Over the next few years, there will be transformational changes to the financial sector and by association, the traditional banking landscape as well. While the goal is to provide customer-friendly interaction, safety and security will continue to play an integral part in this change. Advanced biometrics and cryptography will continue to protect consumers, but on a much larger scale to detect and avoid potential scams and other fraudulent activity.
Blockchain will continue to fundamentally change most banking and financial services. It will continue to decentralize financial management into a secure network of computers away from traditional centralized business models.
It remains a major security shift in financial transactions as each transaction is broken down into “packets” or “blocks”. They are grouped together and act as an enhanced encrypted chain of computer code. This transaction, once completed, is written into the ledger and cannot be deleted.
This technology has the power to improve many facets of banking – it is after all the basis for cryptocurrencies like Bitcoin etc. It isn’t a question of if blockchain will take over the banking industry, but when.
Digital and Mobile Banking
There has already been an explosive growth in the banking industry with mobile and digital transformation. More than ever, banks are heavily investing in digital banking technology. In a recent report issued by Lauren Foye, by 2022, banks may end up seeing 90% of their customer interactions automated by the use of chatbots. In another report, 43% of respondents stated that they would prefer to resolve any issues with their banking provider through chatbots or live chats.
Banking More Like an Apple Store Experience
Perhaps you are seeing this already in your city. The in-bank experience is fast becoming very similar to spending time at the genius bar in one of Apple’s retail outlets. When you think about it, it seems logical though. You have your bank app downloaded, you can always make a deposit or grab cash from an ATM, so the most logical reason you would need to walk into a bank would have to involve personal interaction.
Many banks have considered this to be the next evolution in banking that will result in increased sales. They consider this transformation as a new customer engagement experience that deals more directly with bank products and services offered, Apple store style. Some customers will be directed to kiosks to complete their queries while others will remain with a representative for a more personal interactive experience.
Wearables in Banking and Finance
It would almost seem logical to see smartwatches as the next big thing in the retail banking experience. For example, Bluetooth beacons can be used to push bespoke greeting to customers who enter a brick and mortar store.
It’s not just consumers though that would experience the change in technology over the next few years. Banking employees at the branch level, those who perform the teller function, might make use of smart glasses in particular. Customer information could be processed while simultaneously, the employee is working on other service tasks related to that customer.
Non-Banks Are Slowly Encroaching into the Banking Sector
According to Deltec Bank, the Bahamas, “While banks attempt to make transactions and delivery of a faster more transparent experience to their customers, a very large section of their resources must remain targeted to security, compliance and other regulatory requirements specific to their vertical.” This has allowed for non-banks to flourish. Since these financial companies can adapt very quickly and devote a large percentage of income to funding cutting edge technology, they continue to attract tech-savvy customers who prefer to move at a faster pace towards banking convenience.
Banking technology is being gently steered by consumer behavior and smart device trends. This is all done in an effort to provide a better customer experience. Consumers will have more banking or financial services money management options in the palm of their hand. If they need to walk into a branch, services will likely be delivered more in keeping with a sit down relaxed setting over coffee than the traditional ways of impersonal type banking.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.