Digital transformation isn’t optional for tech leaders in the consumer banking industry, which has already experienced significant disruption due to the advent of FinTech, or innovative new finance technologies.
The pressure is on for bank and credit union tech leaders to deliver or fall behind competitors and new startups trying to capture banking customers. According to a recent study, 56 percent of retail banking execs plan to increase spending innovation this year, while 55 percent will invest in customer experience initiatives. In 2018, there’s immense pressure for tech leaders to deliver on security risk reduction, customer happiness, and exciting new FinTech.
Research on growing banks reveals the most successful organizations use tech to improve the customer experience–including enhanced mobility, convenience, and security. To shape your innovation strategy for the months to come, here are five disruptive forms of finance tech to watch for.
1. AI Customer Service
It’s unlikely that your branch customer care advocates will be replaced with robots in the near future. However, the near-term adoption of Artificial Intelligence (AI) customer service representatives in online and mobile apps are not so far-fetched.
Bank of America has launched a bot named “Erica,” and Wells Fargo is pilot-testing chatbots for various use cases, including helping bereaved relatives complete paperwork.
2. AI Fraud Detection
Algorithms and AI are increasingly used to reliably detect inconsistencies in customer behavior that can point to fraud, theft, or other risks. Robots are also making processes more efficient for the back office. The operational efficiency gains with automation were so massive Ally Bank President Diane Morais “literally cried” tears of relief.
3. Biometrics for Security
With information security risks increasing, passwords can put customers, their data, and their money at-risk. The ABA predicts the use of biometrics, such as iris or thumbprint scans, to authenticate customer identities for mobile apps or payments is just one to two years out.
While it could represent a seismic shift in security technologies and IT infrastructures, it’s likely to reduce the risks for both banks and their members significantly.
4. Voice Banking
Early adopters of technologies such as Amazon Alexa and Google Home are using these AI-powered, voice-activated “digital assistants” to schedule meetings, check the weather, and increasingly, complete personal finance transactions. There are over one billion voice-activated uses of search engines per month alone in 2018.
Demand for convenient, voice-activated mobile banking among consumers is so strong; The Financial Brand analysts recently wrote: “you must launch a voice banking strategy now.”
While headlines continue to closely document the repeated rise and fall of bitcoin, the consumer banking industry should be carefully watching blockchain–the distributed ledger technology used to build bitcoin and other cryptocurrencies. Due to structural integrity and use of cryptographic hashes, blockchain could represent a new era for data integrity and security in the finance industry.
While even the earliest adopters in the consumer banking sphere are still experimenting with Blockchain, many finance tech leaders would agree that its potential is too great to watch it unfold passively. Several institutions have blockchain or related projects in production at the time of writing, including JP Morgan Chase and Northern Trust.
Adopting Future-Proof Consumer Banking Technologies
Many of today’s most innovative consumer finance technologies are surrounded by hype and even more uncertainty. While blockchain has near-limitless potential, will it be up to future regulatory standards? For tech leaders at banks and credit unions, knowing how to invest in innovation is undoubtedly challenging.
Investing in the customer experience isn’t optional, and banks are also wise to explore the value of experimenting with AI, voice-activated banking, and other emerging examples of FinTech. When coupled with secure and adaptable, trusted technologies for the industry, such as on-demand printing solutions for banks, IT leaders can shape a future-proof tech roadmap.