5 Innovation Technologies That Will Define Banking in 2019
With the increasing need for digital solutions and an increasing volume of financial data, banks are integrating new technology solutions into their businesses at an unprecedented pace. This continues a trend that has been ongoing for the past few years.
AI and Machine Learning Are the Top Platforms for Digital Transformation
Machine learning and artificial intelligence are experiencing a boom in popularity among financial institutions, enabling automated processes and machine-learning-based decision-making. Traditional banking businesses are finding that AI and machine learning can allow them to achieve more with less.
Virtual Assistant Platforms Are Emerging
Virtual assistant platforms allow businesses to create digital teams that provide customer service, like Uber or Amazon Web Services. These platforms can deliver a wide range of services, including virtual human assistance, machine learning, and natural language understanding. AI and machine learning are now being used to power virtual assistant platforms, allowing companies to create digital teams that provide personalized assistance, like a customer’s personal concierge.
Artificial Intelligence Is the Future of Banking
Artificial intelligence is quickly becoming a leading theme in financial services, as organizations explore new ways to use AI and machine learning technologies to improve their businesses. AI has the potential to improve almost any industry, given its wide range of applications. It can help companies better understand their customers and their needs, allowing businesses to engage with customers more effectively. The future of banking is about more than just technology — it is about how organizations use technology to improve people’s lives.
Blockchain Is Here to Stay
In his first State of the Bank Address, President Trump remarked that blockchain is “the future of banking.” This year, several financial institutions formed a Blockchain Trade Association to accelerate the adoption of blockchain technology within the financial services industry, and it seems as though the future of banking is here to stay. Blockchain technology is not just a tech buzzword; it has found practical use in solving real-world problems in the financial services industry. For example, financial institutions are using blockchain technology to revolutionize the way they source and verify critical financial data, like by using the technology to verify transactions. This has serious benefits, like eliminating middlemen and reducing fraud, while also providing benefits to the business, like better data accuracy.
Cash is Dead
As more and more organizations experiment with blockchain, cash falls further out of favor. It is becoming more difficult for banks to obtain cash, as it is replaced with digital assets like cryptocurrencies. This trend will likely continue, as more banks move towards a cash-free model. Cash has many advantages, such as being able to provide flexible and quick payment methods, as well as advanced cash management and tracking capabilities.
BPO Integration Will Drive Advancements
Business Process Outsourcing (BPO) — which lets companies outsource certain functions like HR, payroll, or bill-payment processes — has grown rapidly in the past few years. This will allow businesses to maximize the benefits of these technologies while minimizing the impact on existing processes.
How to Achieve Success with Digital Transformation
To realize the full potential of digital transformation, it is crucial to understand your business and the customer experience. To do this, it is helpful to conduct market research, understand your customers’ needs, and understand your competition. Doing this will help you to plan for the long term, and avoid the short-term reactive strategy. To plan for the long term, it is crucial to understand your business and the customer experience. To do this, it is helpful to conduct market research, understand your customers’ needs, and understand your competition. Doing this will help you to plan for the long term, and avoid the short-term reactive strategy. Doing this correctly will require dedication from all team members, as well as from senior leadership.
Bottom line
Banks are investing heavily in digital transformation, and AI and machine learning technologies to power their businesses. Organizations need to understand their business and the customer experience. Doing this will allow banks to create more personalized experiences for customers while achieving more with less.
Blockchain Technology
Blockchain technology has been making waves in the financial world for the past couple of years. It has seen wide adoption in the banking sector, with a large number of banks using blockchain-based digital assets to settle cross-border payments and track assets. This last functionality is particularly important, as it provides a check against money launderers and other nefarious activities.
Artificial Intelligence (AI) and Machine Learning (ML)
In the last year or two, AI and ML have become cornerstones in the field of financial technology. AI can help automate financial processes, with AI-enhanced trading platforms optimizing positions and sending orders accordingly. ML, on the other hand, allows for natural language processing and can be used to create smart software that can interpret data and make predictions. Machine learning allows computers to “learn” through experience, making inferences and making judgments on their own. It can help make decisions that people might not be able to make corrections on their own, like predicting future behavior and understanding the nuances in social situations. AI and ML can also be used to “upgrade” or “refresh” data-driven software. Automatically importing new data into existing software, for example, can help automate processes and make the software more accurate.
Artificial Content Generation (ACG)
Beyond AI and ML, a rising trend in financial technology is an artificial content generation or “ACG.” ACG is the process of creating content that is both realistic and accurate. It is closely related to natural language Generation but differs in that it focuses more on the business issue. ACG is not only about creating financial content but also immersing the audience in an engaging experience. To this end, banks are increasingly using AI and ML to create video content that can be used to educate and engage clients. This includes video news, financial and stock analysis, and market overviews.
IoT (Internet of Things) and Digital Transformation
Beyond blockchain and AI, the most significant technological change that is underway in the banking sector is digital transformation. This refers to the ongoing process of modernizing the entire IT and operational systems to meet the increasing demand for digital solutions. It is accompanied by the adoption of new technology and a corresponding need for new skills for employees and managers. The implementation of digital transformation, also known as “digital transformation IIoT,” is a process that starts with the top-down adoption of modern digital solutions. This takes time, as most organizations only start to notice a tangible impact after several years of using the solutions.
Mobile and other digital transformation trends
Beyond the above, there are several trends in mobile banking, wider digital transformation, and other mobile-first developments that will have an impact on banking in 2019. First, banks will continue to invest in massive data integration to better serve clients. This will include the ability to process real-time data to provide insight into customer needs and provide personalized recommendations. Second, the cost of ownership of digital solutions will continue to decrease, with AI and ML becoming more affordable.
Conclusion
While there are still several questions surrounding some of these trends, it is clear that the future of banking is changing. Banks are in the process of digital transformation, and this will continue through 2021. However, this transformation will be driven by more than technology alone. It will also be accompanied by an effort to redefine and establish banking as a service industry.