.png){kind=logo}
The banking and financial services sector is undergoing a seismic shift, driven by rapid digital transformation across industries. Customers access banking services anytime, anywhere, and from any device, expecting seamless service experiences round-the-clock. In this context, many traditional banking practices will likely become redundant in the near future. The new paradigm will reward those service providers that build robust, sustainable, scalable, customer-centric, and maintainable businesses; that are well-placed to leverage the opportunities of the digital age.
A survey by YouGov shows that 23% of Indians have switched to digital-friendly or digital-only banks. Moreover, 60% of users among Millennials, Gen X, and Gen Z are comfortable moving to a wholly digital bank for reasons such as 24/7 accessibility, remote banking services, and ease of banking. Digitalization is the key to engaging these customers – fueling banking with new-age tech, such as APIs facilitating secure, seamless, and high-speed payments. Interoperability, cost-efficiency, and standardization are the factors that will undoubtedly revolutionize the sector.
Some of the key technologies that will enable banks to broaden their capabilities, and drive customer-focused innovation and disruptive growth, are as follows:
There is considerable interest in the applications of AI in the banking sector. It is estimated that the global market for AI in banking will grow to $64.03 billion by 2030.
Leveraging AI will enable banks to make marked reductions in operational costs, by completely automating routine processes & workflows that previously involved significant human effort. Automation will also minimize the potential for human error in these banking processes. Through AI automation, banks can elevate their customer experience, by offering 24/7 service through chatbots and conversational assistants. Personalization in-service experience, which is increasingly a key customer expectation, can also be delivered more effectively and at scale with AI.
A bank's capability to detect fraud will be vastly enhanced by AI algorithms – with the ability to analyze numerous transactions, pinpoint changes in consumer behavior and isolate fraudulent transactions with great accuracy. AI-based systems also enable banks to ensure regulatory compliance and minimize risk.
Meeting ever-evolving customer expectations in a competitive market is a constant challenge for banks. It becomes incumbent on banking & financial service providers to ensure that their systems allow them the flexibility to adapt to this dynamic environment as required. This is where low-code platforms can add tremendous value.
Low code is a visual approach to application development wherein developers with minimal traditional coding experience can use pre-built graphical user interfaces to drag-and-drop features or 'building blocks' to rapidly create powerful and customized enterprise applications.
Low-code platforms can effectively plug the gap between the growing requirements of banking business units and the finite capacity of their IT teams. It enables banks to build applications or optimize their systems in a swift and cost-efficient manner. Low code also empowers banks to be more responsive to changing customer preferences and demands, contributing to increased satisfaction and retention.
Cloud adoption has steadily risen across industries, and the banking & financial sector is no exception. In a post-pandemic world, customers expect access to all their banking services at their fingertips, wherever they are, without needing to visit a brick-and-mortar location. Cloud computing is the technology that has facilitated this growth in online & mobile banking.
The cloud enables banks to offer customers an experience that is both frictionless and personalized. From transferring funds, resetting passwords, to blocking or requesting credit cards – the easy and secure access to customer data on the cloud ensures that service requests are processed within minutes.
Migrating data and applications to the cloud also significantly reduces the infrastructure costs associated with maintaining the on-premises systems banks have traditionally relied upon. Cloud migration also enhances data security and leaves banks better placed to prevent data loss and recover from disasters, thereby ensuring business continuity.
Open banking is securely granting access to customer banking data (such as transactions or payment history) to a third-party financial service provider. This is accomplished through application programming interfaces (APIs). Once customers provide consent for their data to be shared, service providers will be able to analyze the data, build a detailed consumer profile, and use it to make tailored product/service recommendations.
By embracing open banking, banks & financial institutions can significantly expand their range of offerings to customers, vastly improving their experience. Personalized investment advice, savings notifications, budgeting recommendations, price comparison tools etc., are just a few of the services that open banking makes available to customers.
In addition to elevating the customer experience, open banking stimulates innovation in the financial services sector, creating new revenue streams for banks and enabling them to develop sustainable service models for traditionally underserved customer segments.
AI, low-code platforms, cloud services, and open banking are just a few of the key technologies that will reshape the financial services landscape for 2023 and beyond. Banks must keep pace with these developments, to stay relevant to their customers in a competitive environment, as well as drive exponential growth.
Subhasish Bandhopadhay
Vice President – Global BFSI Domain Head, Happiest Minds Technologies.
Subhasis Bandopadhyay is an innovative, results-driven professional with a proven track record in delivering value-added services. He excels in establishing networks, streamlining workflows, and creating a team-oriented environment. His specialization include practice building, business development, and relationship management.
Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp
_____________
Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.
