Seven Emerging Banking Technologies To Watch
Contributed by Luigi Wewege At Caye International Bank
15 November, 2021
Technology drives change in every facet of life. It's certainly true for the financial industry. The way banks and other types of financial institutions manage tasks continues to evolve as faster, more efficient and more user-friendly methods emerge. Consumers find the ways they can manage their banking needs continue to expand. It's important to understand bank technology options and how they could benefit you. Some of them are already in play. Others may be on the horizon and could one day become preferred methods within the banking world.
Here are a few examples of emerging banking technologies that could affect how you interact with domestic and offshore financial institutions.
1. Digital Bank Account Creation
While some banks still require physical visits to branches to open accounts, that's changing. Many banks now offer a secure application process via their websites. Applicants can provide basic information, upload documents to establish their identities and provide the required opening account balances.
While this is undoubtedly convenient for domestic bank customers, it's also a boon for those who wish to open accounts with offshore banks. This technology eliminates the need to secure local agent representation to open an offshore account in many countries. It also means it's no longer necessary to make a trip to the country of choice to open an account in person.
Given the attention offshore banks devote to security and consumer privacy, completing the application process and receiving verification of the attached documents can often be managed in a few business days.
2. Application Programming Interfaces
While other industries were early adopters of application programming interfaces (APIs), the financial industry lagged. API software allows two applications to talk to each other. At times, this may involve introducing additional software to help support the security and strength of those connections.
The use of APIs in banking continues to grow. According to Cornerstone Advisors' "What's Going On In Banking 2021" report, more than half of credit unions in the United States have adopted API. Banks use APIs to gather analytics, personalize their services, transfer funds and much more. This type of innovation can enhance the efficiency of internal operations and improve the customer experience.
3. Cloud Computing
Cloud computing technology is widely accepted and used in the financial industry. Data is uploaded to the cloud rather than stored solely on local servers, server farms or those operated at a bank's headquarters. This safeguards information from natural disasters, etc. That data may include information about individual customers as well as business checking, savings and investment accounts.
4. Video Conferencing
Banks offer many types of financial advice, and the need may arise to have an in-person meeting to discuss retirement strategies or carry out other banking needs. Scheduling these meetings isn't always easy, and the pandemic has made it even more problematic.
This has led to many banks offering one-on-one video sessions to their customers. Customers can access the online meeting from home using an internet-connected device. The same is true for bank personnel.
Cryptocurrency has grown as an investment opportunity in recent years. These currencies typically rely on the use of blockchain technology. Designed for privacy and efficiency, this technology attracts more attention from bankers and those who operate third-party payment services. Today, it's possible to utilize cryptocurrency to pay for purchases from some vendors. Something different about cryptocurrency is it's not necessary to go through the usual bank process to buy or use it.
Blockchain is sometimes said to have the same impact on financial transactions as the internet had on how conventional media was shared. This technology delivers many benefits to banks, including a higher level of security against hackers, quicker transaction times and unchangeable historical records of transactions. These are only a few factors that have led more banks to consider integrating blockchain technology into their existing systems.
6. Person-To-Person Payments
Person-to-person payments, often referred to as P2P payments, have become more common recently. It's no longer necessary to go directly through a bank to remit or receive payments. Instead, it can be done using third-party payment services. Banks do play a role in this process, but it's more of a back-end arrangement. The result is that more banks are ensuring they have processes in place to receive deposits from and transfer funds to P2P services when and as the bank customer desires.
7. Robotic Process Automation
Robotic processes automation (RPA) technology makes it possible to automate many tasks that were once done manually. This approach can handle all the details associated with new account setups, verifying data submitted by a customer, conducting security checks, managing data analysis and even handling responses to customer concerns.
The role of artificial intelligence (AI) in using RPA is key to understanding how it works. Thanks to AI, it's possible to automate online chats with customers and manage other types of interactions. Expect to see more of this technology used at all levels of banking, with an increased emphasis on ensuring customers have positive experiences each time they contact the bank for help with their accounts.
Banking Technology Future
Where will these and other newer technologies eventually take the banking industry? Some of the technologies discussed here will likely be refined to ensure they provide the highest level of efficiency and service possible. Others may be replaced by technology that's not yet developed.
Be aware of what your domestic or offshore bank offers in terms of tech solutions that make it easier to manage your accounts and wealth.
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