Beyond moving from a traditional to a digital environment, banking has undergone a tremendous digital revolution. Banks and other financial institutions must use a thorough digital transformation strategy to assess, engage with, and service their customers.

The coronavirus outbreak has clarified that banking institutions need to speed up their digital transitions. However, the banking sector needs to modify its business models for front-facing and back-office operations to keep up with the changes and avoid potential upheavals.

True digital banking and a complete transformation are built on implementing the most recent technology, such as blockchain, cloud computing, and IoT.

In terms of customers, a Statics analysis estimates that by 2024, 2.5 billion people will use online banking services. Online banking programs, data encryption software, virtual assistants, KYC system software, website optimization, etc., are a few instances of banking moving into the digital age.

This raises many concerns about digitization in contemporary banks and other commercial institutions.

Understanding client behavior, preferences, and needs is the first step in the fundamental approach to digitalization in banking and fintech. As a result, the banking industry has changed from being product-centric to becoming customer-centric.

According to a survey, the global market for digital banking platforms is anticipated to increase at a CAGR of 11.3% from USD 8.2 billion in 2021 to USD 13.9 billion in 2026. The report states that this growth results from the expanding use of cloud computing in banking institutions and the growing demand among banks to provide the most outstanding client experience.

What Is Digital Transformation In the Banking Sector? 

Due to the digital revolution, banks of all sizes are rushing to implement new technology and services. But what does the term “banking digital transformation” actually mean? The main components of the digital transformation in banking are the transition to providing online and digital services and the many back-end improvements necessary to support this transformation.

The operational and cultural movement toward integrating digital technologies across all bank functions, maximizing operations and customer value delivery, is known as “digital transformation” for banks. If carried out effectively, digital transformation can increase the bank’s capacity to compete in a market that is becoming more saturated.

Examples Of Digital Transformation In Banking 

In terms of their digital transformation plan, banking institutions will profit from putting the following solutions into practice:

• System for detecting fraud.
• Software for Know Your Customer.
• The platform for big data analytics.
• Encryption of Data.
• Software for mining and analyzing big data that is built on microservices.
• Software for modeling and simulation. 
• Solutions for data generation Banks struggle to obtain enough data for machine learning applications, such as developing fraud detection systems, since they don’t share their information with other financial institutions.
• Virtual helpers.
• Internet-based financial services.
• The technology behind blockchain.
• Artificial intelligence use (AI).
• Collection, management, and analysis of customer data.

The Switch To Digital Banking From Traditional Banking

Despite significant obstacles, most banks started their journey toward digital banking years ago with a clear strategy. The trend toward digital banking began when financial leaders discovered that most users were using digital channels.

The banking industry has become more client-inclusive and tech-savvy due to the top-down application of digital strategy. What does the transition from conventional to digital platforms look like as it develops? Let’s review the high points of this trip.

More clients used their mobile applications and websites to complete transactions, making mobile banking a critical component of the transition to digital transformation in banking.

Traditional banks had to adopt new technology and operational models that could keep them informed throughout the client journey to keep up with the rapidly evolving market.

The development and increased demand for blockchain, artificial intelligence (AI), and the Internet of Things (IoT) all simultaneously contributed to accelerating the banking sector’s modernization.

This shift to digital banking has improved efficiency for financial service providers, resulting in growth, convenience, and the chance to attract more potential consumers. This brings us to the subject of our discussion: the essential elements that enable digital transformation in banking and financial services.

Digital Transformation In Investment Banking

Investment banking concerns businesses and large sums of money, which occasionally may result in even more significant losses for a bank or other financial organization. Due to the intricacy of fraud schemes and the fierce competition in the Fintech market, investment banking is bound to fail without clever digital transformation.

Startup Fraud Detection: 

Over 52,420 startups are located in different countries, according to a survey. Banks cannot tell if they are looking at a potential startup that will become a unicorn or another hoax that will vanish as soon as they receive the investment money without using effective fraud detection software.

Due to banking institutions’ investments in their proprietary fraud detection systems, the risk of providing loans to fraudsters has significantly decreased or eliminated. The accuracy of the findings produced by these systems, which incorporate artificial intelligence or machine learning components, depends entirely on the calculation modules’ caliber and software engineering.

Trend Analysis And Modeling:

A high-quality analytical platform can show you projections for the coming years, months, and even decades, giving you a chance to modify your business plan as necessary or demonstrating that you’ve already decided on the best development course and should continue. Monitoring software is essential for all banking industry businesses.

Banking sector conditions are changing due to active digital transformation. Depending on the software you’re using and the supplied data, you can generate various future market modeling scenarios.

Massive Data:

Investment banking companies primarily employ big data for analytics, forecasting, and fraud detection. Big data and machine learning can safeguard your financial institution today by spotting fraud, personalizing offerings for each customer, and enhancing transaction security.

This data also aids in creating and modifying a customer journey map to increase customer happiness and retention. Additionally, this combination helps safeguard your Fintech company in the future by forecasting developments. As a result, you can exercise greater caution when choosing lending institutions, recruiting employees, etc.

Digital Transformation In Retail Banking 

The digital wildfire has not spared the retail banking industry; customer-first banks are already on their revolutionary journey to serve their customers primarily using digital technology. According to a Business Insider study, active digital clients significantly increased in the third quarter of 2019 compared to the same period in 2018.

Human Fraud Detection: 

Whenever a supervisor reviews a loan request, it could take hours or days, and there is no assurance that essential details will be missed, leading to a poor choice for the banking institution. Banks with integrated KYC (Know Your Customer) software, on the other hand, complete the validation process quickly and with decisions of a substantially higher caliber.

Depending on your access to official databases, you can verify a client’s administrative and credit history and improve your loaning and other financial operations. In some circumstances, data extracted from public social media profiles can aid in detecting fraud.

Web Of Entities:

Your digital banking transformation will include integrating the Internet of Things to make customer service procedures as efficient as possible. For instance, a customer tracking system will gather information on how your staff and customers move, process it, and identify areas that require restructuring or change to improve the quality of services.

IoT additionally facilitates the customization of offers and the beginning of profitable collaborations with businesses operating in other sectors. Your IoT system, for instance, can track that a bank client has looked up a particular automobile model and has at least once visited a car showroom.

You can give the customer a personalized offer by advertising, informing them of your “new” car loaning program after the KYC system verifies that this client has a solid past.

Massive Data:

Every day, thousands of customers and their transactions are handled through retail banking. Big Data solutions can help you improve your skills and boost client retention and satisfaction rates. Customers anticipate that their demands, including payments, will be handled immediately. When the system keeps customers waiting for minutes, a poor customer experience causes your clients to move to your competitor’s services.

Primary Drivers Of Digital Banking Transformation

The trend toward digital transformation for banks, which brings financial solutions to customers’ doorsteps, is primarily driven by rising intelligent device usage, growing connectivity, and increasing demand for end-user experience. Six crucial criteria also have a significant role in the success of digital banking in addition to these aspects.

Significance Of Clients:

Why would banks switch to online platforms? Because their consumers are there. The main goal of the digital strategy is to meet the needs and expectations of the target audience. With modern solutions, banks now provide individualized product experiences, seamless query disintegration, transparency, and security at the heart of client happiness. In other words, the change has necessitated adopting a “customer approach,” delivering the highest level of participation.

Leadership Practise:

Customers today require a hybrid experience that combines speed and convenience with a personal connection to the product. For this reason, the changing banking industry uses three different operating models.

