Top tips is a weekly column where we highlight what’s trending in the tech world today and list out ways to explore these trends. This week, we’re sharing a few tips on how cutting-edge technologies can transform banking.
The latest advancements in technology have improved banking in numerous ways. Cashless payments and digital banking have gained immense popularity in the last few years, so that traditional methods of banking are almost obsolete. Fewer people now update their passbooks, withdraw cash, and write checks. Most, if not all, banking services have been taken over by technology.
Smartphones have also played a crucial role in the rapid adoption of digital banking. Now, users can transfer money, check their account statements, and pay bills without the hassle of visiting a bank. Nevertheless, this represents only the initial stage. More and more banking operations will improve due to the emergence of these technologies. Let’s try to understand some of them.
1. AI for customer experience: Personally, I don’t like to wait to address an unresolved issue that requires my immediate attention, and especially if it relates to a financial matter. Let’s be honest, it’s not possible for customer service representatives to respond within seconds when they have multiple queries at hand. But that’s the expectation of most customers. With the help of AI-driven chat bots and virtual assistants, it’s now easier to meet this expectation. Today, you can deploy a chat bot to resolve queries related to mobile app logins, password resets, loans, mortgages, and more.
According to Accenture, AI has the capability to increase the profitability of 16 business sectors by 2035. It’s a no-brainer to deploy AI to elevate the customer experience as most customers view their requests to the banks as critical and urgent.
2. Biometric authentication for improved security: Biometric authentication methods, such as fingerprint and facial recognition, are widely being integrated into smartphones. In banking, they can be used as an additional layer of security in mobile banking apps, know your customer, ATM and more for secure transactions.
For a user, the hassle of remembering complex passwords is eliminated if these authentication methods are used. Moreover, passwords are prone to social engineering attacks. This year, two Nigerian cybercriminals swindled 2.5 crore rupees in India by sending a phishing email. Apparently, they used a keylogger software. Passwords can be easily identified by using this software, but if biometric authentications are used that’s not the case. Biometric authentication methods use characteristics unique to an individual which are very hard to replicate, making it more secure than other authentication methods.
3. Blockchain for faster and secure payments: The most controversial technology in banking is blockchain. Many people consider blockchain to be unsafe. This is mostly because of the lack of understanding of what blockchain actually does and means. But some high profile security breaches of cryptocurrency exchanges have contributed to this perception.
Contrary to popular belief, blockchain is very secure. There are fewer chances of unauthorized access and fraud as the blocks are interconnected to the network and very hard to tamper with. Traditional methods of international bank transfers face delays as there intermediary banks to verify information and complete documentation, but with cryptocurrency that’s not the case. All transactions are peer-to-peer and there’s no need for intermediary banks, so the result is faster transactions.
There’s a lot of potential for emerging technologies in banking. More technological advancements will follow and, hopefully, these will make impactful improvements too. To gain a competitive edge over your counterparts, it is essential to discover ways to incorporate new technologies—like AI, biometric authentication, and blockchain—into your system to make banking more safe and secure.
