Instant payments, safety and personalization – this is what customers can expect from banking in 2020. How data-driven systems, chatbots, AI and blockchain be the right ways to fulfill these needs? Explore the main trends that are going to disrupt banking in the months to come.
Technology spendings in banking are going to increase by 4.6% in the coming year, according to Celent, bringing further changes in the offered services and technologies used. In 2020 banks will focus on the clients, even more, meeting their needs by improving customer service, security, and using data to become faster and more reliable. What does it mean for us, clients?
Customer-centric perspective
Seamless customer experience and consistency across different channels are the goals for all the industries. The same goes for banking. The sector has been investing heavily in technologies and new business models to meet the client’s needs and expectations, e.g. mobile app ATM withdrawals — the process of introducing near-field communications technologies to the ATMs. Adding services like Apple Pay or Google Pay is just the beginning. Soon, we will experience wide adoption of the QR codes in instant payments over social media.
Banks will also focus on personalized, real-time customer service by using smart bots. According to Gartner, chatbots will handle more than 85% of customer service interactions in 2020. The bots will be not only about simple queries – they are going to offer more advanced financial tips, detect fraudulent activities, and even assist customers during the registration process. This technology not only helps the banking world to provide centralized financial management but also improves the way customers connect with their banks.
Bitcoin and biometrics for improved security
Since banking has always been one of the most attractive targets for cybercriminals, security solutions need always to be one step ahead of them. Soon banks will use more and more cryptocurrency payments to provide safer, cheaper and faster transfers. Some are already creating blockchain systems with digital currencies for their customers, e.g. Bitcoin, which is a secure and verifiable way to keep track of transactions. The payments and currency exchange are transparent, and therefore, they are very advantageous to be used in banking. Customer data is protected in the decentralized database, in which all the information about real-time payments and profile details on multiple servers are stored.
In 2020 we will also see more sophisticated biometric authentication into mobile devices. Fingerprint identification or facial recognition will surely be considered as a special precaution in many bank apps, until the day they replace passwords altogether.
As an additional layer of customer authentication, banks are also going to introduce voice commands. This feature will also be used to make inquiries about transactions, transfer money or report stolen cards.
Data upshifts business
Shortly we can expect an increased focus on Big Data, not only to identify security threats in mobile and online banking. The value of the big data market in 2019 reached USD 29.87 billion, and by 2025 it is expected to double. Since data-driven organizations are 23 times more likelyto acquire customers than their competition, no business can neglect the importance of data, especially not the banking sector. Banks will take advantage of data by leveraging them to understand the needs and preferences of their clients, thus creating real value of new experiences, faster business decisions or real-time services. Based on data, banks will help their clients manage their spending habits and control finances. More data is also going to influence the appearance of digital-friendly products thanks to collaborations with third-party providers, such as fintech and startup companies.
Data analytics will also fuel growth and new business models, in which banks will be able to reap income thanks to data, for example, by sharing customer-analytics capabilities with new ecosystem partners. Great analytics will have to go hand in hand with building trust and being relevant to the clients.
Banks of the future. What to expect?
Technological development in the last decade changed the way we consume and how we operate with our money. In ten years cards and apps might be replaced by more advanced payment methods, e.g. using biometrics, to make the client’s experience more personalized and satisfying. The era when banks were all things to all customers is long gone; the data-driven ecosystem will rule the financial future. Relying on valuable information will be the starting point to enable the process of disruption in banking.
I would love to hear your thoughts on the future of banking technologies. Please drop me a comment! And if you need more information on how to leverage data in banking, feel free to contact me.