered one of the world's oldest industries. With each passing year, it has improved and grown.
As the technologies advance, the sectors and companies with unique technology solutions and the ability to quickly adapt have a competitive advantage. While the pandemic has hastened technology deployment across industries and sectors, our reliance on it has increased dramatically.
Technology has helped reshape the banking sector to a greater extent in recent years! Banks have always been associated with long lines and overwhelming paperwork. However, the demand for labour and papers has decreased dramatically due to technological developments in the banking business.
Embracing futuristic technologies has also gained traction in the banking and financial industries. In tech deployments, streamlining services for clients and system updates are fast gaining acceptance.
Mobile wallets, Online deposits, e-bill payments, and other similar financial operations have become the standard in recent years. Artificial intelligence is at the heart of the digital banking transformation thanks to increasing customer demand for digital banking services.
In a year marked by notebandi–the withdrawal of 86% of the value of India's currency in circulation on November 8–cashless payments increased 22% in October 2016 compared to October 2015, indicating that Indians have been steadily increasing their acceptance of various digital payment modes.
According to a forecast by CLSA, the value of digital payments in India will triple by 2026, reaching $1 trillion from $300 billion in 2021, thanks to the government's initiative to increase financial access by combining no-frill bank accounts, the Aadhaar card, and a mobile connection.
In addition, the expansion of fintech and neo-banks, which are making the entire banking process more convenient and hassle-free for customers, is largely following these advancements.
But, what does technological enablement bring to the table?
When banking relied entirely on human accuracy and expertise, flaws and blunders were more obvious. Human capacities are limited; therefore, they are prone to overlooking details or making calculating errors. The frequency of errors has decreased to virtually zero with the arrival of computers. Another essential aspect of this is that the data can be protected considerably more effectively. Today's technology ensures that your transactions are completely secure and your data is kept protected, so data misuse is quite unusual.
The old banking system was exhausting and time-consuming, resulting in unsatisfactory client experiences. This was because one had to wait in long lines, file numerous papers, and be physically present. The introduction of net banking and mobile banking has lowered the amount of time you spend on banking-related duties while also ensuring hassle-free customer support even from a distance.
The Reserve Bank of India (RBI) has urged all Indian banks to use Business Intelligence (BI) to boost the industry's overall profitability. A business intelligence system provides data for historical, current, and prospective trends. This information assists banks in making appropriate judgments, which can lead to an overall rise in profits, productivity, efficiency and profitability.
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Let's uncover some baking tech trends that dominated the sector:
Banks are increasingly embracing blockchain technology to implement risk management measures, making it impossible for hackers to steal personal information such as customer bank details. The sector is already experimenting with blockchain technology by recreating current asset transactions. It aids in increasing efficiency, enhancing security, and facilitating faster transactions at lower prices.
For financial institutions to compete and develop, open banking is a critical strategy. Banks integrate their financial solutions into third-party software and provide consumers with a single interface to access their bank's services. Banks can make their services available to their consumers across applications for easy payments by working with fintech. Due to accessible banking services, online payments like purchasing meals from Zomato or digital payments in Uber are available.
As people's reliance on cash decreases, corporations like WhatsApp, Google, and Amazon are developing their own payment systems. In addition, biometric payments are changing how people pay for things with their phones. Payments are made in a matter of seconds after their finger, or facial recognition technology is scanned.
Banks heavily utilise AI and machine learning to provide just-in-time, personalised services to their consumers. AI and machine learning automate banking procedures and improve customer service, credit, and lending services. They also fight against fraud.
The majority of banks have begun to migrate to cloud-based banking. Banks can use the cloud to synchronise their entire business and break down operational and data barriers in customer service, finance, risk, and more. This improves cost-effectiveness and allows businesses to give clients digital experiences while maintaining their traditional model.
As consumers get more comfortable with voice-based interactions, banks will begin to offer many services using a voice interface. For example, Chatbots in the financial industry save almost four minutes per transaction. It would also enable banks to obtain client feedback simply and cost-effectively.
Leveraging the power of technology, Neobanks also have moved towards a technologically enabled manner of working and operations. With NuCash, banking + transactions + bill payment + split bills are made easy! NuCash offers the simplest way to divide bills. Also, considering they operate solely within a digital space and infrastructure, they have better, tech-enabled methods of banking operations which can be seamlessly done from the comfort of your home.
With technology advancing at an unprecedented rate, banks still have a lot of room to fill in the gaps to satisfy their customers' expectations. Therefore, banks are collaborating and integrating their services with fintech and neo-banks to provide consumers with better and more efficient technologies thanks to modern banking technologies.