Banking these days has become innovative and with full of technology where the services level has gone up as customers can enjoy real time banking at any time and anywhere, which is resulted in more satisfaction for customers due to easy accessibility.
Following are examples of Modern concepts in banking which are changing the old way of banking,
Open Banking:
Open banking involves sharing customer data securely between different financial institutions through application programming interfaces (APIs). It enables customers to have better control over their financial information and allows third-party providers to develop innovative financial products and services.
The purpose of open banking is to enhance competition, innovation, and customer experience within the financial industry. By allowing customers to access and share their financial data, they can benefit from a broader range of services, products, and personalized offerings from multiple providers.
Digital Banking:
Digital banking has become a standard in the industry, offering customers the convenience of accessing their accounts and conducting transactions online or through mobile apps anywhere, anytime and has become a standard offering by banks to meet evolving customer expectations and preferences. Banks are investing in user-friendly interfaces, secure authentication methods, and personalized digital experiences.
Digital banking platforms may integrate with third-party financial apps or services, such as personal finance apps, investment platforms, or credit scoring services, allowing customers to access a broader range of financial tools and services.
Artificial Intelligence (AI) and Machine Learning (ML):
Banks are leveraging AI and ML technologies to enhance various banking processes. Chatbots and virtual assistants provide automated customer support, while algorithms analyze data for risk assessment, fraud detection, and personalized product recommendations.
AI refers to the development of computer systems that can perform tasks that would typically require human intelligence, such as understanding natural language, recognizing objects or patterns, making decisions, and solving complex problems. AI encompasses a wide range of techniques, including machine learning, natural language processing, computer vision, robotics, and expert systems.
Machine Learning is a subset of AI that focuses on the development of algorithms and models that enable computers to learn from data and make predictions or decisions without being explicitly programmed. ML algorithms are trained on large datasets to recognize patterns, make predictions, or perform specific tasks. The more data they are exposed to, the better they become at making accurate predictions or decisions.
Biometrics and Facial Recognition:
Banks are adopting biometric authentication methods such as fingerprint and facial recognition for secure and convenient access to customer accounts. Biometrics offer stronger security compared to traditional passwords and PINs.
Biometric authentication involves using unique physical or behavioral characteristics of an individual to verify their identity. Common biometric modalities used in banks include fingerprint recognition, iris scanning, voice recognition, and facial recognition.
Facial recognition technology analyzes and identifies individuals based on their facial features. In banking, facial recognition is used for various purposes like Banks can use facial recognition to verify the identity of customers during the account opening process. Customers can take a selfie or capture a live video, and the facial recognition system compares it to a pre-registered photo or database to authenticate their identity.
Robotic Process Automation (RPA):
RPA involves automating repetitive and rule-based tasks within the banking operations, such as data entry and reconciliation. By using software robots, banks can streamline processes, reduce errors, and improve efficiency.
RPA can streamline the customer onboarding process by automating the collection, verification, and processing of customer data and documentation. It can perform identity verification checks, screen customers against regulatory compliance databases, and populate customer information into backend systems.
Loan and Mortgage Processing: RPA can automate various steps in the loan and mortgage application process. It can extract relevant information from loan applications, verify credit scores, perform income calculations, validate collateral details, and generate loan agreements or documentation.
Blockchain and Cryptocurrency:
Blockchain technology is being explored for its potential to revolutionize banking operations, including cross-border payments, smart contracts, and identity verification. Cryptocurrencies, such as Bitcoin, are gaining recognition and may play a significant role in future financial systems.
Blockchain is a decentralized and distributed digital ledger technology that allows multiple parties to maintain a shared database without the need for a central authority. It records and verifies transactions across multiple computers or nodes, creating a transparent and tamper-resistant record of data.
Personal Financial Management:
Banks are focusing on providing customers with tools and applications to manage their finances effectively. Personal financial management (PFM) tools offer features like budgeting, goal setting, and spending analysis, helping customers make informed financial decisions.
Saving money is a key component of PFM. It involves setting aside a portion of income for future needs and emergencies. Additionally, investing surplus funds can help individuals grow their wealth over time. Understanding different investment options and strategies is essential for making informed investment decisions.
Social Banking:
Social banking incorporates social media and community-driven features into banking services. It allows customers to connect with their peers, share financial advice, and access personalized recommendations based on social interactions and data.
Social banking platforms integrate social networking elements, enabling customers to connect with friends, family, and other users within the banking community. Customers can engage in conversations, share financial tips, ask questions, and seek advice from peers or banking experts.
Social banking platforms create a sense of community and foster engagement among customers. Users can interact, share experiences, and learn from each other, creating a supportive banking ecosystem.
Sustainable Banking:
With increasing environmental and social awareness, sustainable banking promotes responsible and ethical financial practices. Banks are integrating sustainability criteria into their lending and investment decisions, supporting green initiatives, and providing eco-friendly products and services.
Sustainable banks strive to minimize their environmental footprint and promote environmentally friendly practices. They may implement policies to reduce energy consumption, water usage, and waste generation within their own operations. Additionally, they may offer financing for green projects, renewable energy initiatives, and environmentally friendly businesses.
Voice Banking:
Voice assistants, such as Amazon’s Alexa or Apple’s Siri, are being integrated into banking services, enabling customers to perform transactions and get account information using voice commands. Voice banking offers a hands-free and convenient way to interact with banking systems.
It’s important to note that these concepts are continually evolving, and banks are continuously exploring new technologies and innovative approaches to meet customer needs and stay competitive in the market.
Voice banking leverages technologies like speech recognition, natural language processing (NLP), and artificial intelligence (AI) to understand and respond to customer queries and commands.
The writer is having vast experience in Banking and Finance sector for over one and half decade, where during his period of work he has experienced different economic and development initiatives taken for the wellbeing of the public masses through the banking channel.
He has worked for the Microfinance banks which are offering community based services among the under developed segment of the society.
The major work done in Financial Inclusion where several hundreds of people were brought to Banking channel to improve their businesses.
The under served segment of society like woman were given the chances to change their lives through credit facilities to grow their home based businesses which is also an imitative of Women Empowerment.
The Writer has also worked against different social issues and highlighting them for positive change in the society through public awareness and their active involvement to reach to the solution.
This journey of empowering people is on going and is never lasting till the time last person remains underserved.
