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techsuch May 9, 2021 0 Comments

The 7 Biggest Technology Trends To Disrupt Banking & Financial Services In2020Even though banking and financial services have been slower than otherindustries to adopt the latest technology into their operations, financialorganizations are trying to catch up by incorporating artificial intelligence,blockchain, and other technology to benefit their customers, remaincompetitive and improve business results. Here are the 7 biggest technologytrends that will disrupt banking and financial services in 2020.The 7 Biggest Technology Trends To Disrupt Banking & Financial Services In2020Adobe StockArtificial Intelligence (AI)Although banking and financial services tend to be slower to adopt newtechnologies, a PricewaterhouseCooper study confirms the majority of financialservices decision-makers are investing in artificial intelligence (AI)—52percent of executives confirmed they are making “substantial” investments inAI while 72 percent believe it will be a business advantage. One thing thatwill likely make the rest believe in artificial intelligence’s potential forthe industry are the cost savings that are expected to be $447 billion by2023.So, how do financial institutions use artificial intelligence? The mostvisible way the banking industry uses artificial intelligence (AI) is forcustomer service from chatbots and robots. Many of the largest financialinstitutions, such as Bank of America and JPMorgan Chase, use AI to streamlinecustomer service. Another customer-facing way AI is deployed is to facilitatemobile banking that allows 24/7 access for consumers to conduct bankingoperations. AI is also instrumental in the way financial institutions enhancesecurity and prevent and detect fraud. The technology helps financialinstitutions with risk management and lending decisions and is foundational inmaking other technology such as big data analytics, robotic processautomation, and voice interfaces work.BlockchainBlockchain technology, first used in the cryptocurrency Bitcoin, is adistributed database that can keep track of transactions in a verifiable andpermanent way. The Harvard Business Review predicts that blockchain willdisrupt banks the way the internet disrupted media. Blockchains aretransparent, highly secure, and are relatively cheap to operate. As morefinancial institutions realize how blockchain can improve security, savemoney, and improve customer satisfaction, more will adopt the technology.Blockchain can support banking in several ways. Bitcoin showed how it can beused for payments, but it can also be transformative in the way our capitalmarkets work by tokenizing traditional bonds, stocks, and other assets andputting them on public blockchains. Blockchains would remove the gatekeepersand third parties in the loans and credit system while also making it moresecure to borrow money and lowering interest rates. Blockchain could alsoeliminate manual data reconciliation for bank ledgers. The way information andmoney are exchanged today will be altered by smart contracts that operate fromblockchain technology.Big DataOne of the ways to determine a technology’s influence on an industry is tolook at how an industry is investing in it. The banking sector is currentlyone of the top investors by industry in big data and business analyticssolutions according to the IDC Semiannual Big Data and Analytics SpendingGuide. The amount of data generated by the financial industry—credit cardtransactions, ATM withdrawals, credit scores—is mind-boggling. And being ableto put that data to use to make business decisions and process it effectivelyto glean actionable insights will be critical to staying competitive in thefuture.Financial institutions can use big data to learn more about customers and beable to make business decisions in real-time including learning about acustomer’s spending habits, sales management such as segmenting customers tooptimize marketing as well as product cross-selling, fraud management, riskassessment, and reporting, and customer feedback analysis. Not only does bigdata analysis help identify market trends, but it also helps financialinstitutions streamline internal processes and reduce risk.Robotic Process Automation (RPA)Since robotic process automation can save labor, operational costs, andminimize errors, many financial institutions are starting to leverage thistechnology to create the best possible user experience for customers and toremain competitive. In RPA, software is programmed to enable robots andvirtual assistants to complete repetitive and labor-intensive tasks correctlyand quickly without human intervention.RPA, through customer service chatbots helps banks deal with the low-priorityqueries from customers such as account and payment questions to free up humancustomer agents to deal with the high-priority concerns. In insurancecompanies, RPA is used to automate parts of the claims-handling processes.Another way RPA influences financial institutions is to help ensure compliancein the highly regulated industry. Today, thanks to RPA, customers can get adecision on their credit card application within a few hours but sometimesalmost immediately after they submit the information. It’s also optimizingmortgage processing.Cloud ComputingCloud computing is technology for storing data and delivering computingservices, including servers, databases, networking, software, analytics andmore over the internet. When an individual or a business wants to use thecloud, they will pay a cloud provider based on usage with pay-as-you-gopricing.Cloud computing makes 24/7 customer service from anywhere possible. Inaddition, cloud computing enhances the agility of financial institutions andmakes scaling up services easier and quicker. Since they only pay for servicesthey use, cloud computing can help financial institutions control costs. Cloudcomputing also enables secure online payments, digital wallets, and onlinetransfers.Voice InterfacesChatbot solutions, enabled by sophisticated artificial intelligence, are beingdeployed by financial institutions to reduce costs and meet customers’expectations regarding quick response and effective issue resolution.Traditional forms of two-way communication such as email, phone, and text canbe replaced with a chatbot. By 2020, chatbots are expected to handle no lessthan 85 percent of customer service interactions, according to Gartner.Chatbots offer a nearly instant conversational experience that that can bepersonalized, so customers get premium service expeditiously. Bank of America,Capital One and Wells Fargo have used chatbots for years for simple accountqueries, but today’s advanced chatbots could even offer financial advice. Botsare also able to provide centralized financial management over the multiplechannels that customers interact with their financial institution, correctingwhat had in the past felt disjointed. This technology continues to improve andwill empower customers to connect with their bank on their terms.Cyber Security and ResilienceIn an industry dealing with sensitive personal and financial information, andthat’s an attractive target of cybercriminals, security is paramount forfinancial institutions. It would be a good idea for financial institutions toassume there will be a security breach and plan for how to minimize thedamage, because preventing all cyberattacks is nearly impossible due to thediverse ways consumers interact with their money and the numerousvulnerabilities that exist regardless of how much time and energy is put forthto prevent cyberattacks. From mobile apps and web portals to third-partynetworks and even susceptibilities introduced by employees and customersthemselves, safety is never ensured even if you can thwart an attackperiodically.Financial institutions must do more than invest in technical measures toprotect against cyberattacks. They must share knowledge and best practiceswith each other, work with governments to ensure cybersecurity is prioritized,be proactive about educating employees regarding their cybersecurityresponsibilities and the importance of following protocols, and reaching outto the public to help them understand the situation and their role in keepingtheir personal data safe.

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