About 39% of bank executives admit that technology reduces operational costs, and 24% say it enhances customer services, according to research by Business Insider. Besides changing how people interact and handle business, technological advancements will continue shaping the future of banking globally. The increasing demand for digitized banking services from millennials and Gen Zers is not only influencing how people are transferring money to South Africa but also how banks and credit unions operate.
Open Banking through APIs
With more regulatory bodies across the world, expecting bank organizations to allow customers to share information through APIs with third parties, we can expect the expansion of open banking. Sharing account and payment information through APIs or Application Programming Interfaces gives consumers flexibility and power in how they interact with financial institutions. For the retail banking industry, open banking helps them focus on their technology journey head as more technological competitors penetrate the market. Like any other innovation, open banking has its benefits but also presents a set of challenges that financial institutions must understand and seek effective solutions.
Technology to Create a Cashless Society
A cashless society has led to a lot of debate in the last few years. But with emerging technologies that deliver contactless payment systems, the world is embracing a cashless economy. Banking with Bluetooth, virtual reality, wearables, and digital assistants are some of the emerging mobile technologies influencing the growth of contactless payments. While each one of these technologies guarantees secure payments, being in a paperless world has benefits and setbacks. In a cashless society, there will be less fraud and crime, with technologies such as voice and face recognition in place. Going cashless poses risks to those who don’t have bank accounts or the required technology for transactions, as they cannot make transactions or receive financial aid and vice versa.
Banks to Use AI-Driven Data
Banks will use AI-driven processes to merge internal and external data of their consumers to build predictive profiles in real-time. This move will help financial institutions, regardless of size, to personalize customer services, improve security and competence. By using detailed consumer data and deploying AI-driven chatbots and robotic-advisors, banks will provide personalized next-action tips instead of blind marketing.
In a market where competition is high, margins are thin, and technology has an impact staying on top can be overwhelming. Financial institutions must consider innovation as a top priority and shift business cultures to support new technologies. They must also pay attention to the increasing demand for digital banking services from consumers and prioritize the latest banking tech trends.