The past year has hit the reset button on how organizations across industries function on a day-to-day basis. Banks have always been early adopters of technology, and the pandemic has only further accelerated their digital initiatives.
Let’s take a sneak peek into the future of banking with five key trends that are predicted to revolutionize the industry in 2021.
- Customer expectations for online banking to rise
It is common to see millennials engage with their banks through digital channels. In the new normal, however, this expectation goes beyond a specific generation. Today, people of all age groups prefer digital mediums—including mobile apps, web portals, and self-servicing platforms—to meet their banking requirements. Even for critical transactions, people are reluctant to visit a branch, and instead, opt for low-touch environments and minimized human interaction.
- Information security to become of paramount importance
The growing popularity of remote operations means an increased exchange of critical and sensitive information, especially financial data, between banks and customers on the cloud. This exchange usually takes place through a bank’s backend system or via third-party players. Either way, cybersecurity and access management are going to play a major role in sharing secure and verified customer and financial data. Blockchain technology is emerging as a critical enabler of information security and can be leveraged to verify customer data at multiple touchpoints.
- AI to provide much more context
As companies continue to prioritize speed and customer experience, artificial intelligence (AI) will be the key to streamlining customer interactions and providing context. Be it filling out lengthy forms or reaching out to a bank’s support services, AI can fetch data from multiple sources and bring forward the required information at the click of a button. It can analyze a customer’s profile, web data, and past interactions to offer product recommendations and provide personalized interactions. Furthermore, AI-based chatbots can handle low-ticket items and customer queries for a faster turnaround time.
- Voice-based technology to revamp the banking experience
The integration of voice-based technology and voice-activated devices with banking processes holds a lot of potentials to provide a futuristic edge to the traditional banking experience. Voice recognition is a new, remote, and secure form of biometric authentication that allows customers to safely conduct banking transactions from the comfort of their homes. Banks can leverage the technology to provide a number of voice-activated services to their customers, including checking their account balance and transaction history, placing new requests, and interacting with a digital banking assistant.
- Open API and microservices architecture to take the center stage
Agility and integration are more than just buzzwords—they form a strong foundation for building a truly digital bank. Open APIs allow for interoperability between different mediums, helping a bank’s core system engage with third-party vendors and data aggregators. This can be further bolstered by a microservices-based architecture, which breaks down banking applications into a smaller set of services that can communicate with each other through open APIs. This type of architecture is resilient, reliable, and robust, and will ensure that even if a single process fails, it does not disrupt the entire system.
Making a Shift to Connected Banking
2020 was the year of adaptability, forcing banks to scramble and digitize their customer-facing processes in order to survive.
2021 is going to see a renewed focus on automation and lead to the emergence of connected banking. Banking operations are going to become much more agile, with an increasing need to access data anytime, anywhere. The time is ripe to accelerate digital and leverage technology to stay relevant, competitive, and future ready.