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To satisfy the needs of customers and succeed, each industry must keep growing and developing. In the financial industry, too, the same principle holds true. Many in this industry have resisted changing their systems and management for years since they are the result of years of hard work to address consumers’ urgent needs. These systems are less suited to today’s technology-driven world, which is why this sector has been hesitant to change.
The old banking system is under constant threat from FinTech firms, which are springing up on a daily basis. Banks were forced into action as well and had to come up with an assortment of digital and innovative efforts to answer to the challenge.
Banking Technologies
In the same way that technology has impacted other industries, it has also had a major impact on the banking sector. People’s daily interactions and business practices are being transformed by the widespread adoption of digital technology. When it comes to digitisation and technology utilisation in the banking industry, both the epidemic and technological advancements have had a role in the process. According to the Reserve Bank of India’s annual report for 2020-21, India’s total digital transaction volume was around 4,371 crores in 2020-21, whereas it was 3,412 crores in 2019-20. Technology and digitalisation in banking have created a wide range of innovative and speedier solutions for clients’ banking-related challenges.
Following are some of the current technology trends driving the banking sector:
Open Banking
Banks in open banking systems employ third-party software to integrate their financial solutions, giving their clients a single point of entry to all their banking needs and the bank’s services. In order for financial institutions to compete and expand, open banking is an essential approach. Fintech businesses and banks work together to make it easier for clients to make quick and easy payments using mobile apps. Online payments for buying meals from Zomato or reserving an Uber with an online payment are just a few examples of this type of transaction.
Blockchain
When numerous parties need access to the same data at the same time, they can use blockchain technology to ensure the integrity and immutability of the data are preserved. Banks are increasingly relying on blockchain technology to keep their critical information safe from hackers. In order to increase efficiency, boost security, and speed up transactions, banks are continually experimenting with this new technology.
Biometrics
If you’ve ever wanted to make a quick payment by scanning your fingerprint or using face recognition technology, biometric payments are for you. It’s becoming increasingly popular as more and more people want to avoid carrying around cash. Whatsapp and Google are among the firms that have already developed these kinds of solutions.
Cloud Banking
For many banks, cloud banking is transforming their cost-efficiency and allowing them to create new experiences for their clients while maintaining the traditional model in place. In the cloud, banks are able to synchronise the enterprise and break down operational and data silos across customer care, finance, risk, and other areas of the business.
Artificial Intelligence And Machine Learning
These days, AI and ML don’t require an introduction, and banks are quickly adopting them in order to provide consumers with just-in-time, personalised service. They automate banking operations to improve customer care and credit services as well as prevent fraud.
Chatbots
Speech-based engagements are becoming increasingly popular with clients. Therefore chatbots rely on a voice interface. Financial chatbots have been shown to save banks over four minutes each transaction and allow them to gather client feedback more quickly and cost-effectively.
‘Zero Trust’ Security Model
The zero-trust security concept is utilised to prevent cyber fraud to the greatest extent feasible. Secures the company by taking away implicit trust and requiring the user to authenticate their identity and their device’s identification in a stringent manner throughout the whole network.
Wearables
Increasingly popular among customers, wearable gadgets such as smartwatches are transforming digital payment methods and creating a more engaging shopping experience.
Conclusion
This means that in order for banks to provide secure and improved client service, they must keep up with technological changes around the globe. It has also been shown that banks have effectively done so, employing different tools and technologies as well as cooperating with FinTech businesses to enable payment digitalisation and at least some degree of cashlessness. While banks strive to prevent cyber fraud and improve the customer experience, there is always room for improvement.