• Trade of digital 
• Digital is the newest business sector
• Virtual native 

Futuristic Architecture:

As was already established, successful digital transformation in banking requires more than just contemporary technologies. Due to the supporting infrastructure that makes data accessible to front-end operations, the digital transformation of financial services has improved today. Therefore, modernizing the outdated infrastructure has been critical in advancing the banking industry’s digital transformation.

Impact Of Facts:

Financial and banking firms are aware of the influence of consumer data. More data analytics techniques must be implemented to study and track client trends. This has aided the banking industry in providing more pertinent goods and services in line with consumer demands. This is likely why major fintech companies use development firms to handle data analytics needs.

Digitally Driven Market:

We must recognize how digital skills are advancing the banking industry and every area, including industrial, eCommerce, agribusiness, and IT.

This encompasses the corporate culture, technologies, approaches, and competencies that support the digital transformation process. As a result, one motivating factor for banking’s transformation to digital is that the entire consumer market is on the verge of becoming digital.

Modern Banks Employing Digital Technology 

When digital transformation in banking and financial services was introduced, the banks started by creating a detailed strategy to redesign their operational models, improve consumer offers, and build an end-to-end customer-centric process.

For this process to be successful in producing value for banks and their clients, the banking industry had to adopt digital transformation technology.

The most popular tools and technologies used by the digital banking industry are listed below : 

AI And ML:

Online assistants and chatbots in banking use AI to help customers by delivering the information they need to solve problems. Additionally, artificial intelligence is employed for data management and analysis, data security, and improved customer experience.

For instance, by quickly evaluating customer data, AI can spot repeating trends.

Machine learning is another tool that banks can employ to collect, store, and compare user data in real time. Fraud detection is one of the main benefits of machine learning in the banking industry. With machine learning, it is simpler to identify changes in user behavior and take prompt preventive action.

IoT:

Real-time data analysis made possible by the Internet of Things helps to personalize and tailor the client experience. Thanks to IoT and intelligent connectivity, customers may easily make contactless payments within seconds. Additionally, introducing risk management, authorization procedures (using biometric sensors), and access to several platforms by the Internet of Things has completely changed the economic environment.

Blockchain:

Blockchain is essential to any discussion of digital transformation in banking implementation. The adoption of blockchain in the financial industry has led to safer data transfers, more precision, and improved user interfaces. Modern consumers have a strict faith in blockchain technology and think it has improved the convenience and transparency of banking transactions. One of the most significant developments in digital banking technology has been the integration of blockchain with IoT.

Cloud Technology And APIs:

The most common technology banks and the financial sector use is cloud computing. Improved operations, increased productivity, and immediate product and service delivery are all benefits of cloud-driven services.

Thanks to cloud integration, banks are now more willing to use banking APIs to encourage data sharing and improve the user experience.

Big Data Analytics:

Customers today view banks differently than they did ten years ago. All

Big data technology aids banks in tracking risks, managing feedback, and evaluating customer spending to boost loyalty.

Data analytics tools have opened up new opportunities for banking growth and have quickly satisfied escalating consumer demand.

Advantages Of Digital Transformation In Banking

The following advantages of digital transformation are available to financial institutions:

Enhanced Data Handling Layers Of Security:

Data encryption protects banks from internal and external information leaks to fraudsters and rivals. Most importantly, it makes transactions more secure. 

Shorter Wait Times And Faster Operation:

Customers dislike waiting, especially if they trust your bank with large sums of money. A microservice-based design for extensive data processing systems ensures quick and secure transaction processing.

New Clients Identification:

Customers and businesses need each other’s services. Financial institutions are no longer apathetic about their offerings, making it cheaper and simpler to attract new clients for all industries, not just banks. Thanks to immediate online payment, every client and company may function without hassles.

For Financial Institutions, Improved Evaluation And Risk Management:

You won’t experience issues with fraud schemes if you have effective fraud detection systems. Additionally, multiple-level validation of transactions will prevent any potential errors your customers and employees make.

Possibilities For Prediction:

Your ability to succeed financially depends on your ability to foresee future issues and changes that will affect your market. It will be easier for you to prepare in advance if you have reliable knowledge of various potential events, from minor ructions to a catastrophe in the world economy. By doing so, you can move your company to a different, more promising, and lucrative sector before your rivals and implement winning Fintech solutions ahead of them.

Personalization:

Customers appreciate timely offers that address their needs but detest receiving generic offers they don’t require. Using software with the appropriate analytical, data mining, and processing compounds, you can customize your offerings and make this process automated and secure.

Repetitious Duties Are Automated:

It is mindless and inefficient labor for your staff and business when managers repeatedly extract the same data to create the same reports. This is because you are paying salaries for work that can be done more effectively by a single piece of software in seconds rather than hours or days by human labor.

Innovation And Adaption In Business:

Banks and other businesses now have more ways to connect with their clients because of the rise of social media, e-commerce websites, and mobile banking applications. Due to the banking industry’s digitization, numerous new company developments now depend heavily on financial services.

Adherence:

With the advent of the digital financial management system, compliance has become simpler for banks to maintain. Thanks to advanced capabilities like auto auditing, employees spend less time auditing reports and documents. Digital data supports its standardization and can be flawlessly exchanged across several systems. The cloud-based digital payroll system also provides fast updates so banks can handle changing requirements.

Digital Transformation Tools For Bank 

Businesses that use cutting-edge digital technologies instantly gain a commercial advantage. With digitization, your company gains complete control over front-end and back-end activities from start to finish, as well as consistency and usability. 

What digital tools can you use for your company? Here are a few illustrations:

Mobile Applications:

Businesses can benefit from mobile apps in a variety of ways. One can access their financial information, customized options, bank accessibility, and personal financial management with banking apps. However, this is not exclusive to the banking industry; any business application aids an organization in better understanding and catering to its clients on a personal level. This is perhaps why over 82% of businesses with an online presence use app development services to produce their standalone applications.

Tools For Data Analytics:

The secret to success is getting the most value from the company data. Data analytics products and services might assist you in turning routine data into insightful business information if your company deals with vast amounts of data from numerous sources.

Final Analysis – How Can You Achieve Digital Transformation In The Banking Sector?

Digital transformation in banking, like in most sectors, is costly. Financial institutions must consider this and set aside the necessary resources to ensure successful implementation.

A bank or any other institution can undergo digital transformation in various ways. Although it can be begun internally, an expert is required if you wish to take a comprehensive or sophisticated approach.

The previous year, they taught us that every firm might succeed in a digital environment with a robust digital transformation strategy.

In 5 to 10 years, technology in the financial sector will be unrecognizable. If industry leaders quickly acknowledge and accept this truth, they may move faster to implement technology initiatives that will help them stay competitive and relevant in the digital world. Failure to use technology could cause inefficiency, market share loss, and the inability to compete with peers.

The advantages of digital transformation for banks are numerous. However, the project needs to be well-planned and carried out. Failures in digital transformation can lead to poor data quality, angry customers, and expensive system replacements.

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In a world where businesses are rapidly changing towards total digitalization, considering all the benefits that digitalization offers, security is also a constant threat to security. Digitalized Industries and businesses rely heavily on the security of transactions amongst their clients, customers, and all the other financial stakeholders.

Digital transactions, though very smooth and easy, make them vulnerable to cybercrime and fraud. To address this issue, innovative businesses are advised to be aware of the fast-developing blockchain technology, which promises more security and makes financial transactions smooth and fraud-free. As we see, blockchain technology can act as an immutable ledger of all transactions across many business networks.  It can maintain, track, and record the business’s tangible and intangible assets, making them more secure.

