Trends in Digital Banking

Posted bySophie Knight | Category Blog | Date 25 April 2018

We saw a financial crisis in the United Kingdom in the first decade of the 21st Century.  This crisis led to the rigorous regulation of the banking industry by central banks and government authorities which we see today. The banks were instituting over-complex systems which aimed to integrate the needs of old-fashioned business models and catering to the mores of the existing regulations.

As a result, plenty of investment was given to certain back office systems in order to meet the regulatory requirements, usually which were developed and managed out-of-house. This shift left plenty of financial groups shifting their focus to regulations rather than on other factors such as customer services, online developments and usability of the product.

If we are discussing the banking systems which were designed in the late 80’s and the early 90’s, it is clear that the system was inflexible and non-customer-centric. In practice, the systems ignore all the basic principles of customer service. This is because the core functions and internal process workflows appear to be highly limited and they require costly enhancements from vendors.

New banking models

Clearly, a place for a new banking model was identified. New banking models will become more and more essential for the likes of family banking, corporate provision and wealth management. As the world moves online, the typical customer behaviour changes and is in need of a new digital model for retail and corporate banking.

The focus in digital banking is all about user experience. Business and public social networks, e-commerce platforms and digital payment platforms are trailblazers in the new banking model. This is because they have set the benchmark for things like speed, agility and are focussed on the overall user-experience of those who interact with the software.

It is fair to say that in today’s world, the demand from both the consumer and the corporate client is that they expect similar online performance from the banking authorities as they do existing online systems, like in retail for example. 

Banking Apps

Smartphones have changed the world completely, changing how we interact with each other, how we navigate, how we obtain information and how we manage our finances and bank.

After the success and convenience of online banking via the web, it was time for a new model of banking to the emergence in the form of a smart device app. The apps are very focused on user experience as well as security. Typically, you be required to enter a passcode to access the app, some banking systems offer a fingerprint or face recognition log-in.

The banking apps have become a leading form of banking in the UK. This is mainly to do with the amount of smart-phone and tablet users and the convenience of the operating system. Banking apps allow you to make quick transfers between accounts and make fast payments to others – of course, all of this can be done on the go. The NatWest banking app actually allows the user to withdraw money from an ATM via the app without having to present their card. Basically, you can do anything that you could do via online banking or in a bank, and much more.

 The must-haves of digital banking in 2018

Going into the future, there are a few areas which digital banking will have to master in order to survive.

One of these areas is digital-product innovation. A banking system must be constantly shifting and capable of changing the customer expectations. The number of products offered by banks today adds complexity to their business and operational costs, so they must be able to keep up with this in order to provide for the customer efficiently.

Another area to focus on is to make sure they are providing good banking apps to provide a seamless multichannel experience. Users must be able to move from one channel to another effortlessly.

Moving into the future, banking systems are likely to start utilising the Artificial Intelligence more. Banking systems are becoming more and more complex, and predictive analysis and advanced analytics powered by AI could help to improve the overall usability and functioning of the system for the better.  AI will help to predict the customer needs and actions better, and therefore provide and advertise the appropriate products to an individual.

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