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January 25, 2021 - by Synoptek
No industry today is untouched by the digital revolution – and banking is no different. Unlike a few years ago where most banking organizations stayed away from digital transformation mainly because of data privacy and security concerns, the scenario is completely different now.
Probably, the only thing different is the varied pace of transformation. Many are still at a nascent stage, and the delay in the adoption of digital technology is mainly because of the presence of complex legacy infrastructure, which acts as a deterrent in enabling digital interactions. However, to stay competitive, enhance customer experience, and improve operational efficiencies, all players in the banking domain will have to quicken their pace, and the only way to do this is by embracing the latest trends.
The major transformations that are happening in the financial and, more specifically, the banking industry today are directly or indirectly a result of new, emerging technologies. From overcoming traditional banking challenges to improving back-office efficiencies, accelerating the delivery of digital products/services to reducing costs, and improving risk management – digital technology adoption will help make banking a seamless and customer-friendly experience.
Like every year, the coming year will see more and more banks prioritizing customer experience over everything else. This will begin with building innovative mobile banking applications to delivering a gratifying UI, ensuring 24×7 security of data to easier and streamlined access to banking services. Essentially, every strategy that banks will create in 2021 will focus on the overall customer experience. That being said, here are three technology trends that are going to shape the future of the banking industry in 2021:
Although SaaS and PaaS have been popular in the banking industry for a few years, as banking gets increasingly integrated across industries, in 2021, more comprehensive models like Banking-as-a-service will become extremely widespread. Banks, by means of integration of digital banking services with products of non-banking businesses, will be able to offer customers of other industries an array of sophisticated digital banking services. These will include mobile bank accounts, credit and debit cards, loans and payment services, etc. without customers having to create an account with the bank. Banking-as-a-service providers will provide the required banking infrastructure via an array of different APIs that can be integrated together to form customized banking frameworks.
As digital banking becomes increasingly versatile and accessible, cyberattacks and social engineering hacks are bound to be rampant. To deal with these attacks, 2021 will see the banking industry embrace AI-enabled security mechanisms to safeguard the business against malicious occurrences. When integrated with digital banking, AI will learn about normal behavior associated with any given user and register them as positive interactions. At the same time, it will notify the user of any malicious behavior. This may include failed login attempts, access to banking services from an unregistered location, or efforts to edit account details – thus ensuring the safety of user data.
With credit card misuse (and loss) becoming commonplace, 2021 will also see major banking players enable card-less transactions. Such transactions will not only eliminate the possibility of attacks; it will also help minimize illegitimate account access attempts. In the coming year, more and more banking customers will be able to carry out banking-related transactions via mobile devices, QR codes, and NFCs. Biometric identification and two-factor authentication mechanisms will ensure safe and secure card-less transactions in 2021 and beyond.
Like every year, in 2021 too, new technologies will transform the banking industry, bringing forth both opportunities and challenges. But the adoption of banking industry trends and technologies will ensure that banking organizations overcome the challenges with ease. Successful banking strategies will be based on every organization’s understanding of how digital technologies can create value for the business. By investing in them accordingly, you will be able to boost business process efficiency, enterprise security, employee productivity, and overall customer experience.
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