A Blockchain network is designed to be a peer-to-peer network where every device or computer in the business network can act as a node, client, or server. Resources are decentralized in this model, but the user list is maintained in a centralized database, making it difficult to hack the systems and enhance financial security.  Blockchain technology was earlier known to be associated only with cryptocurrency and Bitcoins, but the model seems to be rapidly being improvised to other areas that demand financial security.

How supply chain management can be financially secured using Blockchain?

In industries like the food and pharmaceutical sectors, supply chain management involves several layers of traceability of the products and ingredients. Modern food and pharmaceutical supply chains are far more complex and fragmented. Customers are now as concerned about the product’s safety along the supply chain as the safety of the final deliverable. Traceability along the upward and downward direction at any point of the supply chain becomes crucial for maintaining the quality and safety of the deliverable product. In industries that deal with food supply chain management, a lack of proper traceability along the supply chain results in food contamination and illness in consumers. This can cause severe financial losses for the industry, public mistrust, and ill health among consumers. When used with traceability tools like IoT and Radio Frequency Identification(RFID), blockchain technology makes traceability in complex FSC networks secure and safe to a very large extent. ‘Smart contracts’ can be generated, and blockchain networks can help the consumers trace backward from any point in the chain to even the input stages of the chain in a safe, secure manner. A case study of the benefits of blockchain by “ Taylor and Francis” enabled dairy supply chain management shows the financial security that can be attained through this technology.

Blockchain technology in the stock market

The concepts of immutability, anonymity, traceability, and security are the main factors driving stock markets worldwide to adapt to blockchain networks. Blockchain networks in stock markets can trace securities lending and accurately monitor system risk, enhancing financial security. The IGIGLOBAL abstract illustrates the advantages of blockchain technology in the stock market.

The birth of cryptocurrency through Blockchain

Blockchain technology saw the birth and nurturing of cryptocurrency (completely digital currency). The main product of this is the advent of Bitcoin. Some financial analysts today vouch that ‘ paper currency’ and monetary transactions through physical currency, as it is now in the world, are in their last stages. Since every financial transaction worldwide is increasingly digitalized, cryptocurrency will only be the currency used for day-to-day transactions shortly. This, though it is a still budding possibility, is making academicians and industrial analysts delve more into blockchain development as it promises financial security with all its other advantages.

According to the twenty-ninth international conference on AI, Phishing is possible in cryptocurrency transactions using Ethereum. Hence, blockchain networks should be enhanced with better algorithms that can arrest phishing. This will enhance the financial security of cryptos going forward.

Conclusion

Blockchain-enabled networks will reduce cost, instill customer satisfaction, increase audibility, improve communication, guarantee data interoperability, and enhance financial security. Blockchain technology is still in its infancy, and technological innovation in this domain is happening rapidly. Blockchain will be the future for many areas like cryptocurrency, accounting and auditing, health care e-commerce, energy, advanced blockchain network algorithms, IoT, and  Deep Learning Tools to ensure financial security.

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The Internet of Things (IoT) is a method of collecting and analyzing data. Along with many other industries like manufacturing, insurance, retail, and even agriculture, IoT in banking generates much interest.

The banking sector uses IoT to improve customer service, security, and management. IoT also helps automate many services and helps improve peer-to-peer transactions.

IoT is helping to streamline many aspects of the fintech industry. Banks use the IoT ecosystem to gather relevant data to leverage for different banking processes. In this article, you will find what those processes are and how IoT is affecting them.

A Brief Overview Of IoT

The Internet of Things is the idea of gathering and processing large quantities of data from various sources. The automatic gathering process can provide real-time feedback about everything on the IoT network.

Many industries have started using this technology to improve their operational efficiency. IoT technology can give accurate insight into underlying issues that people often overlook. It helps reduce labor costs and enhances customer service. As things stand, IoT will become a mandatory tool in every industry.

Advantages Of Using IoT In Banking

There are many advanced applications of IoT in banking and fintech. It has great potential to make more enhanced systems, but it’s sticking to the basics for now. Most IoT applications are very common and familiar to most people. Here are some examples:

1. Real-time Feedback

IoT devices can gather intel from a bank’s user activity. Such data can help the management team understand the financial needs of different clients.

A smart IoT system can automatically send useful notifications. For example, the IoT network can notify the client when their balance is about to run out. The process can work automatically without human assistance.

2. Identifying Fraudulent Activity

Fraudulent activities are very common in the banking scene, and they have increased significantly in the past decade. IoT in banking is a way to combat such fraud.

The biometric system can help reduce the scope of fraudulent activities to a large extent. However, some cases tend to slip through the gaps in the system. IoT management helps make clients aware of potential issues by sending notifications every time they make a transaction.

The user can flag a transaction as fraud, which will freeze their account until further action. That kind of fast action is only possible because of the real-time communication in the automated IoT system.

3. Customer Service

Customer service is one of the primary usage cases of IoT technology. IoT gathers user data and monitors users’ various digital habits. That information is immensely valuable for customer service. Banks can use that information to provide personalized customer service to their clients.

It will act as a record of the client and their financial requirements. The banks can use that to suggest budget plans and other related things.

4. Data Analytics

IoT’s most important contribution to any industry is improving analytical capacity. IoT is all about data. An IoT network can gather a mind-bogglingly high volume of data. Special automated software then processes the data and produces useful information for the industry.

Banks can use it to gather information on their clients. That is very helpful in the case of loans. Like the real estate industry, banks can use an IoT network to monitor the economic activity of potential load applicants.

IoT can also view trading data from various banking sources. The trading volume of private and government-issued bonds helps banks make better management-related decisions.

At [x]cube LABS, we leverage this data to create great customer journeys for better retention and engagement. This has helped many of our customers increase feature adoption and achieve increased loyalty for their businesses.

5. Improved Security

Security is the most crucial aspect of the banking sector. It’s almost entirely built around people’s trust in a bank’s ability to keep their assets safe. IoT technology can improve the fundamental infrastructure of a bank’s security system.

For example, IoT technology can use any device to gather data. The only prerequisite is that the device must be able to send and receive network transmissions. The CCTV, Smart alarms, and other monitoring devices are perfect sources for gathering data.

Connecting all these monitoring devices to an IoT network will help with real-time monitoring. The machines used for the transaction can also be implemented with IoT. An IoT network will also make locking down the system in the case of a security breach easier.

6. Smart Wallets

In the past decade, many wearables have been invented that can make payments. Fitness trackers, smart watches, wristbands, and jewelry have smart features. They can let you access your credit card or checking accounts from anywhere.

These devices can work fine on their own. But they won’t offer you any personalized features. The use of IoT is very prevalent in these devices. They collect data and make adjustments to certain features based on your habits. These devices can help you complete transactions faster with the help of IoT in banking.

7. Automation

Automated systems can dramatically improve productivity in the banking industry. Banks can leverage the IoT system to create automated systems to automate daily functions. 

IoT systems can also make smart gadgets more effective. The IoT infrastructure is also the backbone of self-checkout systems.

Challenges Of IoT In The Banking Sector

There are still several issues with IoT technology in any field. Here are some examples of the primary problems with the IoT network:

1. Security Issue

IoT systems offer increased protection on the client side, but it’s a different story for banks. The concept of IoT is relatively new, and there are no set standards yet. However, the most basic aspect is using many devices to gather data. 

Skilled hackers can exploit the fragile security of connected devices to harm the IoT network. They may not steal confidential information, but they can make the system give wrong feedback.

