What are the driving forces behind transforming the banking and financial services industry?​

1.  Artificial Intelligence and Machine Learning

• Artificial Intelligence and Machine Learning are the new technology currently shaping the world for food.
• Apart from other sectors, the banking and financial services industry can benefit significantly from AI and ML.
• With the involvement of AI & ML, banks can quickly fulfil the customer-centric approach of digitalization.
• AI can help provide top-quality banking services to customers at lower prices.
• It can help reduce the operational cost of banks significantly
• Artificial Intelligence can also improve customer interactions via chatbots, virtual assistants, and automation.
• They can resolve customer queries and detect fraud via AI-based biometric systems, KYC checks, etc.
• They help make lending decisions for the banks, document analysis via computer vision-enabled tools, customer onboarding, compliance management, etc.
• AI and ML are also useful in risk assessment, investment decisions, and financial forecasting.
• Hence, Artificial Intelligence and Machine Learning can be excellent inclusions to enhance digital transformation in the banking sector.

2.  Blockchain Technology

• All you have been hearing for the past few years is about cryptocurrency.
• The concept of digital assets is fascinating and works on blockchain technology.
• Blockchain technology uses cryptography to record transactions.
• The most exciting feature of blockchain technology is that customers can see what happens with their digital assets, which prevents fraud.
• It is a very efficient technology that is transparent and fraud-proof.
• There is also no need for intermediaries, enabling faster cross-border payments.
• Also, the transactional fees of digital assets are lower when compared with traditional banking.

3. Quantum Computing

• We all know the amount of data the banking and financial services industry handles.
• Most banks face the challenge of processing data using traditional computing methods.
• However, the solution to the above problem is Quantum Computing.
• It provides faster processing of bulk data with more efficiency and security.
• They can make accurate predictions improving the banks’ cybersecurity.
• They also help banks in optimizing portfolios.
• Some examples are- Quantum Encryption, Quantum SaaS, etc.

4. Big Data

• The importance of data in the digital world must be addressed.
• The finance sector has the most crucial role in Big Data because all their operations are based on customer data.
• Incorporating Big Data into the banking sector, we help organizations create customized banking services and improve personalization.
• Big Data also helps with targeted customer services and effective customer feedback.
• Also, fraud detection is a critical feature of Big Data.
• Hence, Big Data supports the digital transformation strategy by helping with the customer-centric approach.

5. Open Banking

• Open Banking is a connection portal between NBFCs and Banks.
• It provides accessible and personalized financial services to customers.
• In Open Banking, the APIs help third-party developers to access customers’ financial data without affecting data compliance.
• The banking APIs help NBFCs to securely get all information about their customers eliminating the double verification processes.
• Open Banking helps to approach new customers via third-party sources, improving the financial penetration in the country.
• It is an excellent approach to digitally transform the financial services and banking industry together.
• Some of the open Banking approaches include technical API infrastructure, treasury management, etc.

6. Internet of Things (IoT)

• Personalization is the key to successful digital transformation in the banking sector.
• The Internet of Things (IoT) helps collect data in the finance sector.
• Data is one of the critical components of every sector today.
• In the banking industry, automating data can help with many banking processes, like IoT-enabled ATMs, low cash alerts, digital wallets, IoT payments, KYC, lending, etc.
• With data, banks can give you a personalized experience and improve accessibility.
• IoT also helps in detecting fraud; hence it can also be a cybersecurity tool.

7.  AR & VR

• Augmented Reality (AR) and Virtual Reality (VR) are immersive technologies that can be a part of the digital transformation strategy of the banking industry.
• These technologies help provide customized experiences to the clients by delivering optimized interaction between the banks and customers.
• VR creates a virtual platform for the customers to interact with the banks on the metaverse.
• These technologies are great for training employees about banking procedures and protocols.
• Banks can virtually streamline the loan application process via VR.
• These technologies help engage customers and help build a connection between the banks and clients.
• Some examples of immersive technologies are- AR-powered customer interactions, VR-powered employee training, etc.

8.  Cybersecurity

• Another critical aspect of digital transformation in the banking industry is cybersecurity.
• With the digitalization of the banking sector, there is a lot of sensitive and transactional customer data online.
• The increase in data automatically creates the threat of cybercriminals.
• Hence, it is crucial to introduce security protocols and data compliance management in the banking sector.
• The promise that every bank gives its customer is security.
• Hence, it is essential to stand up to the promise by opting for cybersecurity solutions.
• Some cybersecurity protocols are- data encryption software, AI-powered fraud detection, anti-hacking software, cybersecurity governance, etc.

9.  Banking Process Automation

• If you know the traditional banking system, it has a lot of paperwork and repetitive tasks for the employees.
• The repetitive tasks in banks are important but unnecessarily time-consuming, shifting the employees’ focus from critical work.
• Hence, the introduction of Banking Process Automation (BPA) can be a great option to increase the productivity of banking employees.
• Process Automation introduces robotics in the banking sector to handle repetitive yet essential tasks so employees can focus on critical bank work.
• This automated software can handle invoice processing, mortgage processing, loan disbursement, credit card processing, payment approvals, etc.
• Through BPA, bank employees can focus on creativity and innovation.
• It will improve the productivity and workflow of banks significantly.

10.  Neobanking

• Neobanking is a type of technological advancement promoting banks’ digital-only presence.
• In this form of banking, the infrastructure and capital expenditure become zero for the banks.
• Moreover, banks can easily make customers happy digitally with personalized and quick service.
• It includes an integrated banking system via cloud computing, open API, etc.
• Neobanking supports automation in the banking sector along with workflow and payroll management.
• It increases the accessibility of banking services across different platforms.
• Also, neo banks have lesser operational fees and convenience at the tip of customers’ fingers.
• Some examples of Neobanking are- Buy Now Pay Later (BNPL), etc.