Banks Use Technology to Ride the Wave of Transformation
There's a steady tide of financial technology innovation that promises to make banking services more efficient.
Products and services that would have seemed like science fiction, are now reality at a bank or credit union near you. And these so called, fintech products, are revolutionizing the way bank customers access and manage their money.
Have a check you need to deposit but too busy to get by the branch?
Save yourself a trip and just snap a picture of the check to deposit it to your account.
Have a question about your loan options?
You can Skype with a representative through your bank's online portal and get answers before the commercial break is over.
Naturally, customers love these technologies. Their convenience and prestige make them hard not to love.
As customers become increasingly accustomed to these conveniences, banks that don't offer these options will suffer. To stay competitive, they have to give customers what they want. And right now, it's technology. Here are a few of the game-changing technologies banks are using to transform the branch experience.
ATMs are hardly a modern addition to banking. The first automated teller machine was introduced shortly after man first walked on the moon, in September of 1969. Today's ATMs, though, look and operate differently than the rustic machines of earlier periods.
Along with the typical dispense and deposit features, the ATM of the future will enable a variety of functions. From buying plane tickets to applying for a mortgage, you'll be able to accomplish many tasks with a stop at an ATM.
According to a recent Federal Reserve report on consumers and mobile banking, a whopping 75% of all bank customers regularly use ATMs. The report concluded that ATM use has actually increased year-on-year. Given their proven and lasting popularity, it should come as no surprise that many financial institutions are eager to add additional kiosks to their menu of offerings.
The newest ATMs in development promise to offer solutions to issues raised with traditional ATMs. These full-service kiosks will, among other things, allow customers to designate more precise dispense amounts, include flat-screen interfaces and offer security features like video screens that allow customers to literally watch their backs.
Today's bank customers use several different channels when performing bank transactions. However, the convenience of using multiple face-to-face and digital channels can quickly become a nuisance if the channels aren't connected to each other.
As banks continue to evolve in their technology adoption and embrace infrastructure solutions, these channels will become increasingly connected through one omnichannel network. Customers will be able to move seamlessly between channels without repeating themselves or starting transactions from scratch.
Enhanced security on mobile apps
The number of customers utilizing mobile banking applications continues to grow. According to the Federal Reserve report, 43% of mobile phone owners with a bank account currently use these mobile offerings, up from 33% in 2013 and 39% in 2014. With more people handling more types of transactions via mobile devices, security in these applications will continue to increase.
As banks update their mobile applications, a growing number will add biometric security measures, including touch ID. These additions will not just help keep customers' accounts safe, they will also improve customer experience by making it easier for customers to access to their accounts.
Increased security in bank branches
Consumers aren't the only ones who benefit from security improvements. Bank branches can use technology to enhance in-branch security. Many branches are starting by replacing traditional teller cash drawers with more secure cash recyclers. A cash recycler acts as a mini-vault, accepting cash deposits and dispensing cash securely and accurately.
As additional technologies hit the market, many banks will adopt them in their efforts to to create more holistic security networks. This move is vital, as any security improvement will increase the safety of both customers and employees.
Increased use of customer analytics
Banks captures a wealth of data about their customers. And as technological advancements make it easier for them to analyze and evaluate this data, they will increasingly put this information to use.
By exploring transaction history, online banking usage and patterns of customer behavior, banks will be able to tailor their services and enhance customer engagement. This information can be useful for many applications, extending far beyond traditional performance measures.
"Banks own — arguably — the richest data set in existence on any person: transactions."
A time may even come, hypothesizes Plath in American Banker, when customers can sign up to receive alerts based on information from their bank. He sees opportunities for banks to mine the data so the opted-in consumer could, say, get an alert from his bank that his father may need medical help.
Things are changing at an accelerating rate. Financial institutions of all types within the consumer banking industry will see a potentially overwhelming number of technology innovations in the near future. It's vital that the banking services industry ride the waves of business transformation being fueled by technology.