This list of devices is very broad. It can be humans with various gadgets, smart security cameras, ATM booths, etc. The problem with this system is that it’s impossible to secure all these devices with the same level of security. People can easily tamper with the feedback devices and give false data to the IoT network.

2. Redundancy 

IoT produces a lot of data, a lot with a capital L. An industry as large and active as the banking industry will undoubtedly share this quality. 

The thing about data gathered through such means is that 90% of it is useless. Most of the data won’t give any beneficial information to the banks. So, it will take a lot of data processing to glean the useful bits.

3. Problem With Homogeneity 

IoT technology is still relatively new. There are no international standards for homogenous system interface and compatibility. 

That makes it very hard to link devices from different manufacturers into the same IoT network.

Conclusion

The finance industry is going through a technological upheaval. Much new technology is being tested and added to the industry regularly. While some of that tech receives widespread recognition, some don’t quite make it. 

But it seems IoT in banking is one of the few that can have a large enough impact to change the dynamic of things.

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Table of contents

• What is Mobile Banking?
• Using Biometrics in Mobile Banking
• Chatbots
• Adoption of Big Data to Prevent Frauds
• Blockchain
• Legacy Banks and the Digitization Surge
• Conclusion

Innovation is the law of tomorrow. Disruption has occurred in all industries and is also transforming the financial sector. Banks, which maintained their predominant position due to highly regulated environments, are witnessing the emergence of new competitors that jeopardize stealing a substantial market share.

Perhaps the most astonishing and worrying phenomenon for traditional banking is that these new financial competitors are innovating and expanding.

Transferring Cash from one account to another with a tap of a button and depositing a cheque by clicking just a picture of it are two of the standard mobile banking features banks provide customers. Before we dive further in, let us understand,

What is Mobile Banking?

Financial organizations are taking cues to adopt more sophisticated technologies like big data, blockchain, and machine learning end-products to retain customers. Most competitive banks offer mobile banking to complete financial transactions via smartphone or tablet. To meet the growing market needs of digitally-savvy millennials and Gen Zers, digital and legacy banks will continue to adapt to mobile banking market trends to stay relevant. According to a study, The global mobile banking industry will reach $1,824.7 million by 2026.

Alt Tag for Image 1- Digital Banking Solutions

Let us understand the Trends of Mobile Banking in 2022

Using Biometrics in Mobile Banking

A robust mobile banking infrastructure rides on the wave of the highest forms of digital security, and using biometric technology has only quickened the pace of this. Embracing critical points of biometric identification systems like facial recognition, voice recognition, fingerprint scans, and iris scans are becoming the go-to security standards globally.

Biometrics will replace PINs completely and render them obsolete shortly. Research states that 56% of consumers trust biometric techniques to authenticate transactions, and the expected market size will reach $24.59 billion by 2023. It would be fair to say that biometric technology will be the next significant thing to be embraced across all verticals of the financial landscape.

Chatbots

Chatbots are conversational AI-powered methods that have become a benchmark model in the banking sector. Three significant requirements are needed for adopting chatbots –

• the need for speed.
• The need for data.
• The need for personalization.

By delving into personalized consumer data and conversations that help solve their pain points, the financial industry uses chatbots to boost operational efficiencies and deliver a holistic customer experience.

• Chatbots will reduce business costs by $8 billion by 2022.
• 75-chatbots will handle 90% of healthcare and banking queries.

Sectors that manage vast volumes of human interaction, like banking, are deploying chatbots into their products. This is greatly decreasing dependency on physical customer service teams and forwarding queries to chat agents.

Adoption of Big Data to Prevent Frauds

Big Data has contributed tremendously towards allowing banks and other financial institutions to collate customer-centric data from traditional and digital sources and provide a personalized banking experience.

Other than this, another critical use case of big data is stopping fraudulent activities using AI-based algorithms. Furthermore, by identifying their customers’ transaction patterns and banking history, important information assists banks in pointing out deviations and detecting suspicious activities.

For example, we can immediately freeze a customer’s credit card if transactions occur simultaneously in separate parts of one country.

A card provider can predict general trends with big data by analyzing customers’ information and identifying fraudulent behavior before the card or account is compromised.

Blockchain

Mobile banking can succeed on the idea of the absence of physical branches altogether and adopting a cloud-based system of banking experience that will do all the work. 

Blockchain has been around for a while now, and the financial sector is keen on adopting it to improve its speed, efficiency, accuracy, and security. The adoption of blockchain has helped this by diverting the focus from digital-only banking. The Financial Industry is trying to experiment with blockchain by replicating existing asset transactions on the blockchain. While this allows for the efficiency of a blockchain solution, what gets missed out is the ecosystem implications of a blockchain solution.

In infrastructure terms, a blockchain is open-source software built to support the real-time transfer of digital assets amongst market participants. Using any selected blockchain’s APIs, we can see a surprising reduction in asset transfer costs and timelines. Most bank implementations today are focused on the same aspect. However, while scaling proof of this concept into a real-world scenario, financial institutions implement the same application layer with all the current checks and balances.

The pandemic hit the reset button for the industry. Swathes of statistics emphasize the success gained and the ground covered by industry entrants during the last decade. Before 2020, incumbent banks were somewhat away from new, more agile competitors.

• According to PWC, The global challenger bank market was worth 18.6 billion dollars and will grow to 394.6 billion by 2026.

Legacy Banks and the Digitization Surge

Legacy banks and their ilk have taken a massive hit since the pandemic’s beginning. Reports suggest that customers are more risk-averse during difficult times. Even though traditional banks are not skyrocketing in terms of gaining trust from end consumers, they are preferred and stable choices for more than a few.

It is a given that the legacy banks should have been on the frontline of a digital revolution. Still, the impact of COVID-19 demanded more digital banking services and bandwidth than ever before. However, customers stuck with the traditional industry players rather than flocking to new digital-only banks during the pandemic.

Despite this sudden surge, traditional banks may not have progressed in market demand. A deeper look at some figures around the current state of legacy banks’ digital transformations makes for a somewhat grim reading.

• Approximately 40 percent of banks who state they’re more than halfway through their digital transformation strategies haven’t deployed cloud computing or APIs
• Only a quarter of these banks have implemented chatbot technology.
• Just 14 percent have deployed machine learning tools.

It may seem that legacy banks have not made as many inroads into the digital future as they need to compare to progressive digital players. Legacy banks will have to change this because customer expectations are becoming increasingly digital-focused, reflected in their banking attitude.

A report by EY states that many customers say that their banking practices varied over the long term because of COVID-19.

Lack of progress is an evident lack of awareness from some banks where they must be on the digital roadmap. According to the Cornerstone Advisors study that cites the developments above, over a third of banks believe they’re more than halfway through their digital transformation.

Conclusion

Legacy banks have made many digital strides during the pandemic, edging closer towards digitization. Suddenly, they no longer play catchup and face imminent disintermediation. However, the job is not done here; one could even argue that the job will not be done because of the ever-evolving digital technology; instead, digital transformation is constantly changing and adapting. For now, traditional banks can reflect on how far they’ve come since the pandemic’s beginning and pause on what could be regarded as a sector reset.

But it’s an action that should be taken quickly. Any complacency will quickly see legacy banks lose ground to a new wave of resurgent digital players.

Technologies will continue to evolve, existing challenger banks will regroup, and new ones to challenge the current status quo.

