Transformation in tech is inevitable. With the massive tech transformation in every sector, the finance industry is also undergoing the same. Enhanced banking technology can increase operational efficiency and customer experience.
For instance, banks use AI-powered KYC solutions that can make customer screening a hassle-free task. Plus, blockchain-enabled financial transactions can streamline financial operations by improving transparency.
Despite the security concerns in the financial sector, the results are impressive for finance companies. Making well-informed decisions and embracing innovations is a way to stay ahead of the curve.
With the rise of new tech trends – Let’s dive deep and see some banking and tech innovations that could determine the change in the financial sector in 2024.
1. Open Banking
With Open Banking – you can share your financial data to access ingenious financial experiences. Simply put, you give access to your bank to access your data.
Plus, you can share data with financial providers to empower your data for your benefit. Also, these financial providers provide a range of fintechs and digital platforms.
Open banking can include account aggregators that allow the management of bank accounts through a single platform. In addition, APIs from banks allow non-banking financial companies (NBFCs) to integrate into their applications.
Open banking can enable banking as a service (BaaS) to reach new clients through banks and third parties.
2. Banking Process Automation
Automation in banking is a game changer. Through robotic process automation (RPA), banks can automate repetitive tasks with software bots. Secure your funding round by showcasing how your fintech innovation disrupts the banking landscape. Further, banks can integrate with RPA and machine learning to handle complex processes, adapt to real-time data, and understand human language.
You can scale up your operations with RPA and cut down on expenses. According to a report by Deloitte, you can reduce up to 30% of costs after RPA deployment.
The best part about RPA is that it reduces human error as it systematically handles allotted tasks. Additionally, banks can use the technology to detect suspicious transactions and process credit cards. You can use automation for fraud detection and know your customer (KYC). Cryptocurrency investing could see a surge with banks embracing tech innovations and offering secure custody solutions.
3. Hyper-Personalized Banking
A tailored experience for customers can go a long way to maintaining a good customer relationship. Here’s when hyper-personalized banking can help. With the innovation – you can understand their needs and preferences to gain data and analytics.
In other words, hyper-personalized innovation is messaging in real-time using Artificial Intelligence and Machine Learning to process customer events and activities.
Besides offering bespoke services like omnichannel banking, it helps in AI-driven recommendations. You can move toward hyper-personalization by knowing your customers, understanding customer data (descriptive and predictive insights), and planning action based on deep insights. The innovation can elevate customer satisfaction.
4. Neo Banking
Is Neo banking the future of banking? Looking at the innovation, possibly it could be in the future. Neo-banking innovation has truly revolutionized the banking sector with seamless digital experiences through applications.
Besides catering to diverse customer segments, it caters to SMEs. Moreover, it is reshaping the way businesses interact with financial services.
Apart from offering integrated banking experiences to customers through API and cloud, it enables digital presence by minimizing operating expenses. Unlike traditional banks, these banks operate online with seamless advanced tech and a user-centric approach.
Beyond this, Neo-banking provides services through intuitive mobile applications, including payments, savings, etc. Neo banking is a trend to look forward to in the coming years.
5. Immersive Technologies
Immersive technology has found several use cases in the financial sector. Banks use the technology to enhance customer support and increase financial stability.
Augmented Reality (AR) and Virtual Reality (VR) have well-defined roles in immersive tech. The optimization of these technologies can increase interaction between customers and banks.
Virtual Reality (VR) allows banks to train employees on banking tasks and regulations through interactive environments. Also, metaverse banks help customers to interact with banks in different virtual environments.
By using the technology, banks can engage in meaningful customer engagement to increase customer satisfaction. Most banks have started to invest in immersive technology to streamline their processes.
6. Quantum Computing
Quantum computing is the least talked-about trend, but its implementation in banking will change how banks work. Banks store large amounts of data, and processing and managing the data becomes tedious.
With the innovation, you can leap processing large chunks of data without limitations. Apart from offering efficient computing processes – it helps banks optimize portfolios to make accurate financial predictions.
The idea of quantum computing is shifting from classical bits of information – to quantum Bits, governed by quantum mechanics. Besides, quantum algorithms can solve many problems you cannot solve with conventional systems. In short, the technology assists banks in increasing cyber security measures and refining derivative pricing.
7. Cybersecurity in Banking
With online transactions, UPIs, and digital money, the demand for cybersecurity in banking has increased. Besides, it can safeguard customer data and user assets.
As banks deal with millions of transactions regularly, safeguarding those transactions is essential. Further data encryption tools reduce the data threat risks. Also, AI-powered fraud detection tools can detect suspicious activities and identify multifarious phishing scams.
Most banks use anti-hacking software to protect their network from unauthorized access to safeguard data. With cybersecurity practices, you can improve response and threat detection.
Banks are vulnerable to data theft, so cybersecurity practices can make a proactive difference in protecting customer data.
Read: How many dimes make a dollar?
8. Banking of Things
With Banking of Things innovation, you can apply Internet of Things (IoT) technology in the banking vertical. BoT leverages customer data to offer real-time insights that help deliver better banking customer experiences.
In addition, the tech can automate and streamline banking processes like lending and KYC. With that, it helps facilitate real-time event response.
The best part is that you can integrate IoT-enabled digital wallets into various devices, enabling customers to make purchases. These connected devices deliver customer insights and real-time data so the technology can mitigate losses. If utilized properly – BoT can revolutionize how things work in the banking sector.
Wrapping up
Quantum computing, Neo-banking, and Open banking are special mentions from the above list. Among other trends, sustainable and decentralized banking will transform the sector.
With the adoption of new technology, there is also a risk of security. When leveraging a particular banking innovation, you must know its use cases.
In addition, Blockchain and Artificial intelligence can refine the financial landscape in 2024. Automation in banking sounds good, but it comes with considerable risks you must know about. With the help of artificial intelligence, banks are streamlining Physician Mortgage Loans, making the approval process faster and more efficient. After all, it is the sensitive customer data you are dealing with.
Author’s Bio:
Harikrishna Kundariya is the Co-founder, Director, & Marketer of eSparkBiz Technologies – an excellent Software Development Company. Also, a notable IoT, ChatBot & Blockchain-savvy Developer.