5 Technologies That Banks Are Banking On
Chatbots and ML technologies are not what banks are heavily investing in! A bunch of other useful technologies is what is scaling banks and bringing it in unison with technology. Read on!
If there is one industry that is consistently growing, it is the technology sector, and the banking sector is making the most use of it. Banks and financial services possess the highest power in the economy- handling money.
The sector has allowed itself to transform digitally in the past decade and 2020 seems like the year where technology and banking come together in full capacity.
As per reports, banks are the ones that spend maximum on technology than any other industry which explains why they get the best of the services. They spend approximately $150 billion per year just to get the right technologies. Since 2009, banks are having the best years in the stock market.
While some technologies are more spoken about than others, to understand what are the trending technologies in banking, one must look at technologies that banks are investing in. It might come as a shock that chatbots and machine learning technologies aren’t actually garnering as much investment, these technologies are:
5 Technologies That Banks Are Banking On:
Application Program Interface or APIs have already seen a 35% deployment in financial institutes that are community-based. For banks and financial institutions to survive, they need to be quick to integrate partners’ data or products and can’t stretch that activity for 10-12 months Another challenge is the amount of time that partnership processing takes since it involves negotiating legal matters, pricing, revenue sharing, etc.
APIs are quick with their speed, personalization, and agility. On the personalization front, partial stack fintech and full-stack banks are all integrated through APIs.
Moving to the cloud has been a great experience not just for banking but for other industries as well. Close to a quarter of financial institutions are investing in computing technologies in 2020 and around 40% of the other is believed to have already done it.
The banking industry needs cloud technologies to support the requirements of adoption AI which requires a lot of data. Another development would be in moving to analytics which would also need cloud infrastructure to enhance the capabilities.
Digital Account Opening
The most popular and most relevant investment banks have made is in DAO technology where more than half of the banks are either setting up a new system or replacing one in 2020. The one thing that banks need to identify is how to get the digital account opening process right. After having moved to digital technologies, they also need to make the regulations easier for people to access the portal. While auto-filling the basic information is great, banks need to make their identity verification more stringent. Once this is done, a digital account opening would see a major elevation in 2020.
There are at least 40% of banks that are looking to upgrade or modify their P2P payment procedures. The biggest advantage of P2P Payments is the convenience and speed of using it. With just a click of a button, funds can be transferred from one person to the other. Since we are moving towards a cashless economy, most of us don’t carry cash. Hence, banks investing in this technology and making it a part of their app would be at a big benefit.
Video Collaboration or Marketing Tools
Few reasons why banks would invest in video technology are- speeding up the decision-making process, more productivity, higher product innovation and of course, better customer experience. Banks are also investing in marketing tools to better their services and be at par with their competitors at least if not ahead of them. Videos bring in a more human element that gets work done better.
The digital revolution, while being a great push for banking services, also invites more competition. The coming year will also be a challenging one for banks in terms of interest rates, political climate, and discount brokerages. Investing in the right technology might help them sail through.