Technological innovations in banking continue to transform all financial sectors, and this will explosively grow in the next five years. Biometrics and cryptography help preventing scams and frauds in banks to a great extent. With digital banking solutions, the entire banking operations become straightforward, and customers are allowed to operate their accounts anytime and anywhere.
The banks have entered the arena of Digital Darwinism, where technology is fast innovating, and organizations find it challenging to keep the pace. Internet of Things (IoT) is creating great ways to interpret data cost-effectively. Emerging technologies have transformed the way the banking operations were carried a decade ago.
Banks have adopted digital technology to serve customers and cut down the operational cost to minimal. The digital-only banks make it easier to manage the bank accounts and transactions without stepping into the branch. Digital-only banks offer an all-inclusive package of services such as opening an account, applying for loans, term deposits, mutual funds, insurance solutions among others.
Biometrics is considered a huge innovation in the digital arena as it safeguards banks from scans and frauds. It is one of the most important reasons responsible for the success of banking digitalization as an individual is uniquely identified using a set of biometric features. The distinguishing biological features such as a face, retina, ear, hand, voice are used to operate transactions and this eliminates entering multiple PIN codes and passwords.
Artificial Intelligence is used in many ways in banking for collecting information from reliable resources. It automates the banking process workflow and eliminates manual interference making financial operations more secure. Machine learning is the key component of Artificial Intelligence where the processes run on the predefined set of computer instructions. This results in improved business efficiency as the transactions are tracked automatically, and customer queries are resolved quickly.
ATMs have transformed the banking system since its evolution in 1967, and the next generation ATMs will allow contactless payments. Similar to Google Wallet and Apple Pay, the ATMs will begin to conduct contactless transactions via smartphones. The technical innovations such as biometric authentication used in India, iris recognition in banks in Qatar and face recognition technology in China has set new dimensions for the banking system. The overall banking security system has become more robust, providing a strong security layer for banks against frauds and scams.
Banks are consistently leveraging IoT in every possible sector and its integrated process. As an effective fraud measure, smartwatches are used to alert customers about the important information whenever the customer switches geographical boundaries. Wearable banking applications allow the customers to take appropriate action on alerts, find nearby ATM, make a transaction or track spending activities. In the upcoming years, the wearable technology will boost the adoption of digital wallet among people of all ages.