Five Technology Trends to Watch in the World of Banking
Technology has long been used first and foremost in the banking sector because of the literal payoff. High-tech security was installed in banks before other businesses were able to utilize it. Here are five technology trends to watch in the world of banking. We’ll explain what these technologies are and how they are impacting financial institutions.
There’s an App for That
There is a common joke that no matter what you ask about, there is an app for that. Banking apps that allow you to check account balances and transfer money have been around for a while; those that let you deposit checks by taking a picture of them came slightly later. Other financial services are moving into apps, whether applying for a loan or managing your budget.
Despite all the attention given to cryptocurrencies like Bitcoin, the most likely long-term impact is the use of Blockchain. The blockchain technology allows you to securely and reliably track digital documents like signed contracts and asset transfers such as selling a loan or selling physical items. Several financial institutions are already trying out Blockchain to secure digital contracts for loan documents and financial transfers, while other institutions are using Blockchain to track assets and avoid debacles like the 2007 US mortgage crisis, where many institutions found they owned securities that had not properly transferred ownership of the underlying assets, in this case, mortgages and real estate.
Chatbots are already being used on the Chinese chat platform WeChat to facilitate payments for items after confirming this is the item the person wants. Chatbots are also being used to sell products and services to customers. Many sites are using chatbots to assist customers and would-be customers to find information and guide them to the right product for what they say they want. Customers appreciate the assistance when it is accurate, and you are less likely to lose them in the middle of the sales funnel if you can guide them via chatbots to completing the sale. Businesses are also seeing increased return on investment by having chatbots suggest related services identified as valuable to customers per Big Data algorithms, such as suggesting someone apply for mortgage insurance after applying for a mortgage.
Financial institutions see far faster transaction processing when they install a BSM Panini scanner instead of relying on someone manually entering the customer’s information. The error rate goes down since you eliminate manual data entry and your staff can devote those extra seconds instead to verification.
Big data refers to the tools used to mine the masses of data financial institutions are already collecting. Results of these analyses include identifying new and growing customer segments and scientifically proven correlations between one service and another or purchases versus needs. One of the evolving applications of this technology is analyzing customer financial data for “manual” underwriting that lets you better judge the suitability of self-employed applicants for loans with less risk or determining the creditworthiness of people without a credit score because they avoid using credit.
Technologies like Blockchain and the advent of Big Data is set to completely transform the way we do banking from now on. There is no telling what the future has in store, but one thing is for sure, the current trend towards virtual banking is showing no sign of slowing down.