Next Generation Banking- the Age of Digital Transformation in Banking
Digital banking is no stranger to most of us living in the 21st century. It has become more and more popular in today’s world. As the name implies, digital banking is banking carried through the online platform, with the use of digital devices such as computers, tablets or smartphones, as opposed to the traditional way of using paper documents and requiring people to be physically present.
The ability to access a wide range of banking functions from opening an account to paying bills just a click away using a computer or a smartphone is astonishing. Because of this, digital banking will be the future of banking. You will be impressed by how the recent digital innovation in the banking sector has provided a lot of innovative digital banking solutions to the problems you might be having.
DIGITAL TRANSFORMATION IN THE BANKING SECTOR
The world of banking is evolving faster than ever before. Digital banking is increasingly attractive to customers because it is convenient, seamless, and secure. Digital innovation is changing the way people bank and the way banks and businesses operate.
Online banking originated from the United States back in the 90s by Stanford Federal Credit Union, allowing its customers to access banking functions using their website. From the first physical banks to the first ATM to the first credit card processing machine, the banking system has not stopped innovating and has advanced incredibly compared to years ago. Digital banking innovation is necessary and should be improved continuously as an impact of digital transformation in banking.
As the internet and mobile devices became more popular and accessible, banks were encouraged to make the banking process easier and more available. The digital transformation in banking spiked the idea of creating mobile banking apps. As a result, today, banks can reach more people and provide more convenient banking services than ever before.
RECENT DIGITAL INNOVATIONS IN BANKING
Digital innovation in the banking sector has provided great innovative digital banking solutions to some common personal and business level banking difficulties. Some examples of recent digital banking innovations as an impact of digital transformation in banking include:
Instant Transfer
One of the greatest inventions as a result of digital transformation in banking is the use of mobile banking. With the use of computers and mobile devices, you can quickly transfer your money 24/7, anywhere, anytime to anyone without having to be restricted by bank working hours, unlike the traditional way of depositing cheques that might take days to process.
This is especially beneficial to business owners collaborating with different companies as you can now verify purchases instantly without having to take the risk of collecting invalid checks.
Fascinating statistics:
“To transfer funds between their own accounts or send money to someone, 48% of account holders use mobile banking, while 38% opt for desktop online banking.” (Deloitte)
Financial / Spending Analysis
Ever wonder how much you paid for utilities, insurance, employees’ payroll? Or perhaps the ability to identify the flow of your finances and money? Fortunately, with the rise of digital banking, keeping track of your transactions has never been easier.
Many mobile banking apps these days have the function of breaking down your spending into different categories to track your expenses, understand your spending behaviour, manage your money better, and make better financial decisions.
AI Chatbots
Ever had a problem logging into your banking account or trying to call customer service to have your problem solved just to be put on hold for minutes or even longer? With AI chatbots, you do not have to worry anymore.
Unlike the traditional way of talking to a customer representative to have your issue solved, most mobile banking apps now have a function called chatbots that make the process much easier and faster. Artificial intelligence-based chatbots can respond more quickly than humans and can answer numerous questions.
Fascinating statistics:
“According to a recent consumer banking trends study, the deployment of chatbots will save the banking industry $7.3 billion in annual customer service costs by 2023.” (Juniper Research)
APIs (Application Programming Interfaces)
Banking APIs are how banks interact with applications and services, and there is a massive surge of potential as technology advances. Banking APIs can help develop new applications and services for banks and consumers. In addition, they can help in data aggregation, data analysis, and data visualization.
There are four types of APIs adopted by digital banks:
Account APIs - Account APIs are how applications interact with bank accounts to track balances and transaction history.
Deposit APIs - Deposit APIs are how applications interact with bank accounts to deposit money into an account.
Withdrawal APIs - Withdrawal APIs are how applications interact with bank accounts to withdraw money from an account.
Cancel payment APIs - Cancel payment APIs are how applications interact with bank accounts to cancel a transaction.
EXAMPLES OF DIGITAL TRANSFORMATION IN BANKING
Digital transformation is a buzzword that has been floating around for some time now, but the size of the business opportunity it presents hasn’t been fully understood.
So, what exactly is digital transformation in banking? The simple answer to that question is the integration of digital banking technology into our traditional banking method. However, digital transformation is not just about adding new technology to your business, but also new capabilities. We’re talking about new capabilities to add value to your customers, to speed up your processes, and to add new sources of revenue.
Enterprises of all sizes and across all industries are facing the challenge of keeping up with the pace of digital transformation. The urge to integrate digital transformation in corporate banking is pushing business leaders and their teams to understand how to best leverage the benefits of new technologies and the adoption of new digital banking ideas to stay ahead of their competition and deliver new value to customers.
Below are some notable examples of digital transformation in banking. They are the prime examples of innovative banking features.
Robotic Process Automation (RPA)
With the help of different technologies such as robotic process automation, we can greatly improve the speed and quality of data processing. RPA is a software technology used to handle repetitive tasks without human participation.
By using RPA, we can leave the repetitive tasks to the computer and make sure the employees are focusing on high-return tasks. It helps reduce processing time as well as possible human errors.
Cloud Computing
Cloud computing is the use of the internet for storing, managing and accessing data on remote servers via the internet.
It is incredibly crucial in the banking industry as it provides banks with more data storage which banks these days need more as a result of the rise of the digital economy. Besides, it makes data transfer and digital transactions so fast, easy and secure.
Artificial Intelligence (AI) in Banking
AI technologies such as the use of Predictive Analytics, Voice Recognition, Biometric Fingerprint identification greatly enhance the banking process, making it more secure than ever.
CONCLUSION
With the continuous development of new technologies and the accessibility of the internet, the banking industry is slowly but surely transitioning into the full digital mode, so does the business sector. Business leaders must keep up with the latest information and new technologies to make sure that they get the most from the latest technology and to make sure that they are able to constantly meet customers’ needs.
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