Here are the top 5 tools and technologies for smart banking

Fast-paced technological reforms are reshaping the financial services ecosystem globally. A world that was heavily reliant on traditional financial institutions to perform any banking activity is moving towards embracing technologies and digital platforms to conduct banking operations online. According to a survey by Insider Intelligence, nearly 80 per cent of the survey respondents who have used mobile banking say it is the primary way they access their bank accounts. During the last decade, this shift has enabled the banking industry to witness a profound transformation with modern technologies and tools that have now become a staple for most financial activities.

Technology integration in banking has exposed a whole new spectrum of capabilities that can be leveraged to improve performances by gaining an intricate understanding of operations. According to various studies, the banking industry’s most transformative challenges and opportunities are responding to customer needs, cost optimization, digitalisation, creating new revenue streams, and new compliance and security systems. Banks are adopting a more customer-centric strategy built upon the foundation of intelligent technology architectures.

In such a rapidly evolving landscape, new and competitive players are making grand entrances. FinTechs are disrupting established markets and creating an uproar with customer-friendly solutions. According to McKinsey, technologies such as AI, Blockchain, Cloud, and IoT will drive business model reinventions and shape the competitive environment in the banking space. With diverse options at customers’ disposal, expectations are on the rise demanding agile, responsive, seamless, innovative and integrated real-time experiences.

As banking becomes a more virtual experience without needing to visit a physical location, it is also important to strengthen systems against digital threats such as breaches, cyberattacks, financial frauds, and more. Businesses that can leverage technological capabilities such as analytics, data, AI, and technologies to improve user experience are more likely to inspire customer trust, which is a crucial factor in success.

Modern tools and technologies for smart banking
1. AI personalisation
According to McKinsey, AI technologies can potentially provide an additional $1tn each year in the value of global banks. With AI and Machine Learning, banks have the potential to gather more data and insight about their customers and curate immersive banking products, solutions, and experiences for their customers. From optimising back-end operations and managing data to creating a seamless customer experience, compliance, product delivery, and risk management, banks can personalise and tailor functions with automation and AI-centered tools.

2. Instant payment gateway
Instant payment methods are now available in many countries. Most countries and banks are working together to offer an instant P2P payment experience that caters to a more extensive customer base. Mobile wallets, cryptocurrency, point of sale (POS), and blockchain are some new payment innovations that are also gaining popularity and offering novel methods to make transactions.

Diversifying and adopting instant payment capabilities in e-commerce and m-commerce are giving banks and credit unions greater scope to build innovative portfolios of customer-friendly services. Adding to that, some businesses value customer payment insights as an intellectual asset. They can further segment and create personalised customer experiences based on core behavioral patterns.

3. Robotic process automation (RPA)
AI Virtual assistants are self-learning tools designed to perform tedious and repetitive tasks at the speed of light. Additionally, Robotic process automation (RPA), which also automates repetitive tasks, is helping banks create meaningful customer engagements that are real-time, fast, efficient, and productive. Combining the power of AI and RPA, banks can easily streamline operations like customer onboarding, on-time loan processing, closure of customer accounts, and more. As a result, banks can minimise costs and maximise efficiency by understanding key bottlenecks with better clarity. Such systems also enable automated decisions based on previous data patterns and eliminate room for human error. With automation, banks are better positioned to reduce manual work and allow their executives to focus on more complex, strategy-driven tasks.

4. Wearable technology
Imagine a single gesture or touch, and your bank is there with you. While this might not have been possible a few years ago, today, it’s possible with wearable tech. Wearable gadgets are built to give you an immersive experience by gathering data using technologies like sensors on smartwatches, fitness trackers, communication devices, and more. These tech-gadgets store customers’ payments and other essential information to help authenticate the user and avoid fraudulent transactions. They also give customers insights by engaging with different applications. With the use of servers, analytics engines, and decision support tools, data is collected and analysed to help enterprises make the right decisions to optimise experiences.

5. API platforms for open banking
Open banking practices enable third-party financial service providers with unrestricted access to consumer banking and other financial data from banks and non-bank financial institutions. It is primarily based on open-source software programming interfaces, i.e., APIs. According to the Open Banking Project, 10 to 11 per cent of digitally-enabled consumers now actively use some form of open banking service. Open banking has been a major innovation in reshaping the banking industry as it allows the networking of data and accounts for financial institutions, customers and third-party service providers. APIs allow trustworthy third-party developers to build services and technology interfaces for financial institutions. With this, banks can develop innovative products to create better customer experiences, where the bank serves as a platform, and third-party companies build applications using the bank’s data.

Conclusion
There is no denying that modern banking approaches built upon technologies have simplified operations, helped improve customer experiences, and generated value. Still, financial institutions and banks need to keep their speed up in the heel-and-toe race of technology. With these technologies, banks can cater to their customers’ needs with better access to insights and offer real value while staying on top of the wave.

Customers are key to driving better banking innovations, as they act as a great source for uncovering major challenges and help companies create better, seamless digital banking experiences. Banks must rethink their technology infrastructure to support increasing volumes of critical customer data and leverage an AI-powered decision-making model to learn, solve issues at scale, and grow rapidly.

Vishal Kumar is the president and regional head – Middle East, Africa and APAC, ITC Infotech