Eight technology trends that will disrupt the banking industry
Friday, 11 20 2020, Category: Banking, Country: World
Technology is rapidly transforming the way how banks operate and how they serve their customers, and becoming a key enabler of competitive edge. According to a new report by Deloitte’s Middle East Financial Services practice, eight emerging technologies are set to disrupt the banking industry in the coming years. An outline of the technologies and some of the key benefits they have to offer to the banking industry.
Cloud is an essential tool of today’s service delivery model, and enables banks to penetrate new business opportunities and access new delivery channels. By leveraging cloud-based services, banks are able to decrease data storage costs through saving on capital expenditure (CAPEX) and operating expenditure (OPEX), while ensuring customer data is protected.
Big Data analytics
Big data refers to large and complex datasets that create significant challenges for traditional data management and analysis tools in practical timeframes. Using advanced analytics, banks can apply technology to efficiently extract valuable insights from data, and use those to improve the (strategic) decision-making process.
AI and cognitive technologies
Artificial Intelligence (AI) is now becoming a part of the business environment and is reinventing the entire ecosystem of the banking sector. By increasing the level of automation and using dynamic systems, AI supports decision-making, enhances the customer experience, and improves operational efficiency. AI also provides a strategic oversight for getting value out of data, which is now needed more than ever due to the data influx from a wide range of sources.
The Internet of Things (IoT)
Internet of Things is a technology which connects devices/sensors in a network with the aim of providing better data-driven insights. The banking sector started utilizing IoT relatively late compared to sectors such as energy and automotive. However, IoT has been gaining importance in financial services lately, especially in retail banks, which are showing large investments in IoT to be used in their internal infrastructure and consumer-facing capabilities.
Robotic Process Automation (RPA)
The banking industry is mandating the use of intelligent automation to drive efficiency, eliminate repetition, and improve customer satisfaction by providing fast and efficient services. The technology behind this automation is called robotic process automation (RPA).
Blockchain and Distributed Ledger Technology (DLT)
Blockchain technology and its associated distributed ledgers were devised as a simple yet smart solution to keep track of the Bitcoin cryptocurrency in circulation. The solution leveraged a ‘distributed ledger’ architecture under which all users who participated as ‘nodes’ in the network had a copy of the entire ledger.
Open Banking refers to the movement that banks work together in an ecosystem of (technology) partners. Banks broadly have four broad strategic options: full-service provider; utility; supplier; and marketplace interface.