Industries are evolving, and so is the banking landscape. Thankfully, the more advanced technologies are revolutionizing the way customers engage with their finances.
This is perhaps for the first time that the banking and financing industry has started taking the customer experiences so seriously. More and more banks are focusing on meeting the customer needs in creative and innovative ways. This is also because various banks like Atom and Monzo have set the standards high by delivering more personalized services to the users, thus making it a kind of compulsory for other big players to improve their game.
The Digital Revolution in Banking Industry
It is not all of the sudden that the banking industry has been hit by the Fourth Industrial Revolution. Instead, there are various factors responsible for the digitally driven growth of the industry.
To begin with, the expansion of mobile internet which has enabled more than 3 billion people to access the Internet on the go is worth consideration.
Next, the introduction of social media networks and services like Facebook, Uber, Airbnb, and YouTube transformed the business landscape entirely, which made almost imperative for the banks to meet the ever-growing customer needs.
While the financial organisations were still stuck with their manual processes and old legacy systems, the rapid introduction of digitalisation in other neighboring industries worked as an inspiration for the banking industry.
So, What All is Changing?
The banking industry is changing the way banking is done, one milestone at a time. The recent introduction of PSD2 regulation (Payment Services Directive 2) is one such example which aims to provide more powers to the customers.
As the Partner and Head of Capco’s UK Digital practice rightly said that flexibility, speed, and convenience are no more seen as attractive add-ons. These are what a bank is expected to deliver anyhow. The more successful organisations differ from others by focusing more on the customers’ demands and needs with the right introduction of digital products.
On the same lines, the recent introduction of P2P technology powered by Blockchain is leaving no stone unturned in transforming the finance industry as we know it. This is what could be termed as a game changer.
It is important to mention that large banks have a massive amount of data which can be put to great use to drive useful conclusions and serve the customers better with the use of artificial intelligence (AI). This is pretty difficult to attain for small and startup banks which are starting from ground zero and are still building their data.
There is no denying the fact that financial startups are capable of developing better technology and training the algorithms better. However, this still would not be enough to overtake legacy banks when it comes to providing customer-oriented services, all because legacy banks have access to a large proprietary data which startups might be devoid of.
This is a vicious cycle – AI helps you improve the products and services by making use of the data you have access to, and since you offer best services, you are used more by your customers. This creates more data, which again help in improving the services, and so on.
How are Big Players Taking up the Challenge?
More and more Fintech startups and banks are taking an interest in the blockchain technology. On an average, 1 billion USD were invested in 2015 in Fintech startups. This poses a high risk for the big players who have openly accepted the challenge.
Various banks and other giants of the industry are actively working on blockchain and other digital technologies. Some of the big projects that are in the pipelines include R3’s blockchain consortium, the Utility Settlement Coin and the Hyperledger Fabric project by IBM.
That said, blockchain can help the banks in reducing and eliminating the settlement times while also ensuring the safe processing of transactions. What’s even more? In the future, people might not need to visit banks, or they might not require banks. All they would need is a computer software to make payments and it is done, all thanks to the blockchain technology!
Thus, it can be concluded that blockchain technology along with AI, and other digital technologies are advancing the finance and banking industry, and making way for better customer experiences.
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