New technologies, legal regulations and demanding clients – these are the three determinants that make up the environment in which the financial sector operates in 2018. What are the challenges that banks face today?
AI, Machine Learning and Big data in the service of user experience.
Providing high-quality user experience has been mentioned as a leading trend for over a decade, and it is still very valid. In an environment where other parties in the financial markets offer intuitive and accessible 24/7 innovative services, banks are forced to emphasise that customer contact with the brand is as personalised as possible and tailored to the clients’ expectations. At the same time banks are forced to take care of the cost-effectiveness of implemented solutions. These two factors making advanced data analysis and automation are recognised as the future of customer interaction.
AI will become responsible for contacts with clients: bots will handle the matters for us, machine learning will be used to prepare an offer tailored to a client automatically, and virtual financial advisers will have huge amounts of data available, the analysis of which will allow to create a custom-made offer. We will be serviced by Artificial Intelligence without even realising it. Next step after AI implementing is the concept of cognitive banking. The systems will be able to generate real-time offers tailored to the customer’s needs.
The practical use of AI and Machine Learning is directly related to the need to collect and store large amounts of data. There appears the necessity to have the technical background that will be able to process more data and maintain the highest level of security
All of these work is aimed at one goal – remove all frictions from customer journey
The contextual banking – make the banking services become an invisible part of everyday routine.
Next step in the customer-centric approach is contextual banking. The bank is not a place, but a set of services that should appear and be available in a right place and the right time – when the client needs them. Comfort is a crucial word in ensuring the exceptional user experience. All necessary services are easily accessible for users and intuitive to use, and most importantly woven into the daily routine so that their use becomes completely natural and effortless.
Blockchain – a technology with potential worth exploring
The financial industry is actively exploring the potential of distributed ledger technologies. Blockchain in finances is not only about making smart contracts, it also includes increasing the efficiency of processes in areas such as monitoring documentation and flows, an equal authentication system or simplifying and automating complex transactions and reducing the costs of conducting. The Blockchain is also considered a technology that will revolutionise the area of security in finance – banks are intensively looking for solutions that will protect systems and clients from cybercrimes. The number of areas where Blockchain technology can be used means that shortly we can expect intensive tests that will examine the effectiveness and verify the possibilities of implementing this technology.
Open API – regulations are revolutionising the financial services market
Next to technologies, law regulations are mentioned as a factor that affects the activities of banks and financial institutions the most. PSD2 opens the financial services market to third parties. Banks in Poland are technologically advanced, in some part, they are now ready for PSD2. The key to using the potential of PSD2 is to adopt an active approach to maximise the opportunities offered by the opening of banking institutions. The new opportunities that are opening for banks are among others: use of more customer information available through the API for analysis and matching the offer to customer needs, the introduction of new services to the portfolio, higher quality services, new revenue sources.
The recommended option of implementing PSD2 is the proactive approach. Architecture should be designed in a way that will not limit the inclusion of further partners and expand the range of offered services.
Partnership with FinTechs – if you can not beat someone, join him
The financial services market is changing very dynamically. Banks entering into a partnership with Fintechs may achieve many benefits. Expanding the offer, improving the ability to offer innovations, increasing the quality of service offerings, reducing operating costs – these are just examples of benefits that can come from this cooperation. Many practices that are exchanged as the main advantages of Fintech – including functional product design, intuitive to use and available 24 hours 7 days a week – should be adopted by banks. The Fintech won’t be harmed in this cooperation. The benefits that Fintech can achieve when working with a bank include: gaining access to the infrastructure, customer base and using the banks capital resources.
The financial sector is changing dynamically. We can expect that quite soon we will not be able to recognize whether we are in contact with a human being or artificial intelligence serves us. Our virtual advisor will analyse of our expenses, service portfolio, financial flows in an unobtrusive manner will offer us services tailored to our needs. Banking products will not be a matter in itself but will be woven into a daily routine as a response to our needs.