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With too many disruptions like Brexit, US elections and India’s demonetization in 2016, banking sector has tried saving its grace from the very beginning of 2017. Fast-changing commerce models has left nations around the world to take note and allow their banks to involve and indulge in new patterns and add ‘hospitality’ in its financial services. Biggest banking trends in 2017 include Chatbots, advanced machine learning, Artificial Intelligence (AI), blockchain solutions and the Open API banks. With technological inclusions taking place exceedingly the banking sector anticipates more disruptions (a commotion of sorts is most likely to take place) in 2017. Leadership plans along with long-term visions need to be set for constructive banking sector (BFSI sector as a whole) goals.
Entry of Chatbots
With established technologies making their foray into financial services, 2017 is being predicted as the year of ‘BOTS’. New voice commerce and robotic process automation are being considered as one of the biggest dominators in India, U.S, Singapore, Europe and the Middle East. Leading banks around the world are fast picking up IoT data and robo-advisors for more intricate banking experiences.
Chatbots are not yet considered cost effective, neither are they widely available now. But soon (as predicted by BFSI industry experts) it will be made appropriate for automation and reinvented customer experience. Chatbots combined with AI are bringing back personal tones in B2C dialogues. Companies like Amazon, Apple and Google have experienced massive growth by including these two technologies for consumer adoption. Banking services performed via mobile apps are slower and less engaging than chatbot offerings as the latter brings in more private and better engaged communication environment with itself.
Banks can perform the following set of actions in a single chat with a customer:
- Get customer feedback.
- Assist onboarding.
- Help someone take important financial decisions.
- Upsell their products.
- Provide significant and time sensitive transaction-oriented information and alerts.
- Handle complaints.
- Listen to personal concerns.
- Carry out trading, buying and selling of shares.
- Offer customer loyalty points and related benefits (if any).
Chatbot has not yet turned into the face of banks but it can surely replace various manual and repetitive banking burdens. For bankers ‘conversational commerce’ is the most important thing to be considered. Chatbots can be utilized in providing specialized functions that include performance based on actions depending on information.
Advanced machine learning and Artificial Intelligence (AI)
In an era when technologies are converging to come up with bigger and better innovations, AI remains in the heart of it all. Whether it is Natural Language Programming (NLP) or Internet of Things (IoT) or data sciences & automation or Optical Character Recognition (OCR) – AI will be the connecting dot that will make structural changes in financial processes and operatives.
Several banks have carried out KYC and onboarding processes with the help of AI. Wealth Management industry is most likely to take up robo-advisor and algorithm-driven investment approaches.
High frequency trading requires faster result generation which is impossible for human financial advisors to carry forward with. A hybrid robo-advisor brings with itself faster engagement and better one-to-one communication. Complex financial management and banking processes are smoothly carried out by bots (based on AI engineering). Hybrid robo-advisors are able to give long term financial plans and help people take life-decisions on children’s education funds, etc based on their asset quantification power, which is much higher than human advisors.
Robo advisors might well be the solution to customer related problems such as loyalty and retention. With generation Y choosing faster economic transfers and processes, efficient technological banking adaptations are on their way. According to banking industry reports, every year $1 trillion is inherited by new generations. Individual net worth is also exceeding every year. $56 trillion is the global value of individuals’-net-worth.
By the time we reach 2020, USA will reportedly have millennials and teenagers acquiring 50% of all existing assets.
A report presented by PWC in 2015 suggested that wealth transfers and asset attrition rates will rise high in the coming years.
‘Blockchain’ Solutions will soon be an integral part of Mainstream Banking
Blockchain solutions will reportedly go mainstream soon. However 2017 will probably not be the year for this technology to go live. According to a report published by Greenwich Associates, the capital markets blockchain received a generous investment roughly amounting to $1 billion.
Gartner has also stated that ‘blockchain’ has reached the “…peak of inflated expectations…” Global search volume stood at an all-time high in June 2016. It will see banks working together and leveraging blockchain accelerators to bring out pilot programs and proof of concepts.
Financial institutions that are technologically bent will come up with customer-focused financial processes in 2017. A major opening of opportunities will soon take place where technology and finance vendors will fast-track blockchain programs.
Blockchain will soon be an integral part of mainstream banking.
