If the financial industry has taught us anything in the past, it is that we can no longer postpone digital transformation in banks. Today, consumers expect to perform banking transactions from anywhere and anytime. The technological advancements that offer improved interface and inclination of customers for convenience drive the market of online banking. According to a research firm, Allied Market Analytics, the global online banking market is expected to reach $29.98 billion by 2023, with a compound annual growth rate (CAGR) of 22.6% during the period 2017–2023.
The increased demand for digital versions of the traditional bank has caused several financial institutions to seek out better solutions to securely digitalize their offering and transactions while maintaining low costs. The growth of smartphone usage and increasing internet penetration among consumers, especially in developing countries in the Asia-Pacific region are expected to transform the online banking market. However, customers have introduced to novel methods of online banking transactions in the last couple of months and some of the major trends are yet to hit the market. Few of them are mentioned below.
Experience the improved digital interface
In the last few years, customers have experienced a more interactive interface when it comes to interacting with a bank or other financial institutions. Moreover, keeping in mind the growth of online shopping portals, banks have been supporting the need for better transactional capabilities that go hand in hand with smartphones and other mobile devices. For instance, Apple and Samsung have released their dedicated payment options that are helping banks to be more focused and invest more in offering better mobile solutions for their customers. Till now, providing seamless banking experience have been a secondary aspect for financial institutions, however, this is expected to change, owing to customer’s inclination to choose those banks that offer 24×7 online support.
The advent of data analytics
In the past, financial institutes have ignored the value of artificial intelligence (AI), machine learning, and deep learning in the banking sector. However, the advancements of FinTech have opened new doors of opportunities, which enable financial institutes to use AI-based tools to improve user experience, streamline the process, and reduce operational costs. It is no secret that customers look for a proactive approach to financial planning. Thus, banks need to incorporate improved solutions to match with the demand for automation.
Today, big data analytics has become a major driver in the banking industry. The amount of data generated in the banking industry is expected to increase significantly in the coming years and big data analytics would be the most efficient tool to deal with the big data flood. This indicates that banks need to apply big data analytics in real time to make the necessary decisions to boost productivity and improve customer experience. Big data analytics could be used to discover the spending patterns of a customer, identify the most sought-after channel of transactions (credit/debit card payment, online payment, or ATM withdrawal), manage and prevent fraud, assess risks, and analyze customer feedback and apply the necessary changes.
The banks that blend well with such online retail sites would become the preference of customers, due to the growing trend of online shopping and online booking. Thus, banks are focusing more on launching mobile-friendly applications to increase the website traffic and engage as well as lure more customers. Several site owners and webmasters opt for this option to boost their site’s traffic and now, banks are also adopting this trend by investing more in AMP (accelerated mobile pages) to make the site more mobile friendly.
Recently, the United Overseas Bank (UOB) launched mobile-only bank, TMRW, to serve the tech-savvy customers of ASEAN. The TMRW flaunts its in-app virtual assistant that can chat and answer customer’s calls. UOB has launched the mobile app in Thailand as the country’s young demographic is mobile-connected and time spent on social media by customers is the highest. However, UOB is expected to launch the app in the other countries soon, starting with Malaysia and Indonesia.
Incorporation of biometrics
This is the era of biometrics and banks are likely to adopt this trend to improve security and prevent transaction frauds. In the coming years, banks would seek novel ways to add new security layers to their services, such as additional authentication methods to build digital trust with their customers. Financial institutions are now trying to incorporate facial recognition, voice prints, and biometric as it has become overwhelming to remember numerous passwords.
Recently, Oney Bank, a leading French retail group, and Wirecard, the global leader in digital financial technology, together implemented the first biometric payment system in Romania. Their new Well.com app allows biometric authentication payment by fingerprint scanning. The app is expected to be available in Hungary, Ukraine, and Poland to reach millions of customers.
Apart from fingerprint scanning, keystroke biometrics is expected to enter in the online banking market. The keystroke rhythms of a user create unique biometric patterns which can be timed and stored to match them for future comparison. As keystroke biometrics does not need huge capital intensive, it can be easily used as second generation biometric authentication.
To sum this all
If you compare the time when you used to visit banks with your parents with today’s banks, the picture has changed radically. Computers have taken over to perform the redundant tasks and most of the banking transactions can be performed online. The future is expected to be filled with AI-based applications and smart technology would replace the tedious task of remembering long and complex passwords.
Now, the online banking market is expected to improve using the rapid technological advancements and incorporation of smart technologies such as machine learning and big data analysis. The constant motion in the industry would lead to exciting and novel innovations that would reduce human error, security frauds, and improve the overall user experience. Some of them are already being implemented in the banks such as interactive gesture technology which greets the customers as they walk in and bring up an interactive screen that offers information regarding banks services. However, there are a lot of things that are yet to enter the market, for which we have to wait and watch.