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• Introduction
• Artificial Intelligence (AI):
• Blockchain Technology
• RPA
• Big Data Analytics
• Conclusion

Introduction

A well-operating financial system drives a well-functioning economy. Technology is one of the most powerful driving forces for the current economy and the modern economic systems. Banks have grown from being a safe place for keeping valuables to a one-stop solution for all transactional operations. Today, the (BFSI) Banking, Financial Services, and Insurance industries operate on smart devices, making online transactions the new norm. As we move more in-depth into the digital age, we can anticipate seeing technology-driven, more groundbreaking, innovative digital transformations in banking with strategic solutions.

The COVID-19 pandemic was an arm-twisting of unprecedented proportions for banks, placing their technology architecture, strategy, and workforces under tremendous pressure. For most, the crisis was a sobering affair that dispelled all illusions about how far they had progressed regarding digital transformations and cloud migrations. According to research, 62% of customers consider more comfortable and more secured banking one of the best technological developments of the decade, and 56% of the banks are now considering digital disruption as the crux of their strategy.

Yet, silver linings could be found in how fast banks could acclimate to a new reality amidst many pandemic challenges. Most of them quickly rebuilt their business with a digital core that supports a more adaptable workforce and a more useful agile operating model with ever-changing customer needs, making the future of banking more secure.

Technological advancements and changing customer expectations continually drive the financial service industry to innovate and accustom. Technology is aiding the financial sector in filling the gap between conventional and revolutionary banking systems by improving customer experience, operational efficiency, and data security. The digital approach is applied to payments, retail banking, finance management, insurance, commercial banking, and finances management. 

Banks with a clear-sighted perspective persist in expediting their digital transformations, reimagining their people and data to their architectures and ecosystems. New banking competition is dawning where architecture is given the topmost priority, and leaders are also deciding on the ingenuity of their technology choices.

The popularity of FINTECH has made banks exclusively automate their processes; New banks are launching NEO banks that are launched digitally without Physical branches. Numerous Technology Trends have emerged and have sped their way into every bank’s system.

Want to know what the Top 5 Future technology trends are shaping the future of digital banking? Have a look:

Artificial Intelligence (AI):

Artificial Intelligence, or AI, is now developing as a part of the business environment and is reinventing the whole BFSI ecosystem by enhancing automation and dynamic systems. AI supports decision-making, enhances customer service with virtual assistants, and improves operational efficiency. Also, advanced machine learning algorithms help process data quickly, thus helping in compliance management, profile credit risk, and detecting fraud even before it happens. AI and machine learning saves time by personalizing client experience, crunching reams of data,  and increasing revenue growth. A recent study states that machines will perform 10 to 25% of all banking functions across all banks in the next few years. A large group of consumers assume that the gap-fill in the financial market is by applying self-serving technology platforms that help customers conduct all their banking operations remotely. A study by McKinsey states that the value of AI and ML could be worth as much as USD 1 trillion annually.

Blockchain Technology:

Blockchain, an emerging technology trend, is already creating transformation ripples in the BFSI sector. According to the global bank Santander, Blockchain-based systems will enable banks to save US$15-20 billion by 2022. 

The Reserve Bank of India(RBI) believes Blockchain technology holds enormous potential for disrupting the banking and financial markets. Organizations across the globe are already establishing blockchain in a wide variety of banking and investment applications, like solving challenges met by investment banks to assist customers in making safer payment transactions. According to a report by MarketWatch, the investment of blockchain in the (BFSI) banking and financial sector will reach $17.47 billion by the end of 2025.

RPA:

With Robotic Process Automation (RPA), the banking industry demands intelligent automation to drive efficiency, remove repetitions, and improve customer satisfaction by providing fast and efficient services. Robotic Process Automation (RPA) mimics human actions to extract more data and navigate digital systems, and this level of automation is invaluable to the BFSI sector as it automates workflow, reduces errors, and speeds up digital transformation. RPA has diverse functions and can streamline customer service and operations across various industries from end to end. A report by KPMG states that RPM could preserve financial associations as much as 75% in cost savings.

CyberSecurity:

Cyber threats can emerge from anywhere at any time; the most dangerous part about cyber risks is their ever-changing and evolving nature. 69% of CEOs from various financial institutions reported in a PwC survey that they are highly concerned about cyber threats. Also, 65% of the companies said that they  adopted cloud-based security measures in their organization as  

Cyber risks demand a proactive approach as part of BFSI enterprises. They need first to assess, evaluate, and understand the present security status of their organization and identify their cyber-risk appetite. They should develop a cybersecurity roadmap that will help them gauge the vulnerable areas and seal those gaps early. This is why organizations should hire and train cybersecurity teams to mitigate threats and vulnerabilities effectively in advance. An IBM report estimated that the cost of a data breach in the financial sector was US$5.85 million in 2020.

Big Data Analytics:

Big data in finance has led to meaningful technological innovations. Financial firms can deliver personalized customer recommendations, create more efficient processes to strengthen security, provide better customer service, and drive competitive advantage. They can identify revenue opportunities by analyzing customers’ spending patterns, financial situations, credit information, and social media activities.  

A recent study states that 71% of banking and financial firms utilize big data analytics to gain a competitive advantage over their peers. Big Data improves trust equity by assuring cyber security measures and managing voluminous and unstructured data. Predictive analytics enable institutions to deliver customers personalized insights into their investments.

Conclusion

Banking and other financial sectors have been more advanced in their digital transformation processes than any other industry, and future technology trends transforming the banking industry into a business offer plenty of advantages to satisfy customer needs. Forward-thinking banks are embracing these thrilling new technologies to decrease costs, become efficient, and boost customer satisfaction, assuring a place in the digital future. Thus, adopting and enforcing these technology trends will accelerate the digital transformation in the banking industry.

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Table of contents

• Industry Overview
• Blockchain in Data Protection
• Blockchain in Finance
• Conclusion

Industry Overview

Centuries old, the finance industry has probably  seen the most number of major shifts in strategy and positioning among all. This industry which monitors money and credits of the market has found its edge over centuries of transformation. With its new customised variety of products and services, the industry has moved more towards customer centricity. The big financial institutions in play are now more focussed on what customers need and require. They manage money for individuals and invest for them on other people or institutions. It comprises commercial and investment banks, insurance companies, hedge funds, credit-card companies, consumer finance firms, accounting agencies, and brokerage firms.

The first digitization of Financing products happened when William Porter developed “Trade Plus”, an electronic trading platform which is now known as the “E Trade”, a subsidiary of Morgan Stanley. After the introduction of Trade Plus, the finance industry has come a long way. They facilitate setting and operating of big and small companies by handling the financial strength of these firms because of which it has become one of the top grossing industries. The industry has also seen some dark periods, one of the latest one is the Black Monday (19 October, 1987) which happened when NYSE faced its biggest one day loss in history which is nearly 26% of its value as per Carrerizma.

Blockchain in Data Protection

Blockchain technology is bringing wonders to the data protection industry in recent years and is getting adopted by almost every data concentrated industry to play its part in data protection. The technology distributes its storage and data over a wide network chain and gives access to various owners which makes it hard to tamper. From Bitcoin to personal data, blockchain is spreading its wings either by public blockchains with public key or private blockchains for private institutions. It is considered as one of the most secure data protection technologies of all time. The industry is expected to reach $20 Billion by 2024 in industries such as healthcare, BFSI, sports & more as per Towards Data Science. It is making the firms more independent and helps in maintaining their competitive edge over the market. It offers encryption & validation, secures data storage and is unfeasible to attack.

