With steady advancements in technology, fintech is becoming an integral part of the banking business. Unlike in its early days when startups dominated the sector, now even large organisations are entering the race to make their presence felt in the market.
According to a report from PricewaterhouseCoopers, 82% of global financial service organisations expect to tie up with more fintech companies over the next three to five years. 77% financial institutions plan to ramp up their internal innovation efforts.
More significantly, the changes that fintech is bringing about in the banking sector is increasingly becoming visible to customers. From the moment you open a bank account, customers, these days, are able to make use of technology that is meant to make operations smoother and more efficient. Here is a brief look at how fintech could revolutionise the way banks and its customers operate in the coming years:
More Intelligent Virtual Assistants
Financial institutions are already using chatbots and virtual assistants for services such as answering queries and making recommendations. They are even integrated with popular apps like Facebook Messenger. In 2017, OCBC had launched a chatbot named Emma that provided information on home and renovation. By the end of the year, Emma had helped the bank close loans worth over S$70 million.
With further progress in artificial intelligence (AI) and machine learning technologies, these chatbots could play a bigger role in the decisions that customers make. From answering questions related to specific products and services, chatbots could become smart enough to handle conversations on a number of topics.
AI-Based Security Systems
With financial institutions actively entering the digital space, cybersecurity is becoming a major concern. Several banks are already making use of AI to combat cyber threats. Last year, OCBC had announced plans to use technology to detect suspicious transactions. The Monetary Authority of Singapore (MAS) has even announced a grant to encourage research in this sector.
Security will always remain a concern for customers even as they embrace digital services. But with intelligent solutions being put in place, transactions and the related procedures could become more secure and efficient. This means more peace of mind to you.
As fintech makes further inroads into the everyday operations of banks, customers can expect more flexible and customised services. For instance, with mobile payments becoming more and more common, banks are actively looking to tie up with technology firms that offer e-wallet services. In China, HSBC had become the first foreign lender to accept payments from a range of applications such as Alipay, WeChat Pay, and Apple Pay.
For customers, this means increased convenience and more options to choose from when it comes to deciding how they would like to go about their financial transactions.
With digital banking becoming more and more popular, visits to physical bank offices may become infrequent in the future. This would help banks reduce staff and cut costs. But this does not mean these offices or the staff in them become obsolete. Financial institutions will still require personnel to assist customers who would come in for certain purposes. As a solution to this, some banks are experimenting with humanoid robots.
About three years ago, Japan’s Bank of Tokyo-Mitsubishi UFJ deployed a robot to greet customers and answer simple queries. Although this is yet to become a widely adopted solution, several financial institutions from the US to Taiwan have followed suit. It may not be long before more banks consider this option and you encounter a robot instead of a customer service executive when you walk into a branch.
Providing improved customer experience is important for banks to increase their customer base. But they would prefer to do it without an huge increase in costs. Fintech provides an ideal solution in this regard.
However, there are still some hurdles on the way. Given the nature of their business, banks are notoriously slow at adopting anything new. Although fintech is being seen as an important innovation that could help the industry move forward, concerns on security remain.