Banks and financial institutions have been the torchbearers of digital transformation and the change is distinctly noticeable through a completely redefined customer experience. Financial institutions are moving with increased agility to innovate with many new-age players and adopting the disruptive nature of fintech. In our reckoning, the future of banking in this disruptive environment can be experienced through new technologies like Virtual Reality, Blockchain, Artificial Intelligence, Mobility, Internet of Things, Chatbots and Open Banking. We call this ‘I@Bank’, or intelligence at banks, enabling us to have a hassle-free banking experience without visiting a brick-and-mortar outlet.
The barriers to these new technologies are nowhere as high as they were for say, television or electricity decades ago. On the contrary, these technologies are being adopted rapidly and demystifying them will enable customers to be more aware and avail required services.
Let us look at some key technologies that will disrupt the industry this year:
Do we really need large concrete structures with time restricted access, to house a bank, staffed by people in suits? Virtual reality (VR) which is fast maturing today in terms of availability and cost, will allow banks to roll out imaginative 3D spaces accessible from a headset. These environments do away with physical limitations and provide immersion with new modes of interaction that will soon dominate the industry much like the humble ATM of the past. Looking further, these can be personalised and could include branding the VR environment with favorite movie star avatars to act as helpers and visual tours.
The AI of today is automating many white-collar jobs. Algorithms, like deep learning born only in 2012, can sift massive amounts of data using cloud powered processors, to mimic human tasks requiring prediction. Today, data scientists with advanced degrees design these algorithms and software engineers tune these algorithmic black-boxes for applications. We envision that this will be taken further, and AI will get democratised allowing even common citizens to utilize high-end AI through templates. Leading Indian share brokers have already launched successful Robo-Advisors for automated investment planning.
Chatbots have become ubiquitous, though they today primarily serve as customer support agents, are transactional and lack considerable finesse. They usually default to humans when faced with complex scenarios. In 2019, chatbots will advance to encompass the individual personality, preferences and history of the customer.
Internet of Things
Internet of Things is an ambitious technology aiming to connect every device to the internet and make it addressable, accessible, intelligent and networked. In 2019, this will proliferate to every device owned by the customer. Certainly, the customers would then want their bank to be a part of the ecosystem. While privacy concerns stand in the way, the evolution of data safety standards will be followed by the market wide adoption.
Most traditional banks have embraced mobility by rolling out shiny new apps. However, to truly participate in the future, they will have to open their internal functionality through trusted Open Banking APIs (a form of access by a computer). This will allow greater cooperation between traditional banks and emerging fintech players, creating a level playing field and giving more choice to the customer.
Bitcoin which once started off as a decentralised crypto-currency has now morphed to business-focused Distributed Ledger Technologies (DLT) aiming to provide banks a more secure and mutually trust-able system of record. Today, even though cryptocurrencies are oscillating between becoming heroes and being called bad boys, DLTs continue to make inroads in banking. This year, the possibility of customers being able to tokenise major assets will improve, while DLTs will continue to be leveraged by banks as the security technology for the future. A few Indian banks have already experimented international transactions using blockchain and use cases within and outside banking are bound to increase.
In conclusion, today’s digitally native customers want to operate in a simple fashion, without navigating a huge hierarchy of departments in a bank. With financial institutions coming to the fore and joining hands with the technology providers, we are going to see a major transformation in the industry with world class banking experience for both the banks and the customers. (Views expressed are personal)