Blockchain in Finance

The finance industry like any other industry is investing a hefty sum of money on R&D to get in front of the line of the technological revolution. Security breaches is one of them where these institutions are trying more to concentrate to make their data safe. This industry has always been the first mover to adopt any latest technology which can help with their operations. That where the blockchain technology comes in between which distributes the ledger accordingly to make it impenetrable. The technology has its own benefits over the industry such as faster transactions, minimized credit risk, eliminating collateral costs and  enhanced transparency. It also decentralizes the data which spreads its ownership over the network and makes these owners aware once any data tempered. Each block of this data chain is protected by cryptography which are represented by their public address.

One of the real life examples with the application of blockchain technology is with the banking industry. Loan recoverability is one issue that is at the forefront for these institutions and blockchain here can make it trackable for them. Every transaction can be stored in the blocks from start to end with which banks can easily trace the diversion in the loaned funds. Another example is with the payments. Domestic payments have developed in recent years but international payments still take days to figure out and to make every movement recorded is a whole new job. That’s where blockchain comes in place and eliminates the hectic job by reducing the time and cost and makes it more efficient.

Conclusion

With a wide variety of use of blockchain technology, every industry whether its healthcare or entertainment industry are opting for this. For securing data sources, this technology is challenging the traditional approaches on every level. As it’s time to move forward with the digital revolution, this technology can help in maintaining the relationship between the technology and user data & privacy. It can help in tackling data management and can give more concentration on privacy. It reduces delays & conflicts in transaction and can provide the actual data in real time. About 77% of the Fintech firms are expected to adopt the blockchain technology as per Financial Express shows the future scalability of this technology. Blockchain can work as a bridge for traditional institutions with technological gaps they have from a new business model and can bring them all on one platform.

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Table of contents

1. What is a black swan event and why shall we care?
2. Impact on different industries
   • Healthcare
   • Retail
   • Manufacturing
   • Banking
3. Conclusion

“Not since the attacks of Sept. 11, 2001, has a crisis enveloped so much of the economy so quickly”; quoted the New York Times in an article on the costs of Coronavirus to businesses and workers.

So will the Coronavirus be a black swan event, or is this a wake-up call for various industries and a reminder for everyone to be prepared for what may come in the future?

So what is a black swan event and why shall we care?

Basically, black swans like the September 11th attacks are rare events that no one could have predicted which dramatically alter the course of history, society, and economies.

Coronavirus is shaking up businesses and consumer behavior on a massive scale. While the public and private sectors are taking action to minimize the spread of the virus and the complete economic consequences are yet unclear, we know that the measures being taken to contain the virus have had a deep impact on certain industries and call for change.

Here are the ways we think the deadly Coronavirus is set to impact Healthcare, Retail, Manufacturing and Banking, and what opportunities they hold to tackle it.

1. Healthcare

One of the top pieces of advice to inhibit the spread of Coronavirus being passed along to the public by health organizations is to limit time spent in public settings.

This provides an opportunity for Telemedicine providers to step up. Virtual Consultations with doctors in lieu of non urgent situations can minimize the need to step out. Doctors not involved in Coronavirus treatment can consult their patients remotely from home or office.

With more people being steered toward virtual care, telemedicine providers are seeing substantial upticks in use.

PlushCare, a digital healthcare firm has witnessed a 40% bump in appointment volume since December—a month before the first case was reported in the US. For context, the company reports seeing a 10% increase in volume during flu season generally.

Now we can expect that a majority of users who hadn’t tried virtual healthcare earlier would rely on such means even after the Coronavirus outbreak is contained in the future.

On the other hand, AI-powered remote monitoring tools are granting clinicians the ability to keep track of patients’ health remotely in real time.

Social distancing has prompted the increase in need for Remote Patient Monitoring systems (RPM).

Similar to telemedicine, the necessity to start implementing these solutions now could pave the way for increased adoption among healthcare pros and their patients moving forward.

2. Retail

Brands like Nike, Lululemon, Apple, Lush, Urban Outfitters, Under Armour and Patagonia have recently announced the temporary closure of their stores across various geographical locations for a period of about 2 weeks to contain the spread of the virus and in light of employee safety. While food retail which remains a necessity is experiencing a boom in demand with consumers ‘panic buying’ under the state of quarantine or after being suggested by their governments to stay indoors.

The crisis has changed what an average grocery basket looks like. The supply chain is struggling to keep up. To restore the balance, we believe food retailers must simultaneously manage their commercial calendars and supply chains.

This is the right time for retailers to focus on transforming their business model and make it tech enabled and future proof.

4 key areas to focus on right now:-

1. Smart Stores. Make your stores smarter to reduce congestion and enable contactless cash transactions. WHO has suggested consumers and retailers to opt for digital payments and make the process contactless. This can also reduce waiting times and enable faster checkout. This way customers won’t have to wait in lines and avoid staying in a congested area. Employ IoT to track inventory and on-shelf availability and automate replenishment so that customers won’t face a shortage of supply.Use of such smart technology can make your customers have faith in you to serve them at times like these.
2. Supply chain. It is crucial to keep up with your supply chain at times like these. Employ technology like IoT to track inventory using smart tags and sensors which can automatically monitor changes in the inventory and enable efficient stocking. IoT allows you to track transport and delivery of products which in turn result in more accurate logistics.You can keep track of inventory levels in real time and make sure that the most popular products are always available in stock. Smart tags can also help employees track the exact location of items in a warehouse or store.Adopt Machine Learning to forecast demand and make sure you are prepared in the future, because the impact is going to last for a while.
3. E-commerce. Customers are now looking to shop from online portals and avoid visiting stores. Leverage mobile applications and offer a seamless service to your consumers.Proactively shift spending to an online channel, in a model that serves your customers better in the long term. Actively engage your customers on this platform and suggest appropriate products based on data from their previous purchases to make it easier for them to shop.Set-up a smart delivery network that provides real time information to customers and ensures timely delivery.Enable secure and multiple modes of online payment to ease the experience.For instance when Panini, a celebrated name among enthusiasts of published collectibles, magazines, and books approached us to discuss digital strategy, we quickly recommended a transition from brick and mortar to digital stores. The change brought about a remarkable increase in the number of paid users and average revenue per paid user. Read all about it here.
4. Head office. Transform your head office into a flexible, remote-working team supported by IoT and cloud based applications that let them function remotely without discrepancies.Also ensure proper security measures to tackle the cybersecurity issues that arise due to remote working.With large workforces suddenly finding themselves coordinating on work from home, business leaders must figure out the best practices to ensure employee morale and productivity stays high. So here’s a Comprehensive Guide to Remote Working During Covid-19 Pandemic to get you started and keep teams engaged, motivated and focused in these trying times.

3. Manufacturing

The manufacturing industry has taken a significant hit due to the coronavirus outbreak. Many large companies that are dependent on or have manufacturing units in China are the most vulnerable as their activity has fallen and will continue to remain so for the upcoming months.

Some manufacturers have already had to throttle back production in their plants outside of China, and the list gets longer by the day. For example, Fiat Chrysler Automobiles NV announced on February 14 that “it is temporarily halting production at a car factory in Serbia because it can’t get parts from China.” Similarly, Hyundai said that it “decided to suspend its production lines from operating at its plants in Korea … due to disruptions in the supply of parts resulting from the coronavirus outbreak in China.”

To counter such problems, it’s high time companies consider sourcing from multiple regions.

From a technological standpoint, companies should consider automation in the earlier stages of the supply chain and as well as at assembly stages which could reduce their dependence on intensive labor.

