Top 5 Technologies That Are Transforming The Banking Sector

“When digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.”

The above quote by George Westerman clearly states, how technology in the past years has become an important part of a business’s success. If used correctly, technology is capable of transforming the whole working process and can provide new opportunities, growth, and methods to save money.

With rapid growth in the banking sector, it became necessary to incorporate use of Fintech into its working process. FinTech refers to the process of using technology by different businesses to improve their financial and banking services.

Here are the top five technologies that have helped in transforming the banking sector:

Blockchain:

Blockchain refers to the system that maintains records of transactions across different computers linked in the P2P network.

• Blockchain with its capability of keeping track of the transactions in a verifiable and permanent way helps in improving data security
• Blockchain software is cheap to operate, thus it saves money
• Offers high security, thereby increases customer trust in the bank
• Secures loaning and borrowing process
• Eliminates manual storage of data, thus assuring an error-free work process
• Saves employees’ time and contributes to work efficiency

Artificial Intelligence (AI):

Artificial intelligence refers to the process of programming machines to think and act like humans. It allows machines to sense and learn human behavior, and take decisions or make suggestions based on its collected data.

Recently, the banking sector has increased the use of different banking software development with AI being amongst the most used software. Some ways in which AI has helped in developing the banking sector are:

• With AI, banks can provide 24x7 customer service making it easy for the customers to conduct transactions or other banking operations at any time
• AI offers great cost-saving opportunities across banks and is expected to save around $447 billion by 2023 according to Business Insider.
• AI enhances security and helps in detecting fraud
• Helps in making decisions based on customers’ behavioral patterns, thus decreasing chances of fraud and enhancing risk management

Robotic Process Automation (RPA):

Robotic Process Automation refers to the process of programming software in a way that enables robots and virtual assistants to complete repetitive tasks without any human intervention.

RPA is amongst the top technologies that have gained immense popularity in the past few years by enhancing work efficiency in the banking sector. Some ways in which RPA has contributed to the growth of the banking sector are as follows:

• A robotic process automation software helps in saving labor and operational cost by completing intensive tasks without human intervention
• RPA operates with robots and virtual assistants, thus minimizing errors
• It contributes to the growth of a bank by providing the best user experience
• With RPA, a customer gets fast solutions, such as getting a quick revert on tier debit/credit card applications
• It improves the work efficiency as it takes up small scale queries of customers thereby saving customer care services’ time and effort
• It optimizes the mortgage process

Cloud computing:

Cloud computing is an important part of banking software development. It is the type of software that stores data and delivers computing services like networking, servers, databases, among other services.

Some ways in which cloud computing has transformed the banking sector are:

• It saves cost as the customer only needs to pay for the services that are in use
• It helps in securing online payment, online transfer, and digital wallets by maintaining the data records
• Cloud computing offers 24x7 customer services, hence increasing customer satisfaction

Big Data:

According to the IDC Semiannual Big Data and Analytics Spending Guide, the banking sector is currently one of the top investors in big data and business analytics solutions. It is because of the hefty amount of data the banking sector produces daily.

More data means more security and this is where big data comes into play. Here are some ways in which big data has contributed to the banking sector’s growth:

• Storing and securing important data like credit card scores, transaction history, ATM withdrawals, and customers’ personal information
• Making business decisions by observing customers’ spending habits
• Contributing to increase in sales (by keeping track of market trends) and managing risks
• Enhancing security by preventing frauds

Wrapping up:

Just like every other industry, the banking industry is also evolving. With increasing technology, the banking industry can offer new services to its customers, thus resulting in continuous growth.

Jim Marous said, “Bottom line, having a customer-centric culture is more than just a good thing: it’s become a matter of survival”. This states that customer satisfaction is the most important factor behind the success of a business and because of technology, the banking sector can master this area and continue to grow with every passing day.

By now, you must be clear about the benefits of technology in the banking sector.

Reputed software companies like Jellyfish Technologies provide various banking software development services and solutions that can surely increase your business growth and profitability.

Neo Banking: The Future of Banking

 Over the recent years, technology has played an important role in transforming the banking sector. It has not only helped in advancing the working process of traditional banks but has also taken care of various financial expenditures, such as the cost of maintaining the bank’s infrastructure and human resources.

These financial expenditures affect the services provided by traditional banks, hence lowering the customer satisfaction rate. Furthermore, other physical and geographical challenges like transferring customer’s data from one branch to another and repetitive tasks like processing the customer’s documents and uploading them to the server, and maintaining data security further affected the bank’s delivery rate.

With the growing rate of customer satisfaction and expectations, traditional banks realized the need of changing their business and operational models, one that ensures fast service and enhanced customer experience. Neo Banking is a result of one such change.

