What is new technology in banking
The year 2020 was also marked by upheavals in the banking sector. In order to remain relevant and differentiate themselves in today's digital age, financial institutions need to show a solid understanding of the current banking landscape and orient themselves to the changed habits and expectations of customers.
COVID-19 may have accelerated existing trends, but whether they will continue at the same pace remains to be seen. Those who move on quickly will lead the way and stay ahead. More than ever, it's not just about competitive advantage, but for some banks even about survival.
Niccolò Garzelli, Senior Vice President Sales at Auriga, predicts what the banking industry can expect this year:
Financial institutions remain a popular target for cyber criminals
The number of cyber attacks on banks will continue to increase in 2021. This affects not only digital banking channels that are used for transactions, but also ATMs. Due to outdated hardware and software, these are often the greatest weakness in a bank's IT security infrastructure.
With the increasing spread of home office and teleworking, bank employees only have remote access to their systems. In this area too, weaknesses are revealed that cyber criminals can exploit. Special cybersecurity solutions on employees' computers will be unavoidable.
In addition, financial institutions must protect themselves even more against cyber attacks on the way to the NextGenBranch. For example, assisted self-service devices - which belong entirely to a financial institution and are secured by it - will represent the interface between the customer and the bank in the bank of the future.
These devices must be adequately secured in order to gain customer trust. The security aspect can develop into an important differentiator compared to other channels such as online or mobile, which the customer is also responsible for protecting.
This year, financial institutions will have to deal more intensively with cyber security and corresponding solutions and will work actively to ensure that both the personal data of their customers and their systems are protected.
There is no stopping investment in artificial intelligence
Banks will continue to invest in artificial intelligence while looking for additional uses for this technology. This year, a slow introduction of AI, for example for repeatable and predictable processes, can be expected.
AI technology is already being used to create cash forecasts or to determine when and where cash is needed. Predictive tools are time and cost efficient and can also be used for preventive maintenance of ATMs and other devices.
This makes it easier to plan service calls before a failure, improves availability and reduces costs. It cannot be ruled out that AI will also be used to capture customer sentiments with the help of facial recognition.
On the basis of this information, bank employees could assess how they should address the customer, which services they should suggest and at what point in time.
Tele-, mobile and online banking - which channel works, which one stays?
This year banks should again pay special attention to the customer journey. Banks need a good mix of channels to address customers. A digital platform alone is not enough, as it is prone to IT malfunctions and failures and not every customer can cope with the technology. Tele-banking has always been able to assert itself as a reliable channel in this regard.
Over the years, banking has changed with the introduction of technology to reduce costs and increase efficiency. The unintended consequence of this is that the bank-customer relationship has become increasingly impersonal. When the first ATM arrived more than 50 years ago, bank customers no longer had to enter a branch to withdraw or deposit money.
With telebanking, customers no longer even had to leave their home and could do banking from afar. In the recent past, internet banking and then mobile banking have resulted in some sections of the population never having personal contact with their bank. Customer loyalty has also suffered from this lack of human interaction.
When it comes to channels, a “first in and first out” principle is rarely the right approach. Banks must continuously evaluate each channel and recognize its value for the customer. At the same time, they have to offer a selection of channels. Older channels, such as tele-banking, should not be the first to disappear. And in fact, the latter could experience a revival alongside video banking in the new 24-hour branch model.
As online banking is increasingly giving way to mobile banking, one could even argue that this channel is most likely to disappear. Channel choices will vary based on generation, demographics, and other factors, but it remains important that financial institutions offer choices and that customers always have a reliable alternative available.
Focus on the customer with new store models and services
Although online and mobile banking are very popular, many customers still prefer face-to-face interaction in the bank branch. This year it is important to expand the digital offerings and at the same time to expand the strengths of on-site support in the branch in order to focus on the customer and give him the choice.
With so-called white label branches, the financial institutions can share costs for locations and resources, but at the same time maintain their physical presence.
We are also observing that self-service services are being expanded worldwide to include assisted and remote services in order to give customers an alternative to pure digital banking. With these offers, the classic banks will secure a distinguishing feature compared to neobanks and FinTechs.
The year 2021 will be all about the consumer. The customer should be able to decide for himself how and by means of which technology he would like to contact his bank. Every customer journey should be tailor-made.
In addition, access to cash will remain an ongoing issue. But given the impact of COVID-19 on all industries, those involved will have to work harder than ever to find workable solutions.
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