Companies should apply robust digital-twin and scenario-based modeling to assess changing operating conditions in real time and also proactively assess various disruption scenarios.

Inventory needs to be monitored through a detailed digital supply-chain mapping, including components and sources. Companies should differentiate how they hold inventory, using a multi-echelon optimization approach to prevent shortages.

4. Banking

Customers will now shift to online channels when it comes to banking as well.

Banks should encourage and support customers to use digital and other virtual channels, wherever possible. To encourage customers to use existing remote channels and digital products, institutions can launch positive and safety-oriented messaging aimed at reducing reliance on branches for services that are digitally available while also providing tutorials online and by phone and increasing remote support options.

Banks that have already established online platforms and enable the performing of various banking operations through apps/ websites or over call centers will greatly benefit in these times.

Beyond whether or not customers can carry out banking functions through alternative channels, greater usage will test how easy to use those channels are, especially for first-time users whose usage is a direct result of coronavirus concerns.

Banks can use this opportunity to effectively educate their customers on how to use these banking services online and continue this in the future.

Conclusion

Hopefully, the Coronavirus will remain less deadly than the common flu, but it should still serve as an eyeopener for changes we need to make now before we experience an even deadlier outbreak.

The effects from COVID-19 over the coming months are tremendously uncertain. The first priority must be to keep your people safe. Then, by understanding the scenarios and taking the appropriate actions, companies can build resiliency against the short-term shocks and lay the foundation for a strong recovery.

Taking lessons from this event, we believe that companies across the globe will have to come back stronger equipped with groundbreaking digital technologies that enable them to tackle such events in the future. What do you think?

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It has come to no surprise that digitization has created a massive disruption in all industries. Customers are now more digitally focused so they expect more exceptional services across all platforms. Similarly, financial service providers are also looking out for more from all the channels they use for banking transactions. To keep up with the emerging customer expectations, banks have picked up omnichannel banking approach to develop a seamless process in order to meet their demands.

According to MIT Sloan Management Review, “we found that companies that had 50 percent or more of their revenues from digital ecosystems and understood their end customers better than their average competitors had 32 percent higher revenue growth and 27 percent higher profit margins than their industry averages.”

As omnichannel strategy has offered huge opportunities for bankers it is essential to build strategies that will enhance their service level as well as optimize their costs effectively. Identify customer preferred channel and the potential of banking technology and find a way to connect it to the omnichannel world.

What Is Omnichannel Banking?

Today emerging technologies have empowered customers to research and shop from multiple channels. This has compelled all the banking industries to adopt omnichannel approach so that they can supervise their customer’s journey while ensuring a seamless process from one channel to the other.

Omnichannel banking enables bankers and other financial service providers to provide secure banking services at all times and from anywhere. Customers keep shifting from one channel to the other. Therefore, banks are required to merge both physical and digital channels in order to have a grip on customer’s full history and offer multiple benefits to the customers like, mobile banking, online account opening, online loan applications, remote deposit, digital payment options, easy account management, and so much more.

According to PwC’s  banking 2020 survey, “a growing awareness to develop a more customer-centric business model, but a significant gap in preparedness remains. 61% of bank executives say that a customer-centric model is very important. 75% of banks are making investments in this area and only 17% feel very prepared.”

Omnichannel Challenges

• As per the PwC’s survey, only a few percentage of bankers are fully prepared for omnichannel banking and rest are still in the process to adopt this approach. Most of the banks, however, are well ordered around products. They first interpret the product and wrap up with some particular capabilities and then the channels estimate the most ways to sell the product. But when it comes to customers, it is very important for banking organizations to segment their customers based on their behaviors not with products or channels.
• Maximum time most of the bankers are unwilling to handover Profit and Loss (P&L) responsibility in the hands of their customer segment owners as it may usher to a huge entanglement in the organization.
• Most of the time banks fail to communicate or deliver on present-day customer needs because they are not trained on how to sell products designed by the product owners and plus they don’t get paid.
• Growing technologies have given customers the power to demand personalized services at a lower cost. This leads to a challenge for all the bankers to keep up with such unmanageable product development processes and expeditiously respond to the situations change.

Omnichannel Key Features

• From transaction process to optimize customer interaction : McKinsey reports that 65% of consumers interact with their bank through multiple channels. Omnichannel has helped banking industries to shift their focus and funds to optimize their customers’ experience. The omnichannel strategy helped them understand how customer interactions can bring real value to their channels. It also helped banking organizations to simplify the process wherein the banking leader can put up more precise points in front of their customers and provide product or services as per their demand, therefore meeting their expectations and boosting customer experience.
• Became more customer-centric: Where the 61% of bankers say it is very important for a bank to focus more on the customer-centric model, most of the banking industries have shifted their priorities. Earlier traditional branches used to have a personal relationship with an individual, where branch managers used to play a key role in understanding customer’s concerns and helping them with solutions. Now with so many technologies coming up, banking customers are now able to access their bank account from anywhere which is replacing the need to have a human interaction representing the bank. The omnichannel strategy has empowered bankers to provide unique and 24/7 customer experience which is leaving the traditional banking process far behind.
• Big Data Connectivity: Proper use of customer data also needs to be on the bank’s priority strategy list as they adopt digitization. In this digital era, data allows all the organizations to have clear insights on what they are doing well and what services need to be improved. There are billions of customer data stored in the bank’s database and collecting this data is the only job. To manage or successfully run an omnichannel approach in a banking industry, the bank needs to be really fast in acquiring the data and delivering it into the hands who require it. According to the Financial Brand, “60 percent of financial institutions in North America believe that big data analytics offers a significant competitive advantage and 90 percent think that successful big data initiatives will define the winners in the future.”Jim Marous is co-publisher of The Financial Brand said, “building a positive omnichannel experience remains a work in progress for most banks and credit unions. Research shows that when done well, an omnichannel experience can strengthen relationships, streamline the experience and increase profitability. Unfortunately, most banks and many customers haven’t completely bought in.”While digital has become the main source of customers’ interactions in banking industries, it has a huge impact on their behavior and exceeding expectations. It is an opportunity for the banking industries to provide a bottom line upshot by driving meaningful insights into customers’ channel preferences. Omnichannel empowers banking industries to have a sophisticated, more efficient and more pleasing customer experience.

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The Internet of Things (IoT) is a way where billions of devices are connected to communicate, share information, anticipate needs, solve problems and improve efficiency. As per Gartner forecast, there will be 25 billion IoT devices in operation by 2020.

IoT has changed the way banking services were done by connecting infrastructure and influence the way they interact with the service world. Since these industries deal with huge data transfer, gathering and analyzing of data, IoT has a huge impact, that is benefiting both the customer and the financial services as a whole. Here are five benefits of Internet of Things in Financial Services world.

1. IoT benefiting Insurance industry

Connecting almost all types of devices IoT has made its huge impact on the insurance industry and will have its involvement over the next five years, through telematics data for vehicle insurance, health insurance and so on. This helps the insurers to capture the customer data effortlessly, improve business practices, cost cuts, which will add significant value and increase revenue opportunity by better evaluating client’s risk.

For example: automobile insurance, some company offers their clients UBI (usage-based insurance) that tracks the driving habits of the clients by using sensor devices, connected to their car to monitor driving, of course with their permission and with that data insurance company offers discounts or other facilities for healthy and safe behavior.

