How FinTech is revolutionizing the banking sector?
In the wake of the Covid-19 crisis, financial institutions are witnessing the emergence of unique customer behaviors, such as the accelerated usage of digital financial services. Customers, who are hesitant to go in crowded public spaces, will need to find a way to conduct banking without physical interaction. By implementing innovative FinTech solutions, banks can efficiently carry out their daily transactions with limited disruption.
In the last few years, the adoption of Fintech has reached unparalleled heights. As per statista, the digital payment segment will touch $4,406,431 million US dollars (approx.) in the year 2020. Banking institutions, credit unions, and the FinTech unicorns are ready to welcome the FinTech technology.
This innovative approach will surely change the FinTech landscape in the future by offering multiple technologies like chatbot technology, machine learning, and Artificial Intelligence, messengers, etc.
5 ways FinTech is transforming the banking Industry
The growth of FinTech forced the banking industry to rethink how products and services must be delivered. Let us see how the Fintech is revolutionizing the customer’s payment journey :
- Omnichannel customer experience
With the innovation of advanced financial solutions, banks are shifting towards digital banking solutions from traditional banking procedures. They are integrating omnichannel banking modes to digitalize their financial transactions and sales.
Omnichannel is about allowing your customers to do online transactions from anywhere, on any device. Due to this 24*7 availability, banks can cut their costs by automating their daily transactions and boost their revenues by giving superior customer experiences.
With an omnichannel platform, banks can offer various services to its customers like money transfer, writing checks, apply for loans, and order credit cards via its agency banking solution.
It also allows real-time data synchronization between different modes. It means if a user initiates a transaction, he doesn’t have to re-enter the same information again, even if he uses some other channel.
It also helps the banks to integrate customer support centers in their mobile banking software and other communication channels to meet the increasing user expectations.
Chatbots are streamlining several customer interaction processes to be known as conversational banking. Banks can integrate Chatbots into their mobile banking software to continuously expand their app’s usability.
Some of the main advantages that chatbots offer for financial services include the prompt response to customer queries, landing the users to relevant web pages or service departments, and automating data collection. Chatbots will also benefit your customer care executives, as they can spend less time on the phone handling basic queries and focus on more relevant or complex tasks.
Even though some people still prefer human contact for several processes, a digital hybrid approach seems now easily viable and most likely to become the ‘new normal’ for financial services.
- Blockchain and cryptocurrency
Blockchain is an attractive opportunity for the financial business to streamline its procedures. It provides an efficient trading platform with increased transparency, and customers have been benefiting from cryptocurrencies for transferring money, reducing costs, and saving time.
Cryptocurrencies are successfully solving the constraints of traditional banking. For instance, crypto banks can anticipate data hacks more securely than traditional banks.
Cryptocurrency transactions are anonymous and secure. Let’s say if someone makes a payment using paper cash, there’s a possibility that the money could be counterfeit. This isn’t the case with crypto-cash as it is unable to counterfeit.
Thus these are some ways by which blockchain is revolutionizing the banking sector.
- Big Data
Traditional banks are still unable to compete with modernized financial institutions. Since customer transactions have now become online, many services provided by the traditional banks are no longer relevant to the growing customer needs.
That is why big data tools are necessary for the banking industry. It offers you with various features like tracking your customer spending, customer segmentation, personalized products, customer retention, effective risk management.
Using analytics-driven strategies and tools, banks can unlock the potential of big data and increase their revenues.
- Application of Artificial Intelligence and machine learning tools for fraud detection
Nowadays, banks are using advanced Artificial Intelligence (AI) and machine tools to identify suspicious transactions in real-time.
Some banking transactions are difficult to get noticed by the bank staff. These are called anomalous transactions. Sometimes these transactions happen to link with money laundering. Machine learning models can detect such transactions in realtime and send OTP to the user’s registered mobile no. to confirm they only have initiated the transaction.
Nowadays, banks are deploying advanced surveillance cameras on their premises and ATMs to detect suspicious activities to prevent thefts.
Banks can also integrate biometric security features like fingerprint, retina scan, facial recognition into their apps so that even if the phone falls into the wrong hands, the apps can be authenticated only by using the owner’s biometrics.
Fraud.net, Clear.sale, Riskified, Kount, Lexis nexis, etc. are some of the names of specialized AI-based financial fraud detection solutions providers.
The focus for banking institutions and financial services must be to keep a strategy that puts the customer at the center of their processes, to ensure a more seamless and omnichannel experience.
The digital revolution steered by fintech startups and players in the industry will create valuable partnerships, open innovation, and strategic investments that can considerably improve their operations in line with the digital revolution.
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