The Changing Face of Banking across the Globe

The banking industry has come a long way from being largely personnel-driven around 5 to 7 years back to predominantly digital today. Rapid advances in consumer technology and the evolving expectations of consumers have transformed the business of banking irrevocably. A significant proportion of bankers rarely visit branches and even branches are progressing towards a customer-led service delivery model, aided by interactive touch screens providing information on the banks offerings, biometric authentication, virtual assistants and so on. This is the age of self-service banking; freeing front-end bank staff from day to day transactions to focus on providing services on the banks’ high end offerings and improving the overall customer experience.

To state that technology has played a major role in bringing about this transformation would be an understatement. Innovations in information technology and telecommunications have progressively brought banking to the consumers doorsteps, desks and fingertips.

Evolving customer expectations

The advent of cutting-edge technologies in the field of mobility and social networking has ensured that today's customers have access to any-time any-where information, supplemented with 'opinions' and 'feedback' from their trusted sources. Business models focused on leveraging user-generated reviews / opinions are proliferating with services such as Twitter, Facebook, Foursquare, TripAdvisor, Groupon, etc. Most of the millennial generation has been accustomed to engaging and interacting in their daily lives based on these practices. Customers today put more value on social currency and instant rewards.

This in turn is causing a rapid shift in their attitudes and expectations about banking as well. Whereas mobile banking was considered as an aspirational channel a decade ago, it is considered a hygiene factor by today’s customers. Banks without social media presence are considered antiquated. Customer expectations from their bank not only include a certain degree of transparency but also the ability to engage in a discussion about their financial growth prospects.

Disruptions across the banking lifecyle

All these innovations are collectively utilized by financial institutions to provide their customers an end to end experience benefitting both parties. Financial institutions reduce costs by not having to invest heavily to establish and maintain new branches, also freeing staff to devote their energies towards higher revenue generating avenues. The customer is the ultimate winner as a visit to the bank is almost completely eliminated as the entire life cycle from origination, to transactions, advisory and customer care is being provided virtually through their preferred channel at a convenient time.

Seamless Cross-channel Originations

Traditionally, account origination in banks has been known to be a cumbersome and long-winded process requiring extensive documentation. However, with the advent of new banking channels, the customer can open an account without having to physically visit the bank branch. Customers can choose the offering they wish to enroll into via mobile, desktop or ATM and submit the required documents electronically. The origination process can be initiated from one channel and completed in another channel. This capability allows customers to save an incomplete application and complete it at a convenient time using their preferred channel. Cross-channel origination has increased the banks reach exponentially and is serving as a significant enabler of financial inclusion. This technology can be used to originate simple offerings like saving accounts, credit cards or advanced offerings like loans.

Banking in the Customer’s Hands

With the evolution of mobile device technology, the banking customer today is in control of how and when he wants to communicate with the bank. Banks are trying to leverage technology by integrating augmented reality in their banking apps, enabling their customers to access information in the form of videos, animation and pop-ups. This is particularly useful for advertising and educational collaterals as the trigger images or QR codes can be embedded almost everywhere like print media, in-branch locations, flyers, online and so on. Animated avatars or personal assistants interact with customers across channels providing welcome messages and pre-feed messages automating day to day queries or FAQ’s. With the emergence of wearables, the next step in augmented reality would be offerings or applications designed for wearable devices.

Biometric and Electronic Authentication

With increasing incidences of online frauds, user names and passwords are no longer seen as safe leading many financial institutions to adopt biometric authentication for their online and mobile services. Biometric authentication utilizes fingerprint scanners, face recognition, voice recognition and Iris recognition. These scanners or sensors can be embedded in mobile devices, ATM’s and at physical branches to provide instant authentication as well as convenience to customers who no longer need to remember tricky passwords and codes. The use of biometrics has helped financial institutions increase their reach especially in reaching the unbanked adding spine to their financial inclusion initiatives.

Snap and Deposit

Remote deposit capture (RDC) and the Check21 Act are helping banks save time & effort in the check clearing process. Checks no longer need to physically reach the bank or travel from on bank to another. Mobile RDC takes it a step further as it lets every mobile banking customer of the bank deposit a check from any location using a mobile application and mobile/tablet camera. Banks have been providing their branches and businesses with check scanners enabling them to deposit and clear checks within the float period. This technology has also found acceptance in bill payment scenarios, mobile credit card swipes and document verification during origination or other banking processes. Many banks provide RDC as a value added service and derive revenue by providing this facility to corporate and retail customers.

These are barely a few instances of how technology has disrupted the banking space. Watch this space for more and more discussions on the rapid evolution of banking over the past few years and what the future may look like.

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