Automating the Banking Industry: What This Means for the Consumer

2018 has come with many new and innovative developments which have influenced the way many industries execute their operations. The rise of technology has influenced the way business, customer experience and general practices are done. The banking industry plays a major role in managing financial operations which eventually transform the economy.

In Europe and the United Kingdom, for instance, new open banking regulations and second Payment Services Directive (PSD2) have been introduced. This means that third parties could access transactional banking data from the customers which will enable them to compare services and new applications. Bank customers will also be able to move and manage their money online.

RegTech and GDPR

General Data Protection Regulation (GDPR) compels banks to provide the processes that they use to manage and handle customer data. This process of automation is meant to ensure that banks manage their data better while avoiding major duplication issues as well as insufficient signposting within databases. 62 percent of banks have face issues with data duplication which has increased fraud cases and theft. Hackers have managed to gain access to bank databases through exploiting their weaknesses and this has led to losses and a reduction in customer loyalty. However, Fintech companies like NLS Banking Solutions have managed to monitor bank core systems through Tera CMS and Tera Intelligence products. Such technologically advanced processes have benefited many banks and have helped them blend in with the current automation of the industry.

This year, RegTech tools are predicted to be adopted as well so that banks can overcome different regulatory challenges. The World Bank believes that banks will adopt this technology because they will need to reduce their regulatory costs and risks while enhancing the customer experience.

In future, the banking industry will instill regulations that will require them to depend on real time data so that they can improve and enhance market stability and risk management. APIs will play a major role in the implementation of such advancements.

Open Banking

In Europe, all the banks will have to provide their data through open APIs so as to enable authorized third parties to gain access to all transaction data from customers; as a result, a seismic shift could be realized in the banking industry.

Open banking will make it possible for customers to view their transaction history and alert them if they are facing the risk of over-withdrawing their finances. This will enable a wider range of services that will benefit bank customers. Furthermore, open banking will ensure that customers view all their accounts on a single screen irrespective of the bank that they are affiliated to.

Fintech companies will now have the ability to offer new business models as well as new business categories which will benefit banks. This further points out that banks need to collaborate with fintech companies so that they can gain more insight on how to instill the increasingly popular automated services.

There are many more automated processes that are being introduced into the banking industry and they include rise of voice assistants, blockchains, biometric security, and robo advisors.

The next issue will elaborate on these advanced innovations and explain how they will benefit both the bank and its customers. Stay tuned!