The revolution will not be televised; it will be live-streamed, downloaded, and tweeted.
That, ladies and gentlemen, is a snapshot of your future client. They still use their thumbs to hail taxis, but instead of braving the elements with their thumbs up, they tap on a screen from the comfort of their couch. They may spend hours shopping for the perfect gift, but only because they got distracted by a viral video.
Convenience is the name of the game, and non-compliance is not an option. Traditional banks can’t depend on their reputation anymore.
To remain competitive, you have to employ technology in order to appeal to this new generation.
We’re not just talking about individuals here. These days, everyone is an entrepreneur with a profitable YouTube channel, blog, or side hustle. They have no interest in spending their time talking to a customer relations officer in a banking hall. They focus on their passion.
Everything else is either complementary or a nuisance. Take a wild guess how “going to the bank” would be classified.
Luckily, technology is being developed to increase convenience, improve security, and reduce the cost of transactions for both clients and banks.
What Technological Advancements Are We Talking About?
According to a report by Deloitte, blockchain technology, artificial intelligence (A.I.), and cloud computing will continue to make waves in banking this year. At the core of these advancements is data management.
Let’s take a closer look at what these technologies have to offer both the banks and their clients.
1. Predictive Marketing
Despite spending hours on end staring at screens, everyone needs that personal touch once in a while. Receiving cold calls from sales representatives is irritating because they know next-to-nothing about the customer and they almost always want to sell you something you don’t need.
Artificial Intelligence (A.I.) is changing that approach. Chatbots are becoming commonplace in customer service. In financial institutions, the software is charged with handling basic inquiries, reducing the demand for customer care representatives.
With time, the system gathers data about the customer and is able to customize its responses and cross-sell products that may suit the customer’s needs.
Social media and secure data sharing platforms will provide banks with a holistic view of their clients and provide insight into their world. For example, promotional messages about a new children’s savings account make more sense to a soccer mom than it would to a 25-year-old bachelor.
With proper data analysis, the bank will be able to anticipate what products their current and potential clients will need and want.
2. New Job Descriptions for New Skill Sets
Face to face interaction is so rare with automation. ATMs now accept deposits and offer an interface for intra-bank transfers. Internet banking has almost wiped out the need for branches.
A.I. programming is getting quite nifty at detecting fraud. Rather than having numerous compliance officers comb through volumes of potentially fraudulent transactions, a handful can skim through a computer-generated report that highlights suspicious activity. It’s no longer about the quantity of the workforce. The real asset is in the quality of the team.
Enter Fintech specialists. The demand for personnel who have some experience with all this new technology is rising.
So the good news is, man isn’t obsolete in banking yet. Chatbots aren’t completely independent. Clients can ask questions that the system is not equipped to answer. In such cases, the system will escalate the inquiry to a human.
The intelligence part of the technology learns from the responses given by your personnel, making the need for an entire call center unnecessary.
In addition to the interpersonal skills associated with customer relations, your team needs to understand these new systems that interact with your clients. Your HR department is probably going to be quite busy this year!
3. Everything Is Moving to the Cloud
Soon, banks will have to repurpose their server rooms as they make their move to cloud computing. This alternative to the physical infrastructure that supports the banking system is slowly taking over. Some large banks have already moved almost half their operational software to the cloud.
Accessibility of data and documents is easier for staff on-the-go. Data is more secure because the information is split and spread across numerous servers globally.
As cloud computing makes software solutions and collaboration more accessible, banks will be able to invest more on tech that improves their core business, rather than pushing resources towards buying software licenses and maintain outdated hardware and legacy technology.
4. Increased Cybersecurity
Your security must be agile. Cybercrime is no longer an outlier, but the main threat to banks of all sizes. Even smaller regional and independent banks are targets for hackers and phishers. The good news, however, is that cybersecurity solutions have also improved.
Moving beyond firewalls, things such as employee training programs, authentication, and proactive scanning and reporting have become widespread. World class I.T. security has never been so readily available to banks of any size.
Blockchain technology is here to stay. Once we get over the stigma of the cryptocurrency flip-flop, we will realize the promise that the tech has to offer.
Experts contend that this is as close as we can get to un-hackable technology at the moment. With the spotlight on data security, this technology will soon become a necessity.
5. Increased Data Sharing
Open banking has created a financial services playground. Your clients will be able to check out all you and your competitors have to offer on one platform and make an independent decision about who best matches their needs. They can then instigate an exchange of information whose distribution they control.
Application programming interfaces (APIs) have made this exchange so easy. Since data is the bloodline of this industry, this free exchange of information means less hassle for your clients.
Unfortunately, it also means that you may lose some of your competitive edge.
As you continue to compete for market share, you need to ensure that in the digital space, your clients are getting the most value for their money. With open banking, your digital platform is your sales rep. Many of the financial services on offer appear to be generic.
The ability to customize and tweak the products to create the greatest value for the customer will be a game changer. Can your technology compete?
Automation and digitization can no longer be denied. The easiest way to remain relevant is to embrace it.
Let us ease you into the future of banking with technology solutions built just for you. JMARK has been serving banks of all sizes in the Midwest for over thirty years. We have a team of techs and reps dedicated to financial services, and expertise in banking security, compliance, and other necessities to help you ace your audits.