What is Neo Banking?

The concept of Neo Banking was first introduced in the UK around 2017 and it remains a fairly new concept to many. This bank entirely functions online and does not have any physical branches.

Neo banks provides digital and mobile financial services, such as money transfer and money-lending, among other services. It is an attempt to fill the gap between what customers want and what traditional banks are offering while providing fluidity.

Types of Neo banks?

There are two types of Neo banks present in the financial market today. In the first type, a Neo bank partners with a traditional bank to provide services and does not have a banking license. While in the second type, a Neo bank obtains a banking license and does not need to depend on other traditional banks for providing products and services.

The first type of Neo bank doesn’t function independently while the second type can operate on its own.

How does a Neo bank work?

Neo banks and traditional banks have a completely different way of functioning but both make money between money incursion and lending.

Being an online banking system, Neo banks can save money on legal infrastructures, which enables them to slash customer fees by a significant amount. They provide a personalized experience to every customer using various banking technologies like Artificial Intelligence.

Artificial Intelligence helps neobanks to collect and analyze data based on customers’ user behavior and at the same time allows them to make decisions and prevent fraud. Other technologies like Big Data help neobanks to keep track of the collected data and process it effectively to gain valuable insights when needed in the future. While with RPA (Robotic Process Automation), a neobank can save human labor and upload the data without any human interference.

How is Neo bank the future of banking?

According to recent research done by Grand View Research, the global Neo banking market size was valued at USD 34.77 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 47.7% from 2021 to 2028.

Neo banking is growing every minute due to the various advantages it provides over the traditional banking system. Let’s go through a few of these advantages:

1. Hassle-free process

Anyone who has an account in a traditional bank is aware of the struggles he or she faces while opening that account. With time, the traditional banking system has tried to overcome these challenges but hasn’t been able to find any success in doing so. But with neo banking, customers can create their bank accounts and access them at any time and at any place.

Being an online banking system, customers don’t need to be physically present at a bank branch to create an account or take out cash, instead, they can create and operate their accounts using their phones just by following a few steps.

2. Enhanced customer satisfaction

Neobanks were introduced with a motto to fulfill every customer’s needs. Keeping up with this goal, neobanks focuses on providing a glitch-free net banking website and a responsive banking mobile application.

Learning from the mistakes of traditional banks, neobanks decided to do the complete opposite of what traditional banks did. Neobanks focused on creating banking apps and websites, developed using the best UI/ UX services, making them error-free and at the same time highly responsive, resulting in higher customer satisfaction.

3. Cross border payments made easy:

Traveling abroad is already a hectic process and being a traditional bank account holder makes it even more difficult since it doesn’t make a user eligible for carrying out international payment. For carrying international transactions, a user needs to contact the bank first and request an upgrade. That’s not all! After carrying out this process, a user needs to wait for a long period for that upgrade to happen.

But being a neobank account holder, a user can save their precious time over this as they are eligible for making international transactions without the worry of upgrading their cards before traveling abroad.

4. Easy account management:

Unresponsive traditional bank’s websites and applications make it impossible for customers to keep track of their transactions and not everyone has time to visit banks and get the data. Keeping these points in mind, neobanks aimed to provide a responsive website on which all the transactions are updated from time to time and anyone can access it from anywhere on any electronic device.

Not only this, but neo-apps also provide an overview of your expenses, allowing users to set up their saving goals. This helps in managing the finances in a much better and organized manner.

Conclusion

In this digital era, every other user wants to access their bank accounts on their mobile devices. And to achieve continuous growth in the market, the financial industry needs to provide a better solution to their customers, such as Neo Banking.

Ever since the neobanks have been introduced in the market, the banking industry has experienced a huge shift of customers towards this new and advanced banking technology. It’s a matter of time that neo banking will take over traditional banking.

So what exactly is making neo banking so advanced?

By incorporating the use of advanced technologies like Artificial Intelligence, Big Data, and Cloud Banking, Neo Banking has become successful in overcoming the challenges faced by traditional banking ways.

Jellyfish Technologies have been continuously helping the banking industry to take over the advanced way of operating. Jellyfish Technologies understand the need of incorporating advanced banking technology to meet user expectations, thus providing the best banking software development across the globe.

Are You Looking For Banking Software Development Company?

Banking and finance is the flag bearer business of present-day economies. They are the indicator of the development of a country. Technology evolution has totally changed the method for working together for the banks and financial institutions. To provide their services to the masses in a secure way banks and financial institutions need robust technology solutions which need to be continuously upgraded with the changing technology. For it, Jellyfish Technologies provides the best solution which is a leading banking software development company who give their banking and finance application outsourcing services throughout the world. To know more about our IoT software development services, please visit here: - https://bit.ly/2t8UMab