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techsuch May 9, 2021 0 Comments

The Top 5 Retail Banking Technology Trends of 2020The subject of uplifting routine technology has become one of the majorranking issues impacting the retail sector. The worldwide trends in financialtechnology are shaking up the retail banking sector from inside out that’s whyit has become the major concern of the retail bankers to cope up with the newtechnology and trends. The digitization, customer-centric services, etcrepresent important priorities for retail banks. All these new technologiesand trends throw the light on sharing, openness, transparency as well as thechallenges the banking sectors must embrace to keep up with the increasingcompetition, tackle with the care for security and privacy and to keep up withthe soaring consumer expectations. MarcDeCastro, research director forconsumer banking engagement strategies IDC, states that open banking is themost significant banking trend in the industry.Now that’s the great news for the customers who are going to leverage new andpersonalized offerings and the banks who would realize their greateroperational efficiencies. The banking landscape would be completely changed inresponse to regulatory requirements and industry standards.# Top 5 Retail Banking Technology Trends of 20201: Open Banking or BaaS (Baking-as-a-service) 2: Always-On, ‘Invisible’ Banking 3: Intelligent Assistants and Voice Banking 4: AI-Driven Personalization Still on the Do List 5: Enhanced Employee Skills for Digital-First Banking## 1: Open Banking or BaaS (Baking-as-a-service)The consumer lives in the digital world and hence they would also want theirbanking experience to be digitals as well. Let’s take an example of Uber,Airbnb or Netflix that testifies this fact. In the retail banking business, weare going to witness the big trend that would accelerate in the year 2020. Amove towards open banking, which in its broadest sense encompasses the needfor banks and credit departments to respond to the soaring expectations andneeds of the consumer and provide them compelling end-user experience.Basically the open banking system would enable the banks to deliver theservices in broad value chains by leveraging fintech, startups, serviceproviders and solution software suppliers in concert. Many factors wouldenable this change like rapid acceptance of open APIs by banks and fintech tocollaborate at scale and the progressive regulation of this open approach inEurope, UK and wide acceptance in North America. The banks would shift theirapproach from just by being the builders of financial institutions to thecurators of Consumer-driven financial management services. Baas i.e banking-as-a-service would transform the competitive landscape and economic activitiesand operations of doing businesses.Hence, the retail banks would move towards the entirely new era ofdigitization containing roboinvesting, customer lending automation, clearingand settlement of cash and security transactions.## 2: Always-On, ‘Invisible’ BankingAs we are witnessing the entire business world is moving towards the post-digital age. But the question is are banks ready to embrace invisible banking?The traditional brick and mortar banks have made their way for the fintechinvisible banking. The customers no longer want to revolve around the bankingservices and waste their time. All they want are the services that they canintegrate into their lives and provide them seamless banking experience,convenience, quick and more fun – “ invisible” but what is it actually?In retail banking- we will soon witness the big trends and completedigitization that will accelerate in the near future- the move towardsinvisible banking. Where the banks would belong to an ecosystem that nearlyinvisible to the consumer’s expectations. Invisible banking is enabled by AIdevelopment, allows the interaction to be bespoke, meaningful as well ashands-free. The invisible banking is transparent with simple terms andconditions. It engenders support trust and enhances customers’ lifestyle byproviding insights into their finances whilst giving them value-addedservices.The emergence of the fintech challengers has disrupted the traditional bankingsystems, pressurizing them and many financial institutions to digitallytransform themselves and also shifted the whole focus of consumerexpectations. The traditional banks combined with the invisible banking haveprovided many benefits to the consumers in the areas like: * Onboarding, the onboarding has made the process of banks to board a customer easy. Which earlier used to take days can be done on the same day. This also because of the next-gen KYS processes and immediate issue of virtual cards. * Interactions, many fintech banks such as Monzo have realized the importance of customer interactions lately in order to build long term relationships and proactively taking part in creating online communities around their services and interacting with their customers more than 5 times per day on an average. * Notifications, by leveraging social media and in-app communication features, the fintech banks can now react to their consumer’s activity in real-time. Through this, they can not only advise them, but they can also enhance their financial well being, acting as an invisible financial advisor. However, in a way, the invisible banking concept is not new for somebusinesses like direct deposits in an example of invisible transactions. Butnow the scope is greater and speed has become much closer to immediate.