Open API Bank
The mobile app marketplace has been revolutionized all over again. BFSI (Banking Financial Services and Insurance) industry is gaining momentum, added vigour and agility with each passing day. Financial apps are being made day in and day out. Numerous organizations are entering the app marketplace. This makes it suitable for Open API banks to come into clear picture.
The very popular Open API programs are important places for latest fintech banking processes and business models to be introduced.
‘Unified Solutions’ seems to be the light of the day for everyone (working within BFSI industries). Open and digital banking empowers everyone. Fintech expert Ron Shevlin has come up with a term – ‘Platformification’ which according to him is all about supporting multi-channel, open and unified integration. The synergy between BFSI partners and channels accentuate process deliveries, service qualities and nature of transactions.
A rough industry estimate suggests major growth in API platforms. Broader capabilities in loyalty, financial management, marketing, customer communication management, analytics and payments are foreseen in the upcoming months. Major banks will soon include more digital banking API platforms in their processes.
2017 will be a year of hard core competition between banks. With chatbots the overall banking dynamics is all set to change. A commotion of accelerated banking and disruptive digital transformations will brighten up 2017, bringing it out from the mundane BFSI processes. These technological financial inclusions will reduce costs, drastically change levels of service and automate traditional banking processes. Dynamics of market leaders will also change due to the changing demands for better enabled financial services (demands brought about by rich teenage population, millennials and young wealth heirs).
Senrysa Technologies Private Limited has come up with Aadhaar enabled payment apps and provides financial solutions to millions in India’s RRB sector. There are numerous digital payment processes being planned and in our pipeline for future launch. The organization has been in line with the latest commerce models being included across the globe.
Global economy has gone through paradigm shifts over the last few years. Banking and Finance known as the two most significant factors of economy, have also inevitably gone down the hammer of change and transitions. Traditional methods like customer visits to the offices have updated with the inclusion of mobile device operations. In the US, banks have reported to have 53% of mobile usage in customers. While in most Asian and European nations, customers have shown strong preference in using apps, online payment and transaction tools. According to a demographic survey, people in the age group of 25 to 35-year-old have been found to be the heaviest mobile device users across the globe (for banking and finance related actions).
Workplace environments have also transformed drastically with quicker engagement brought about by enterprise mobility. Some of the advancements that have taken place (due to enterprise mobility) in banking and finance domains over the years have been discussed here:
Significant transformations in banking brought about by Enterprise Mobility
Advanced mobile banking facilities have resulted in the successful journey of enterprise mobility. Some of the most significant changes brought about by enterprise mobility in in finance and banking sectors are:
• Technology-friendly customers using Mbanking services remain updated on the bank’s latest offerings, financial services and various together important details.
• Bank employees have upgraded themselves by using smartphone and tablets instead of desktops and laptops.
• Banks tie up with IT and mobile app development organizations to bring out apps that empower customers to carry out faster and more efficient account management across all locations.
• Numerous security checks make it easier for customers to continue performing secure banking and finance related transactions around the world.
• Customers use their mobile devices to execute important financial processes and actions through mobile apps and websites run by financial agencies and banks.
A yearly survey carried out by Bain & Company quite rightly brings out the actual facts and figures of mobile banking and its penetration around the world.
• Bain’s findings suggest a steep rise in mobile banking customers in the US from 21% in 2011 to 32% in 2012.
• Growing number of young entrepreneurs have given rise to greater shifts in mobile banking in the US.
• Asia has reportedly witnessed a high percentage of mobile banking’s penetration in the phase between 2011 – 2012.
There are more than 7000 US financial institutions offering specialized mobile banking services to their customer base. Industry insiders have suggested the percentage of smartphone and tablet banking for financial management to increase with each passing year.
In another report (a collaborative effort) published by Cognizant and Monitise, customer benefits, banking services, customer expectations and customer preferences are likely to undergo proper categorization to be carried out by financial establishments.
To sum it up enterprise mobility has spread its reach far and wide in banking and finance sectors. With continuous surveys being carried out the message seems to be clearer and louder – Banks and financial institutes need to keep upgrading themselves in order to get a stronger grip on mobile-friendly customer bases. Mobile banking and enterprise mobility processes are inter-connected and their collaborative efforts will reflect on global economy.
Senrysa Technologies has numerous enterprise mobility efforts and operations to its name. It has collaborated with private and public banks. Its own workplace environment is also in line with enterprise mobility quests.