Banking is no longer what it was 20 years ago. And it won’t be what it is now 20 years later. Online banking has eliminated the need to visit banks for any transaction and mobile banking apps have personalized the entire banking experience. Who knows what will come next in the banking industry?
The rise of digital technology is rapidly changing the banking experience as we know it, and fintechs are drawing more people into formal finance. The latest innovations make it easy for customers to bank anywhere with an internet-connected smartphone, and banking security is now ensured by data clouds where artificial intelligence (AI) is revolutionizing the industry.
This guide will highlight some of the technological advances that are sure to revolutionize the banking industry in the coming years.
1. Artificial intelligence
Do you think artificial intelligence is limited only to chatbots? Or that OpenAI’s ChatGPT and Google’s Bard are the only trendy AI tools in the world today? No. The banking industry is also implementing many AI applications for services such as customer service chatbots, virtual assistants, fraud detection, early warning systems to improve security, accurate credit reporting for better credit decisions and financial forecasts, as well such as risk assessment among others.
2. Open banking
Do you know that online lenders can access your banking information when you give them access through mobile apps? That is the core aspect of open banking that is coming to the industry very soon. Banks will allow online lenders, insurance companies, and other financial firms to access bank details (without compromising regulatory compliance, of course) after customers give them approval. This will allow banks to acquire customers from third-party platforms and will also be able to interact with accounts from non-bank sources.
3. Ultra-personalized banking
Online banking is evolving rapidly with the emergence of new innovations. For years to come, financial institutions will rely on AI to bring you ultra-personalized banking services in wealth management, financial consulting, investment research, personalized loan advisory and approval tools, debt settlement, and more. AI will be used to analyze customer activity and provide personalized banking experiences.
4. Blockchain technology
Decentralized finance (DeFi) and blockchain technology will soon reach mainstream banking. Cryptocurrencies and other digital currencies rely on blockchain technology to protect against manipulation and review of transactions. This will improve the integrity of financial data and also facilitate cross-border payments. Ultimately, the use of blockchain technology in the banking sector will increase transparency of transactions, increase security, and reduce transaction fees for customers.
5. Quantum computing
Banking operations consume energy and computing power. Bank servers need to be up 100% of the time to serve customer needs 24/7, and this consumes a lot of energy and computing resources. But quantum computing is coming: this will reduce the amount of energy stored and optimize it for instant access, while lowering the costs associated with data storage. This can use cloud computing and storage to maximize resources and secure access.
6. Digital-only banking
In the coming years, neobanks will explode and become common for everyone. Neobanks are exclusively digital banks that operate online without any physical office or address. Many microfinance banks and online lenders operate as neobanks in the sense that many of them operate solely online and have no physical presence. With neobanking you can do everything like in a traditional bank, with the added advantage of greater privacy and comfort.
7. Improved cybersecurity
Banks and credit card companies take cybersecurity very seriously. Data compliance, security protocols, and encryption tools are updated daily to safeguard customer data and prevent fraud. Financial institutions are constantly targeted by cybercriminals, using identity theft, phishing scams, security breaches, and other clandestine methods to steal customer data and money. But this will no longer be possible with the enhanced cybersecurity measures that the banking industry is implementing to meet customer needs.
Summary
The latest innovations and emerging technologies are revolutionizing the banking industry. These range from the use of AI to blockchain technology and the Bank of Things (BoT) to neobanking. These will improve banking operations and safeguard customer security, while simplifying personalized banking for customers. It will also ensure less human interventions in banking operations, leaving everything to AI.
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Categories: Technology
Source: vtt.edu.vn