Today’s perspective about tomorrow’s banks.

Technology has completely disrupted the banking industry with digitization becoming a strategic focus. banking in 2018 will undergo a radical change.  It is indeed a far cry from those physical registers and human tellers manually counting your money. Now cash is almost invisible with plastic and cryptocurrencies enabling real time transactions across borders.

Let us look at some key areas where banking will take the big leap in 2018.

Card payments, internet payments and e-transfers: Banking in 2018 will be unrecognisable

Imagine a world without Visa, Mastercard, payment gateways, and Point of Sale transactions, We cannot, right? It has digitalized economies, reduced the circulation of currency notes to a large extent, given an additional source of income to banks, channelized the financial flows within the primary banking networks instead of parallel cash based networks and reduced cost of finance. It also made more funds available to buyers and sellers as banks extend credit facilities more.

But now even plastic is on it way out. The next level of disruption are one-click transactions that can be enabled through your Smartphone or any devices. IoT will enable you to interact with your account when you choose.  The anywhere every where banking is already here through,

• Integrated e-commerce sites within your banking login – Order your grocery with your internet banking login.
• Social banks– Integrate all your bank logins into one service provider site, like how emails are managed on Outlook.
• Payments on the go with Apple Pay, Samsun Pay or Visa Ring or through Wearables like Google Glass.
• Account access through single identification markers like Aadhaar, EIDA, etc. smart cards. Next time you shop your social security number or Aadhaar will be used to automatically debit your account. Your grocery bot will home deliver your monthly needs with your fridge tipping the delivery with your unique identification number.
• Bio-metric authentications, Face identity, Iris authentication or fingerprint will enable auto pay billing, offline payments and banking transactions
• Personal bots will handle your financials and banks will depute intelligent technology that can recognize the sentiment behind each payments and provide adequate support.

Banking in 2018 will meet the customer expectations and will try to mimic the retail experiences of e-commerce sites. Well I don’t want to restrict your imagination to the above, come up with more innovative ideas and put them as comments.

Frictionless customer experience for banking in 2018

A recent survey found that millennials would rather go to the dentist than stand in a queue for their transactions. But still almost 70% visit their branch to access their account. This is a big gap that needs to be bridged. A large majority are in the starting phase of their careers and are worried about managing financials, paying off student debt, looking for mortgages and starting their lives. They need personalized help. It is time to pamper them with a frictionless customer experience.

At the same time, let’s not forget the baby boomers and Gen X who will have unique demands of their senior lives. With such diverse demand base, banks must move ahead of ATMs, Internet banking and POS conversions.

The future is now. Banks should emerge as personalized financial assistants to deliver strategic services. Want to start a company, need a cross border transaction, require a currency advice, or visualize the ideal investment portfolio, millennials should feel comfortable to connect with their banks immediately. Seismic shifts are already disrupting the banking landscape with,

• Integrated Banking with Google Assistant, SIRI, BIXBY, etc. for voice enabled banking transactions on your personal devices
• Bank away – Tell your bank where you will be and they will take care of your financial needs in your travel locations.
• Strategic financial planning – Banks can map your life patterns and ambitions through social media presence, purchase patterns and digital imprints to deliver inputs on goal tracking, life style planning, financial deviations and many more
• Strategic consultancy services for budding entrepreneurs, loan management, risk portfolios and investment will be the most sought-after services. Banks do have core competencies to meet demands over the digital platform.

Managing security concerns and privacy

Blockchain and bitcoins are already creating wrinkles in the banking time-scape. The Winklevoss Twins are predicting Bitcoin to be a trillion-dollar industry. On the other hand, some are predicting the massive security meltdown. These shifting sands are terrifying for Millennials with security and privacy concerns. This needs to be addressed by the banks to empower frictionless decision making for the customer.

In my personal view, Blockchain will make a significant impact on banking in future. Banking payments will definitely get augmented through blockchain to make payments more secure with distributed ledgers. Bitcoin has brought a different dimension into play and there is a distinct possibility of more crypto currencies like Ripple, Ether and Litecoin will rule the payments space.

But it remains to be seen as to how the security concerns surrounding the purchase, sale and storage of crypto currencies will be addressed. In-built, multilayer security with biometrics and network embedded enforcement are constantly combating threat perceptions. But the sophistication of the attacks will keep banks on their toes. But the silver lining is that customers are more than ready to move on the digitization platform and trust banks on security issues. Whatever the outcome the payment industry is all set to undergo major shake ups in future.

A lot of research is already gaining momentum in technology circles about the use of Robots (Chat bots, Virtual assistant, Interactive Teller machines), Voice recognition (Alexa (Amazon) and Google assistant) and AI (Symantics, Compliance technology, etc.). There are many more concepts like global real time payments and IOT which are also catching up. Banking will undergo this interesting and exciting journey in 2018.

Well what is your view?

About the Author

Vijay Dorairajan is the Principle Consultant at Evolvus Solutions and has extensively worked with global banking majors in the MENA region. He is in-charge of Flux product implementations and data quality assurance for major client banks and closely monitors the pulse of the banking.