2. IoT benefiting banking industry

Banks have to deal with big data and analytics everyday and they have to monitor all the transactions to avoid any fraudulent practices. IoT helps in making the information readily available and also consumable by other system and networks. A customer using their bank mobile app has an option to take a picture of  any required documents and upload it using their smartphone, which will increase the productivity, boost efficiency and drive fundamental improvements in customer experiences.

Bank gives home loan to all qualified people. Banks using IoT technology give the option to their borrower to install a sensor in their new house with their permission, wherein they agree to automatically issue a home improvement loan when there is any damage and requires repairs. The sensors in the wall prevent large scale damage and benefits loan borrowers with discounted rates, with no additional paperwork and later at any point of time they can drop out from this agreement.

3. IoT benefiting Credit card company

Reliable in-store connectivity provides valuable customer information to financial services and using beacons – Bluetooth low energy technology, credit card company can send a notification to the targeted customer regarding their credit qualification, by tracking their location, a new way to target market that includes specific advertisements and notifications. Due to the rise of IoT in financial services, it offers personalized and reliable services to their customers with the information, which are being captured and shared within the context. IoT soon going to accelerate in how financial services interact with the customers and allows them to meet customer’s needs with relevant content.

4. Customer Relationship Management

Financial services are investing more in reliable connectivity solutions to grow their business and to give their customer best experience by providing excellent services and products. All this can be managed by the cloud-based applications, where financial services store their customers data, using customer relationship management (CRM) software. IT is a powerful tool to utilize content management systems (CMS) and organize documents in the cloud, with the reliable connectivity and solid security. Which will improve business operations and strengthen client relationships, which will be benefited and judged by the end users.

5. Maintain data Privacy & Security

Where there are so many devices transferring huge data, privacy becomes the priority and information shared needs to be secured all the time. This is no new thing, when devices are connected to a network, there is chance of data manipulation, which may lead to undesirable consequences like financial risk. Internet of Things helps to protect customer’s data from the inevitable breaches, including secure payment process and information management.

For example: When a customer connects their refrigerator to the internet, refrigerator automatically senses that the household is running out of eggs and orders a fresh eggs from the local grocery store.  IoT app in financial services is for payments which takes place seamlessly in the background. Here we are dealing with the customer’s bank account, so while making payment for the groceries using a refrigerator, customer must have the credentials to avoid any fraudulent transactions. Also gives customers a good experience and loyalty, that could help in collecting data and use it for marketing and services.

IoT will soon overtake the financial services, where the end users will be able to do almost everything at their convenience, from anywhere and anytime through the internet. It offers new opportunities  to solve problems, add value to financial services and to its customers – there is no area in life that would remain untouched.

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Mobile technology is the most dominating entity among other technologies, because it can reduce risks by controlling cost, increase productivity and enhance customer experience. Mobile technology has a huge impact on the insurance industry by attracting new customers and retaining former policyholders.

Mobile technology has become a game changer, gone are the days when you have to sit with the sales executive for hours to get policy information, now you can buy and purchase insurance products, compare other company offers, and even file a claim right on the spot via our mobile devices.

Mobile can play a vital role in transforming the insurance industry. Let’s explore more.

1. Acquiring Customer

Competition in the insurance industry has increased. Most of the industries are adopting mobile technology because it is more convenient and cost effective. Using mobile app technology, the insurance industry can now easily reach out to their tech-savvy customers. The path to insurance purchase is complex, usually customers won’t interact with insurance providers as frequently as they connect with their banks but, if the insurance provider is able to deliver claims-related documentation to the client’s smartphone, the opportunity of earning customer loyalty is high.

Mobile App technology keeps customers connected, as it provides quick access to the information, and less time is spent waiting for information to be delivered and processed. A fast and efficient service to the clients can be provided with the help of mobile technology. For example: Automatic email notifications is set up for clients, about the insurance process with real-time reports, clients will be getting notification on the progress of their applications and claims. These notifications improve transparency with clients, and definitely a better service which they will enjoy rather waiting for updates and receiving delayed reports.

2. Customer Service And Retention

Customers will look for services which take less time to process with efficiency and insurance providers who will meet the customer expectation will be getting the positive returns. Resulting in acquiring more ROI from the targeted market, with the help of mobile technology.

For example: In case of any emergency, insurance provider quickly providing access and contextual customer data following an accident claim filed via smartphone will give more tailored service to support the customer.

Once you have acquired new customers, now one of the most daunting tasks for insurance providers is to retain the customers. Mobile technology provides a solution to this, as mobile users spend close to 40 hours a month on mobile apps, they are now able to report theft or accidents quickly, make claims, or seek any information they require anytime from anywhere. Mobile app helps users to have multiple options in one app, like they can buy new policies, renew or upgrade their existing ones. This will increase the chances of generating more revenue for insurance industries and customer retention.

3. Simplifying And Expediting The Claims Process

Smartphone app is extremely useful and viewed as invaluable assets, when it comes to claims. They are capable of capturing and transferring data quickly, making the process  hassle free and expediting the complete insurance related claims process. By using mobile technology, customers can make claims, which eliminate all the time-consuming fuss associated with manual form filling. This processing has made the client’s life easier, by reducing the clutter, helping them collect data, communicate and collaborate in real-time and also freeing their time. Mobile technology has brought efficiencies into the most complex and costly element of the insurance business by automating previously time-consuming tasks, for both insurance industry and their customers. Customers can now use their mobile devices to take pictures of a vehicle accident and share it with the provider using a mobile app for processing their claim. This will help in enhancing the customer’s digital experience, and ensures satisfactory engagement and customer retention.

For example: US Pet Insurance company Healthy Paws facilitate their claims process by giving customers the option to submit claims through their mobile app, simply by submitting photos of their invoices received from their vet. The user can create a profile of their pet so that they can quickly assign a claim to a specific pet and forward their claim quickly for handling by Healthy Paws.

4. Productivity And Revenue

Mobile technology has become a game changer, by offering faster and more efficient processes which transformed the way insurance industries operate.It has reduced the paperwork, like domestic and commercial claims, appraisals, sales documents, and application forms which was used both in the office and in the field. Insurance providers are now using mobile forms, that has standardized drop-down menus, where data can be entered and reduce the need for typing free form. With less time spent double checking data and transferring data from paper to computer, insurance provider can focus more on their clients and other high-value responsibilities.

Mobile technology is certainly cost-effective and is easier to earn more in less time,  therefore, insurance industries are inclined to adopt the mobile space. Ensuring customer satisfaction, by providing multiple options to compare the different available options, browse through different policies before settling on one and pay bills using a smartphone, has helped insurance providers to gain customer’s trust. This customer-centric mobile technology improves the chances of revenue increase for insurance industries.

5. Big Data And Analytics

The insurance industry is a data-driven industry. It is very important to recognize the immense value and impact of analytics for any business. More than one-third of insurance industries are investing in big data and analytics like, financial data, actuarial data, claims data and risk data to take important decisions. Big data analytics deliver a significant ROI and cost savings for insurance industries to ensure their future successes and has become non-negotiable. Big Data helps in risk management, enabling to analyze the risk characteristics, improve customer segmentation, fraud identification and other areas. With the help of one mobile device where all the rules are configured, providers will be able to identify all the mistakes immediately, prompt the person to fix the error or omit before the form is submitted. And once the forms are submitted it can be reviewed instantly using the mobile technology whether remotely or at the office.

Mobile is bringing a revolution to the insurance industry, by allowing them to maximize their capacity with proficient and fast services. Using mobile technology customers is able to get in-depth knowledge of a product and insurance providers can utilize it to deliver remote presentations to their clients from anywhere.

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