Application of Digital Technologies in Banking

What is the importance of digital technologies in banking? Digitalization is changing how people connect and do business on a daily basis, and advances in the banking technology are continuing to shape the future of financial services worldwide. The growing desire for a digital banking experience among millennials and Gen Zers is slowly changing the banking sector and taking it to other whole new dimensions.


How Banks can use Digital Technology


Technology plays a role in practically every part of the banking business, from mobile and retail banking to neo-bank startups. It's helping propel banking into a digital future. Retail banking, often known as consumer banking, refers to the services that banks can provide to their customers, such as savings and checking accounts, credit and debit cards, and loans. Meanwhile, mobile banking has sealed its place as a must-have accessory for financial companies looking to stay ambitious, especially among millennials and Gen Zers.


Future Expectations in Mobile Banking


Online banking refers to the complete digital banking experience, which includes mobile applications, desktop, live chatbots, and more. Mobile banking has become the preferred means for customers to make deposits, account transfers, and track their spending and profits, as well as a vital differentiation tool for banking businesses. Almost 80% of those who have used mobile banking claim it is their primary method of accessing their bank account. Financial institutions should learn which mobile banking services consumers appreciate the most and where they stand compared to their rivals so that they may focus their efforts in areas that matter most.


The consumers' primary concern in mobile banking is security. The threat of a data breach raises the need for functions that keep users' data safe. Allowing users to place holds on debit or credit cards, set travel alarms, and submit and study card transaction conflicts are just a few examples of the successful features that have improved security in banking. 


Future Expectations in the Online Banking Sector


Mobile banking has eclipsed internet banking in popularity as the overall number of online consumers continue to decrease globally. Mobile banking is expanding five times faster than internet banking, and half of all online clients now use mobile banking, according to Insider Intelligence. Despite this rising popularity, most banks still cannot meet the demand for mobile tasks such as bill payment and incentive redemption, forcing them to redirect consumers to online banking. Even yet, as millennials and Gen Zers continue to gravitate toward the mobile market, this drive will not be enough to mainstream internet banking. Neobanks, or digital-only banks, are revolutionizing the future of banking throughout the world. Despite a slow start in the US because of current developments, high regulatory obstacles, and administrative easing show that the US neobanks are expected to take off.


The Future of Fully-Digital Banks


Sophisticated mobile banking technologies remain the main catalyst to the meteoric development of US neo-banks, and their relevance has grown in the aftermath of COVID-19. To effectively grow their operations, incumbent financial institutions, neo-banks, and digital firms may all benefit from knowing how leading neo-banks are raising the bar for client expectations and trust. Chime, the largest US neo-bank, is situated in San Francisco and has approximately 7.4 million account users as of 2019, with a predicted growth to 19.8 million by 2024. 


Latest Technology used in Banking Sector


Consumers who see technology as something that enhances their lives, are driving the future of digital technologies in banking. Using an application programming interface (API) to make private data available to anybody with the consumer's permission is a frequent trend in banking technology. Banks are embracing artificial intelligence to improve client verification and identification while also mimicking actual personnel with chatbots and voice assistants. APIs might make it possible for a bank's mobile app to retrieve customer account information. Fintechs have also taken up API technology to power their operations, and their progress has prompted opponents to set up their own APIs. Furthermore, according to a 2020 Insider Intelligence poll, 66% of banking executives predict blockchain, artificial intelligence (AI), and the Internet of Things (IoT) will have the largest influence on banking by 2025. Banks are trying blockchain technology with the aim of simplifying operations and lowering costs, according to Insider Intelligence. Consumers may already see AI being deployed by most banks in the front office via chatbots. Banks are embracing artificial intelligence to improve client verification and identification, while also mimicking actual personnel with voice assistants and chatbots.

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