There are a number of innovative banking trends that are reshaping the industry. If financial organisations want to survive they must collaborate, innovate and embrace digital solutions.
AI
Artificial Intelligence (AI) is certainly one of the most exciting banking trends to keep an eye on for 2018. The technology has the potential to transform and automate key areas of a banks’ operations.
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There will be more use of AI through conversational banking to provide tailored recommendations for customers. This will improve the digital interaction between financial institutions and customers, enabling them to communicate better across more digital channels. Furthermore, AI allows for better digital communication, but with that personal touch that consumers still desire.
A report by Unisys in April 2018 revealed that banking customers in Hong Kong are willing to embrace new banking services based on emerging technologies such as Artificial Intelligence (AI) and machine learning.
The report found that almost 38% of those surveyed supported their bank sharing their personal financial data with other third-party companies to access financial products.
In payments, AI has the ability to quickly and efficiently detect fraudulent activity by alerting the system to unusual transactions. This is what HSBC’s employed Ayasdi, an AI specialist for. Ayasdi will automate parts of HSBC’s anti-money laundering investigations.
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By GlobalDataHarnessing AI allows banks to become more automated and flexible.
Open Banking
Open Banking went live in January 2018 enabling the creation of new types of interactive smart banking services and strategic partnerships. However, hitting the regulatory deadline was a problem for a lot of incumbent banks. Many still relied on their legacy systems.
With incumbents struggling to get the right procedures in place for PSD2, it is clear that banks still have a long way to go as they prepare for the challenges and opportunities that Open Banking offers.
On the other hand, challenger fintechs that boast impressive digital capabilities have welcomed Open Banking. In the UK, Starling Bank made its entrance into Open Banking with the creation of an API-enabled marketplace of third-party services. In Europe, N26 has also based its proposition around third-party add-ons.
However, HSBC is the exception among incumbent banks. The bank had prepared for Open Banking and sees it as an opportunity to find the right partners – and they found the right partner in Bud, a technology platform that links together various financial services.
Overall, Open Banking paves the way for a more open and transparent ecosystem. It enables banks with the tools to provide more tailored products and services to consumers. Now past the six-month mark, more banks are waking up to the benefits of Open Banking. It will be one to watch for the next year as more financial organisations jump on board.
Biometrics
Biometric technology has a number of different advantages that make the banking experience for customers much more seamless.
The use of biometric technology is now being implemented by banks for their onboarding process. Using fingerprints, iris scanners and voice recognition, banks are able to authenticate a persons’ identity in a much more secure way.
Citibank (China) introduced Voice Biometrics authentication in May 2018 to speed up the verification process when a customer reaches out to the bank.
The Voice Biometrics authentication system has already been introduced in multiple countries in the Asia Pacific region. Now it has a customer base of around 4.48 million people.
Mastercard recently partnered with biometric smart card experts IDEX to enable consumers to register their fingerprint data on their payment cards from the comfort of their own homes.
Using biometrics allows customers to feel more engaged with their bank.
In essence, customers desire ease, speed and security. Those needs are reflected in the banking trends that are currently sending shockwaves through the industry.