## 3: Intelligent Assistants and Voice BankingAfter witnessing the rapid adoption of voice assistants among the consumers ithas proven to be imperative for all the banks and financial institutions toseriously integrate the technology into their services to provide top-notchconsumer experience.Some statistics helped build the case like: * The number of voice recognition devices like Amazon Echo or Echo dot has been increased by more than 70% in the U.S as stated by the research conducted by Smart Audio Report from NPR and Edison Research. * BOA has its personal smart voice assistant named Erica being used by millions of users since it made its first debut. * According to a research conducted by Capgemini stating that more than 1/3rd of the retail banking customers are preferring voice recognition assistance over in-person visits. These are examples of how virtual assistance has shown a willingness toincorporate. These statics shows the real picture of how the voice assistanthas offered new ways to simplify complex issues for customers. Additionally,it has reduced the need to use the mobile version of the application, thanksto the ability to ask questions in a more conversational manner. Theimplementation of voice assistants in the banks has also increased thetechnological availability for older people or people with disabilities. Ithas been proven to secure and supportive when it comes to customers’ bankingtransactions. They can now check on to their bank balance or transactionhistory and other bank-related activities just by giving a command.The voice verification technique has helped the bank customers to simply askfor the services, for instance, they can now complain about their lost ATMcards, or to make a payment, etc.The banks are regularly examining the voice identification technique varyingfrom consumer to consumer so that if a customer calls on the customer servicethe identity of that customer will be automatically displayed.All this clearly states the potential of AI-enabled voice assistants ordigital assistants remains untapped in the banking space to a great extent.## 4: AI-Driven Personalization Still on the Do ListEmpathizing customers and understanding their needs has become crucial in thefaster-growing world and the personalization approach can be very beneficialnot only to the customers but to the providers as well. The recent emergenceof Artificial Intelligence capabilities will help the retail banks to takeaction in real-time. Put it simply, the AI has reduced the exertion of bankersensuring the stability and growth of banks in the 21st century. Now they haveput their digital workforce to deal with the customer’s needs. AI has thepotential to scale customers’ data, revolutionizing the banking transactions.AI can easily observe, analyze and interpret the actions of the bank customers(with all due respect to their privacy) deliver rich experiences that willautomatically provide end-user experience and would generate customer loyaltyin the post-digital era. AI has increased customer satisfaction and trust byreducing fraud. The AI is comprised of intellectual sensors that detect anti-money laundering, detection of fraud, the risk involved in credit, etc. allthese massive AI capabilities have forced the retail bankers to apply itdirectly to the services. That’s why it has become crucial for banks andcredit unions to take the steps to delight customers. However one of the mainchallenges for AI is to find the balance between proactive insight andsecurity and privacy. Some studies state that consumers are more likely toshare their personal details and information with the banks on the conditionwhen they are being offered highly personalized services. A global surveyconducted by Capgemini stated around 44% of banking consumers feel that wayabout sharing their personal information with their banks.For some, it could be early to implement AI in the banking systems, in termsof personalization, but there are many who feel its the right time to leveragethe potential of necessary technology and build expertise.## 5: Enhanced Employee Skills for Digital-First BankingThe new and emerging technologies have not only influenced the banks orcustomers they serve but also to the workforces of these banks. To put itsimply, after witnessing the upgradation in technologies, the banks will haveto work on the enhancement of technological knowledge of their existingemployees or replace the workforce, with those who are acquainted with thelatest technological trends.According to research conducted by Accenture, the retail banking workforce ismore technologically upgraded than their institution, compelling the workforceto wait unless their organization gets acquainted with 21st-centurytechnological trends. Putting the banking institutions into the risk ofclosure or decreasing their market value.This is why all these latest needs have compelled the Banks and financialinstitutions to invest in the enhancement of the knowledge of the existingworkforce. Hence, the combination of the employee’s skill set and the latesttechnological trends will not only support the AI ML emergence but will alsoaccelerate the growth of banks and credit unions.# ConclusionThe emergence of all the new technologies and trends would bound to have asignificant effect on the retail banking sector. AI is going to transform howcustomers interact with the banks and how the retail banks would conduct thebusiness. An investment in AI would be essential as it truncates the relapsingof the retail banking industry and helps set up the banking enterprise aheadof the competitors. It’s also important for retail banks to prepare theirexisting staff for these changes by presenting them with career and trainingopportunities, this is going to help them develop the skills and knowledgeneeds to transition to roles that leverage AI.Hence, the Banks should be prior to keep up the pace with the latestupgradation and technology.

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