If you are expecting a revamp in the financial services sector this year, then there is good news for you. Financial services are expected to undergo a digital transformation. We are set to see changes this year in banking giants, most of who are operating with legacy era and brick mortar approach since decades.
Customers now have a wide range of options in banking, which makes even the most established financial institutions update themselves in order to stay ahead and relevant.
This article describes the most important digital transformation trends that are expected to take over the financial services industry in 2019.
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I don’t remember the last time I set foot at a bank branch! In today’s digital banking approach, we can transfer funds and apply for loans online through mobile banking. Yes Bank has introduced cheque pick up facility. You just have to call the bank and they send an executive who comes home to pick up your cheque for clearance.
Most US banks have provided customers with a facility of mobile cheque clearance. In this, you just have to upload a photo of the cheque, a banking officer would then attest it online and then it would be sent for clearance.
Many Indian banks are keen on introducing cheque truncation at the customers’ end. RBI rules state that a banking official must attest the image of the cheque. ICICI and IDFC banks have installed cheque scanners at customers’ premises like utility companies.
Today’s banking customers are not interested to walk into a pretty looking building for making transactions, rather they want a 24*7 user friendly mobile application with minimal human interaction.
Mobile Pay is gaining popularity each day. Not many Indian shops accept Mobile Pay as the shopkeepers prefer the payment to be made in cash. With a large customer base preferring to go cashless, it is inevitable for shopkeepers to accept mobile payments, else they’ll lose customers.
The launch of BHIM (Bharat Interface for Money) and UPI (Unified Payments Interface) has facilitated mobile payments in India. Paytm, PhonePe and Google Pay are the popular mobile payments applications in India. Many vendors offer discounts and cashbacks if the payment is made through Mobile Pay.
The trend today is, almost everything related to financial sector and banking is going mobile. This includes even third party financial service providers that are competing with banks. These are unconventional lenders, financial managers and simple financial budgeting apps. In 2019, banks must consider integrating with these third party services to eliminate the middle men.
As a whole, last year was a big letdown for blockchain. It is expected to see a considerable growth this year, not only through bitcoin or any other cryptocurrency, but also in banking. Blockchain would prove to be an asset in digital payments, loan processing, third party wealth management and any other area where sensitive information and currency needs utmost security. It is expected to see the implementation of blockchain in the regular technology to automate processes that must meet certain guidelines before execution.
Artificial intelligence (AI) is playing a big role in almost every industry. AI is set to take over wealth management and replace humans with wealth bots. With the use of complex logic and algorithms, AI driven wealth bots can calculate and suggest the best suitable investment opportunities based on the interest rate and other parameters. Wealth bots can do almost everything that someone must do to stay on top of their investment prospect. Financial planners must think of implementing AI driven bots in their business, else they you would fall behind. You must be flexible in adapting new technologies to remain competitive in this soon to boom industry.
In the modern world, data is the base of all businesses. It’s not enough to just have data; you must also have tools to make the most of the available data. Banks and financial institutions must have machine learning tools to make use of the available database. This would enable quick and accurate processing and allows banks and financial institutions to better serve customers. Big data also saves time and money, and helps make money in an efficient way.
Have you ever thought of this? You submit an online application thinking it would be processed automatically and quickly, but later you find that a human is assigned to do this work. This human who is in charge might not do his or her work on time. If this is the case then you could have sent the application through the post or courier. Modern banks and financial institutions are in a position where they must update their back end with latest technology and automate services that are offered on the front end. In banking sector, there are so many legacy era processes that must be updated with the latest technology.
Digital transformation is expected to take over the financial services sector this year. Digital transformation would be beneficial for the sector as it is efficient in terms of time and cost. There might be a few hiccups in the process, but we must tolerate this as it is going to serve us in a better way tomorrow.
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