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Digitalization is bringing dramatic changes to the way people interact and conduct business transactions on a daily basis, while innovative technological developments continue to play a big role in the banking environment. The rising digital banking needs of millennials and Gen Z representatives is causing tectonic shifts in the operation of the global banking industry.
When we talk about retail banking, we are primarily referring to a specific range of services banks can offer to consumers. These include savings and checking accounts, credit and debit cards, as well as loans. The wish to access financial services via digital channels has facilitated the development of new banking technologies that are redefining the retail banking market.
As shown by Business Insider Intelligence, 39% of retail banking executives say technology has been highly helpful in reducing costs, while only 24% who find technology’s impact more significant for customer experience. Besides, launching Banking-as-a-Service (BaaS) platforms is helping retail banks to remain competitive, improving revenue streams and diversifying product range.
Mobile banking has become the go-to tool for making deposits, transfers, and monitoring spendings and earnings. Again, referring to Business Insider Intelligence’s Mobile Banking Competitive Edge Study, 89% of survey respondents are mobile banking users. One among the most valuable features mobile banking offers is money management that helps cut spendings and maximize savings.
There is one great concern that mobile banks users share – security. Cases when sensitive customer data was compromised stand out in people’s heads, which is the reason why such features as placing holds on credit or debit cards, scheduling travel alerts, and filing and review card transaction history are greatly desired and appreciated.
Another mobile banking feature is mobile wallets, which are convenient applications that allow users to make purchases online or in-store with their smartphones, eliminating the need to carry around a physical credit card.
The popularity of online banking has decreased dramatically with the introduction of mobile banking, as suggests the drop in the number of online banking customers worldwide. The research conducted by Business Insider Intelligence showed that half of all online customers are also mobile banking users.
However, some banks still fail to meet the demand for mobile banking features, such as bill pay and reward redemption, pushing users towards online banking. Among millennials and Gen Z representatives, though, online banking continues to have little popularity.
For what concerns neobanks, they are successfully reshaping the future of banking around the world. Despite a slow start in the US due to high regulatory barriers, recent developments and legislative changes seem to be fostering the steady growth of neobanks.
As neobanks begin to appear in the US, users’ attention will shift towards exploring digital only banking, leaving behind traditional banking competitors.
Main Trends in Banking Technology
No doubt, the vector of future development of banking technology mainly depends on the consumers’ needs and expectations, putting all the “responsibility” on Gen Z representatives, for whom technology is an essential part of their lives.
Currently, one of the main trends is the use of application programming interface (API) that opens the access to proprietary data to anyone who has the consumer’s permission to view it.
Banks integrate AI to improve and simplify customer identification and authentication, as well as customer service and support with the help of chatbots and voice assistants.
Business Insider Intelligence has reported that 48% of banking executives are convinced that new technologies like blockchain and AI will influence banking the most by 2020, streamlining processes and cutting costs and improving operation in other fronts.