If one compared 4000 years banking history to the average human life-span, digital banking would have just started making unintelligible noises and mobile banking would be barely a month old. Yet the digitisation of financial services has led to a shift as extreme as the introduction of digital money or the development of central banks. Today most people have no need to physically visit their banks and can conduct transactions electronically. This has created a range of opportunities and challenges that will transform the banking industry in the coming years.
According to the The Cisco Internet Business Solutions Group (IBSG), Gen Y and Gen X are increasingly adopting new devices and online channels for financial purposes. 40% of Gen Y customers prefer using Personal Finance Management (PFM) tools to manage their expenses and savings, and are more inclined to interacting with a financial advisor on video chat, compared to boomers.
With customers buying financial services online, most banks have revamped their digital presence to simplify access to their products. The use of integrative technologies and game-like interfaces enables a more seamless end-to-end experience for customers with their bank. Another major source of investment has been in the area of big-data analytics which assists in suggesting relevant products to customers and fraud detection.
The ubiquity of mobile systems implies that within the next few years, most financial transactions will be via such devices. This will lead to a huge expansion of the customer-base of banks since mobile internet requires much less user infrastructure. The challenge for the banks is obvious: creating simple, unified and secure end-to-end platforms, which can handle huge data and traffic with little or no downtime.
Mobile banking offers more transactional features as opposed to the full menu of services. However, the list of services available through mobile banking will increase in the future, ultimately encompassing all of the banks’ offerings. This requires a paradigm shift in security architecture (WAP based interactions do not have firewall protection) and creation of platform independent applications. Further, the banks have to present themselves in a new light to an audience much of whose social and professional lives are conducted virtually with the physical location being irrelevant. Making the mobile banking platform a scaled-down version of the bank’s webpage is not the solution.
This scenario has opened up an avenue for development of full mobile banking by new players. More such innovative applications are the order of the day, if mobile banking has to realise the full promise of the digital banking revolution.
As mobile banking dominates the market, banks need to keep up with digital banking developments in this competitive market. They should look at adopting new banking technologies and integrating advanced transaction banking platforms. Get to know about a high-speed banking platform which provides an advanced highway to run customer payments services, receivables management, cash management, liquidity management, trade finance and supply chain finance in an integrated set, through a single platform.
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