While banking and financial services are slower than other industries to integrate the latest technology into their operations, financial organizations are trying to catch up by building in artificial intelligence, blockchain and other technology to benefit their customers, competitively to stay and improve business results. Here are the 7 biggest tech trends that will disrupt banking and financial services in 2020.
Artificial Intelligence (AI)
While banks and financial services tend to be slower to adopt new technologies, a PricewaterhouseCooper survey confirms that the majority of financial services decision-makers invest in artificial intelligence (AI) – 52 percent of executives affirm that they ” make substantial “investments in AI, while 72 percent believe it will be a business advantage. One thing that will likely lead the rest to believe in the potential of artificial intelligence for the industry is the cost savings projected to reach $ 447 billion by 2023.
So, how do financial institutions use artificial intelligence? The most visible way the banking industry is using artificial intelligence (AI) is for customer service from chatbots and robots. Many of the largest financial institutions, such as Bank of America and JPMorgan Chase, are using AI to streamline customer service. Another customer-centric way that AI is deployed is to facilitate mobile banking, giving consumers 24/7 access to conduct banking activities. AI also plays an important role in how financial institutions improve security and prevent and detect fraud. The technology aids financial institutions in risk management and lending decisions and is fundamental to making other technology work, such as big data analytics, automated process automation, and voice interfaces.
Blockchain technology, first used in the cryptocurrency Bitcoin, is a distributed database that can track transactions in a verifiable and permanent way. The Harvard Business Review predicts that blockchain will disrupt banks the way the internet disrupted the media. Blockchains are transparent, very safe and relatively cheap to use. As more financial institutions realize how blockchain can improve security, save money and improve customer satisfaction, more financial institutions will adopt the technology.
Blockchain can support banking in various ways. Bitcoin has shown how it can be used for payments, but it can also be transformative in the way our capital markets work by tokenizing and posting traditional bonds, stocks and other assets on public blockchains. Blockchains would remove the gatekeepers and third parties in the lending and credit system, while also making it safer to borrow money and cut interest rates. Blockchain could also eliminate manual data reconciliation for bank ledgers. The way information and money are exchanged today will be changed by smart contracts operating from blockchain technology.
One way to determine the impact of a technology on an industry is by looking at how an industry invests in it. According to the IDC Semiannual Big Data and Analytics Spending Guide, the banking industry is currently one of the industry’s leading investors in big data and business analytics solutions. The amount of data generated by the financial industry – credit card transactions, cash withdrawals, credit scores – is mind-boggling. And being able to use that data to make business decisions and process it effectively to gain actionable insights is critical to staying competitive going forward.
Financial institutions can use big data to learn about customers and make real-time business decisions, including learning a customer’s spending habits, sales management such as segmenting customers to optimize marketing, as well as cross-selling of customers. products, fraud management, risk assessment and customer feedback reporting and analysis. Big data analysis not only helps to identify market trends, but also helps financial institutions to streamline internal processes and reduce risk.
Robotic Process Automation (RPA)
As automated process automation can save labor and operational costs and minimize errors, many financial institutions are starting to use this technology to create the best possible user experience for customers and remain competitive. In RPA, software is programmed to enable robots and virtual assistants to perform repetitive and labor-intensive tasks correctly and quickly without human intervention.
RPA, through customer service chatbots, helps banks deal with low-priority customer inquiries, such as billing and payment inquiries, freeing up human customer agents to deal with the high-priority issues. Insurance companies use RPA to automate parts of the claims handling processes. Another way that RPA affects financial institutions is to help ensure compliance in the highly regulated industry. Thanks to RPA, customers today can get a decision on their credit card application within hours, but sometimes almost immediately after submitting the information. It also optimizes mortgage processing.
Cloud computing is a technology for storing data and providing computer services including servers, databases, networks, software, analytics and more over the Internet. When an individual or a company wants to use the cloud, they pay a cloud provider on a usage basis with pay-as-you-go pricing.
Cloud computing makes 24/7 customer service possible everywhere. In addition, cloud computing increases the agility of financial institutions and makes scaling up services easier and faster. Because they only pay for the services they use, cloud computing can help financial institutions control costs. Cloud computing also enables secure online payments, digital wallets and online transfers.
Chatbot solutions, powered by advanced artificial intelligence, are used by financial institutions to reduce costs and meet customer expectations for fast response and effective problem resolution. Traditional forms of two-way communication such as email, telephone and SMS can be replaced by a chatbot. Chatbots are expected to handle no less than 85 percent of customer service interactions by 2020, according to Gartner.
Chatbots provide an almost instant conversation experience that can be personalized so that customers get premium service quickly. Bank of America, Capital One, and Wells Fargo have used chatbots for simple account questions for years, but today’s sophisticated chatbots can even provide financial advice. Bots are also able to provide centralized financial management through the different channels clients have with their financial institution, correcting what felt incoherent in the past. This technology continues to improve and allows customers to connect with their bank on their terms.
Cyber security and resilience
In an industry dealing with sensitive personal and financial information, which is an attractive target for cyber criminals, security is paramount for financial institutions. It would be a good idea for financial institutions to assume that there will be a security breach and make plans to minimize the damage, as preventing all cyber-attacks is nearly impossible due to the different ways consumers dealing with their money and the numerous vulnerabilities that still exist. how much time and energy is invested to prevent cyber attacks. From mobile apps and web portals to third-party networks and even vulnerabilities introduced by employees and customers themselves, security is never guaranteed, even if you can periodically thwart an attack.
Financial institutions must do more than invest in technical measures to protect against cyber attacks. They must share knowledge and best practices, work with governments to ensure cybersecurity is a priority, be proactive in educating employees about their cybersecurity responsibilities and the importance of following protocols, and reach out to the public to help them. help them understand the situation and their insights. role in keeping their personal information safe.