Like all industries, banking is evolving at a rapid pace. However, the banking industry faces fascinating and unique pressures that make its evolution more interesting. On the one hand, people still want face-to-face interaction. At the same time, they expect efficiency and cost reduction. These elements often don’t mesh well, particularly when different customers want different things. As such, here are three interesting trends when it comes to the future of banking.
Artificial Intelligence
Artificial intelligence is becoming more and more prevalent in all industries, and this is certainly the case for banking. For example, artificial intelligence is taking over more back-office functions via accounts, fraud detection, credit risk determination and more. As AI continues to rise, the need for humans to manage banking functions continues to fall. However, that is not to say that humans are being completely pushed out of the banking industry. Just like ATMs repurposed teller functions, AI is simply changing the nature of employment within this industry, not eliminating human interaction. As artificial intelligence continues to evolve, people are interacting more and more with computers. Many banks are developing virtual assistants to provide support and financial guidance to customers.
Digital and Mobile Banking
An increasing amount of banking is being done on mobile devices, obviating the need for anyone to visit a bank or, in many cases, for a bank to even need to have a physical branch. The ability to deposit a check via a mobile app isn’t new anymore and is quite commonplace. However, many banks are now unveiling their own Venmo-like systems, which enable users to make small payments to friends and family without even needing cash.
Cybersecurity
The banking industry, like all industries, is facing massive pressure to upgrade its cybersecurity. However, that pressure is all the more acute in this industry as a breach can result in customers losing their hard-earned money. Cybersecurity trends in the banking industry include enhanced security challenges for mobile applications, increased pressure on third parties (like outside vendors) who have access to data and the challenges faced by cryptocurrency. Technology and consumer tastes are changing, and the banking industry must evolve with it in order to survive and not be replaced. Furthermore, consumers must be more aware of the challenges presented by common scams, like phishing. The responsibility for adequate services and security can’t simply fall on the banking industry. Consumers must also demand it.
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