Five key innovations and trends that are delivering the future’s digital banking

The world is entering a historic era full of artificially intelligent assistants that give humans advice, self-driving cars that park better than humans, and mobile applications that submerge humans into virtual reality. With such modern innovations, digital banking is experiencing a brand new reality that redefines individuals’ perceptions of their finances. And with innovations like APIs, Cloud Computing, Biometric Technology, and microservices, investing in the dividend market has become easier. The following are five primary innovations delivering the future’s digital banking.

APIs

In today’s hyper-connected community, a bank’s growth relies on its capabilities to create and participate in digital ecosystems. The ability of a bank to internally and externally integrate its services and products with various applications and third-party services is a key prerequisite. And APIs make this possible. Artificial Programming Interfaces (APIs) allow two apps, software systems, or other online services to share data and communicate. In digital banking, APIs let different bank products communicate with third-party products or each other securely in real-time.

A good example is where APIs enable central banking systems to receive and process money transfer requests from card systems, payment switches, customers’ mobile wallets, third-party financial servers, and more. Today, banking customers want seamless integrations between all types of channels, devices, services, and applications. A bank can develop an omnichannel, first-class connected experience with a good API strategy.

Highly developed self-service capabilities

In the modern world, customers no longer have the patience to wait in a long queue at a bank’s physical branch to fill loads of paperwork. The insightful self-service digital banking remedies are now offering customers a fast, pleasant, and low-effort user experience through their preferred device of choice. And with the Covid-19 emergence, consumers of all generations are now confidently using computerized banking. So, many of them will not be returning to the physical bank branches.

Besides the common activities like the ability to check balances and to transfer money online, self-service capabilities also include;

  • Remote account opening
  • Self-registration
  • Insurance purchasing
  • Loan origination and more.

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To design such processes, digital experts apply cutting-edge technologies like;

  • Real-time ID verification
  • KYC compliance
  • Device verification
  • Fingerprint and facial biometrics
  • Selfie capturing and verification
  • Instant approvals
  • Omnichannel capability
  • Interactive forms
  • eSignatures and more.

Cloud Computing

The financial market is steadily growing, and banks now have to deal with a growing number of competitors from the financial market all corners. These competitors include BigTech, fintech, and non-financial players. And to gain a competitive advantage, the incumbents must act with speed and agility. So, cloud technologies have become more popular with banks when designing their digital strategies. Banks can now store applications and data with cloud computing and utilize scalable computing resources through the internet on-demand.

Amazon Web Services, Google Cloud Platform, and Microsoft Azure are the leading cloud providers, and they offer thousands of banks various cloud computing services. This way, banks can create and scale innovations faster.

Cloud platforms have effectively driven costs down mainly because banks no longer need to invest significantly in hardware and software infrastructure. They have also made the development and launching of new services and products easier, and banks can now respond to technological trends and client demands faster.

Biometric technology

Clients trust their respective banks with their sensitive personal information, meaning they expect banks to reciprocate with the highest security and protection levels. Biometrics lets banks and other financial institutions balance speed, convenience, and security for customers to experience a seamless experience. The technology uses human physical characteristics like voice, iris, and fingerprints to verify customers’ identities. Unlike passwords and PINs, biometrics are impossible to forget or lose. They are also difficult to hack.

Biometrics should provide a superior, unified customer experience across all payment channel types, from smartphones to smart home devices and ATMs. With that said, banks can use biometric technology in the following key ways to enhance remote experiences;

  • Mobile banking can help financial institutions incorporate biometrics in their respective mobile applications to allow clients to access their bank accounts and transfer funds while on transit.
  • Digital onboarding is achievable through simplification and speeding up of KYC processes and due diligence, thanks to biometric authentication.
  • ATM transactions need fingerprint scanners or other biometric identifiers to ensure that only authorized clients use their ATM services.

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Micro-services

Traditionally, application experts used monolithic architecture to build most banking applications. But this architecture is an inflexible one-for-all technique. The changing customer expectations and increase in mobile gadgets led to high demand for more easily manufactured, improved, and scaled apps, with the primary focus being functionality instead of coding. And banks can achieve this through microservice architecture.

Microservices help banks divide their banking applications into standalone services that can perform tasks independently but work seamlessly together. In monolithic architecture, a code failure can affect the whole business. But when a single microservice fails, it doesn’t affect the functionality of the rest. This way, banks are sure of business continuity and better service reusability.

Bottom Line

With benefits like high performance, reliability, and scalability, the above key innovations and trends let banks move faster, offer consistent user experience, constantly innovate, and increase business agility across mobile, IoT, and web channels. And customers are the primary reason today’s banks are constantly applying innovations to meet the new decade’s demands.