The Banking Industry – Accepting New Technologies

The Banking Industry is the only industry which has shown the least interest towards adoption of Technology for the last few decades. Now the Banking industry is the area in which opportunity to explore technology is the highest.

Now, Let’s explore which technologies are booming in banking.

The Newest Technologies in Banking industry-

 As per Cornerstone’s What’s Going On in Banking 2021 research, the leading five technologies for 2021 are:

1) Digital account opening.

2) API (Application programming interfaces).

3) Video alliance.

4) Peer to Peer payments; and

5) Cloud computing.

1) Digital Account Opening

Digital accounting opening is the most prevalent technology in the banking industry.

Actually, Pandemic is the main reason which has changed the perception of the banking industry. People are more comfortable dealing with banks online rather than visiting the branch.

 Commercial digital account opening systems are gaining popularity among credit unions, also. Credit unions are planning to implement a digital account opening system in 2021 as soon as possible.

2) Application Programming Interfaces (APIs)

API is the most important technological revolution that happened in the last few years.  Previously many credit unions have built or invested in APIs previous year, now banks are finally taking up the same. The growth in API arrangement among banks and credit unions is more concentrated on efficiency (i.e., cost and speed).

 3) Video Collaboration

As the pandemic made physical interactions challenging, and that has accelerated banks’ and credit unions’ plans to deploy video collaboration tools.

This is an indication of a huge psychological move for many financial services executives: It’s an acknowledgment that branches may not be as essential a channel as they once were.

4) Person-to-Person (P2P) Payments

P2P payments are gaining popularity among consumers. However, the dollar volume denies consumers’ P2P payment usage patterns. As per study of Cornerstone’s consumer research, the PayPal app is installed on nearly two-thirds of smartphone owners’ devices, and 40% of them say they do P2P payments through the app each week. Apple Pay, Google Pay, and Venmo are installed on only some smartphones, but among customers that do have these apps on their phone, about a third tell they use them each week to make P2P payments.

5) Cloud Computing

As per data, the percentage of banks that have installed cloud computing increased significantly in 2020, increasing from 32% at the ending of 2019 to 40% at the ending of 2020. Lots of credit unions have already started to focus on it. Remaining credit unions—about 17% of banks—will do first-time investments in cloud computing in 2021.

The challenge for the tech vendors has transformed, however, from converting the cloud (as it provides faster speed and lower total cost of title), to presenting tangible immigration strategies and realistic predictions of process and cost impacts.

Artificial Intelligence (AI)?

AI-based technologies like robotic process automation, chatbots, machine learning , and few financial institutions are using these tools. Implementation of robotic process automation (RPA) improved significantly last year among both banks and credit unions. As per Cornerstone Advisors the percentage of credit unions deploying chatbots tripled from 6% going into 2020 to 18% heading into 2021.

AI Deployment

 SOURCE: CORNERSTONE ADVISORS

But core banks are lacking opportunities to help their bank and credit union clients with their innovation outlines. It is very much prominent from the below figure. 

Core Vendor Contribution to Digital Transformation

 SOURCE: CORNERSTONE ADVISORS 

So, If banks are honest about being “customer-centric” and ready to solve the problem of consumers, then they’ll turn out to be more interested in adopting the technologies.