We are living in the digital age, almost every decision of our life is made on an interface, be it getting our daily dose of caffeine through a coffee machine, ordering food on an app or withdrawing money from an ATM. Customers want everything on the tip of their fingertips, which has forced a technological shift in every industry. Hence, never before has there been greater importance for technology in the banking industry. The increasing competition from FinTech firms has to lead to traditional banks embracing new technologies to win customers. And this adoption of the latest technological trends in the banking industry is only going to increase. Here are the latest emerging technology trends for the Banking and FinTech space in 2020.
1. Financial crime risk management using AI
A few years ago, the idea of a cashless society seemed unimaginable, but day by day, it is turning into a reality. Governments and financial institutions seem to be in favor of this shift as more and more merchants are adopting digital payments in the form of mobile wallets, UPI (Unified Payments Interface), and BHIM (Bharat Interface for Money). But a cashless society comes with its own set of challenges, digital identity theft being one of the major concerns.
Artificial intelligence will be the key to tackle financial crimes. PwC’s 2018 Global Economic Crime and Fraud Survey has found that existing approaches to combating online fraud were generating too many false positives. The solution is to rely more on machine learning and AI in combination with predictive analytics. The use of AI and big data is ideal for detecting anomalies in large-scale data sets in seconds, which thereby reduces the crime-fighting costs for Banking in 2020.
AI can not only be used as a security measure but also for providing an enhanced customer experience. Based on past interactions, AI develops a better understanding of customer behavior, which enables banks to tailor their products and services for a particular customer. Thus, experiencing higher engagement rates and building stronger customer relations.
2.Using Blockchain in Banking to eliminate intermediaries
With the enormous success of bitcoin, banks have become increasingly interested in blockchain. Blockchain uses a distributed ledger system where the computer network is decentralized, and transactions are verified and approved by all participants in the exchange before it becomes a part of the chain. This makes blockchain transparent, highly secure, and relatively cheap to operate.
Blockchain can support banking technology in several ways. Blockchain can eliminate manual data reconciliation for bank ledgers. Also, the way information and money are exchanged today will be altered by smart contracts that operate from blockchain technology. It would eliminate the need for intermediaries and provide enhanced privacy, security, and efficiency in multiple banking use cases like payments, clearance & settlement systems, stock exchanges & share markets, trade finance, and lending.
3. Biometric security systems for customer authentication
As the world becomes increasingly more digital, the number of passwords people have to manage is becoming a serious problem. This is where biometrics come in. Certain traits like fingerprint, iris, face, and voice are unique to an individual and offer a greater means for user authentication over passwords. While passwords can be shared, biometrics are extremely difficult to replicate.
Biometric technology, combined with already existing security systems in traditional banks, will empower banks to deploy the highest level of authentication security. The future of biometric authentication technology looks rather promising with the growing need for transactional security and the increase in the number of mobile devices with biometric capabilities. This is a great progress for the banking space in 2020.
The banking world is changing. With the boom in smartphone technology and the availability of high-speed internet services, people are rapidly embracing mobile banking technology. Customers have become techno-savvy, and when it comes to managing their finances, they are demanding more transparency, personalization, and convenience. FinTech companies can meet this demand with the use of modernized solutions and client-centered options. The only way traditional banks can stay ahead of the game is by integrating the latest technology trends in their applications and providing a great overall user experience to their customers.