What's Next in Automation Banking?
What's Next in Automated Banking?
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The banking industry leans towards the conservative side when it comes to implementing innovations. Where other industries are charging towards some new shift or change, the banking and financial sector takes a slower and more cautious approach.
This is not surprising, given the sensitivity of the industry. After all, a wrong move could not only risk customers' digital assets but their personal details too.
Looking at how much banks resisted change in the digital scene for a while, it would be interesting to note that they are one of the many industries leading the charge in this digital revolution age. It is, thus, little surprise why more than half of retail banks believes all of their services will be fully automated by, or before, the year 2022.
What is Banking Automation?
Banking automation can be said to be a lot of things, and it can as well be explained in a variety of languages. The best way to go about it, though, would be describing this concept as one where banks can now take their services to people – rather than having such people come to them first.
This, they will achieve by building on the existing technology infrastructure we have today. That will not only help the banks compete better with the fintech industry but also make sure their services are better accessed by a wider array of customers from anywhere in the world.
Banking automation makes it possible to cut out the need for branches while still delivering high-quality services to customers without fail. Such a move saves the bank a lot financially, and in effort helping to direct focus to other areas of bettering the customer experience rather than always worrying about physical expansion. Overall, banking automation is defined as the employment of digital services in supplying banking services to the general populace – ensuring more ease, convenience and improved quality of service.
Technology Forms Fostering Banking Automation
Banking automation might have been in the pipeline for a while now, but it started gaining traction with improvement in the tech sphere. The most notable forms of technology which has helped to shape the face of banking automation as it is – and will still go a long way in helping improve how banks offer digital services – are:
● Artificial Intelligence – When AI first made its way onto the tech scene, companies and developers saw it as a tool that could go through a ton of data in record time and make sense of it. Soon, though, AI would show that it could not only go through all these data but learn from them. Again, not just learn from them, but apply that knowledge. Imagine not having to teach an algorithm which could simply learn by itself, replicate itself for thousands of customers and keep its ground.
That ushered AI into the banking and finance industry. If you are wondering how this helps, there are quite a few scenarios which you might have come across yourself. Banks have now deployed their AIs and bots to popular social messaging platforms like Facebook (via the Messenger app), Twitter and WhatsApp. With these bots, you can hold intelligent conversations and have issues cleared up in minutes. You can also perform basic tasks like checking your account balance, confirming personal details, making other inquiries and so much more.
That ushered AI into the banking and finance industry. If you are wondering how this helps, there are quite a few scenarios which you might have come across yourself. Banks have now deployed their AIs and bots to popular social messaging platforms like Facebook (via the Messenger app), Twitter and WhatsApp. With these bots, you can hold intelligent conversations and have issues cleared up in minutes. You can also perform basic tasks like checking your account balance, confirming personal details, making other inquiries and so much more.
● Blockchain – This used to be a concept applied to bitcoin only, and for good reason. After all, the cryptocurrency is the oldest and most popular by far, and it happened to be the first known use of blockchain technology. Banks were quick to resist blockchain tech at first – mainly due to the kind of disruption that the cryptocurrencies were looking to cause in the financial markets. Now that this technology has been around for a while, and it has proven itself in the way of digital encryption, security and authentication procedures, banks are starting to see the light in it.
These days, not only the fintech industry is interested in applying blockchain technology in the provision of better, personalized and secure financial services to the masses. The catch is, the masses get to trust the banks with their money more.
● Robotic Process Automation in Banking – Robotics is not meant for the manufacturing industries alone. The basics of this involve programming software in such a way that allows it to perform the same tasks as a human would, only a lot simpler and faster. It will be aimed at improving banking services, but there is a bigger catch. With a better robotics plan in place, it would be much easier for banks to make their digital transformation than otherwise.
The Case for Banking Automation
As mentioned above, the banking industry is known to take very calculated moves when it comes to introducing new technology forms. For that reason, it is not difficult to see that there is a strong body of evidence for why automation is the next step for the banking industry.
Besides the fact that almost every other industry is going digital, the unique applications and use cases for the banking industry are supported by:
● Improved Customer Experience – Customers don't need to get into banking halls to have a lot of things done these days. Most of the operations they need done – money transfers, card request/ blockage/ money withdrawals, etc. – can be done from the comfort of their digital devices. This helps to eliminate the stress from the customer's banking experience while also reducing the physical queues in banks. Overall, automation infuses speed into the whole banking process by eliminating waiting times.
● Increased Fraud Detection – There is something called human error, and it should not be a factor when it comes to handling money matters. This puts an AI – which is at almost a zero per cent chance of being fatigued or distracted – in a better place to recognize anomalies on an account and block fraudulent transactions before they go through at all. Besides protecting the interests of customers, such a move also upholds the image of the banking industry as a whole.
● Better risk management – Banks have long been devising strategies of offering different products and packages (loans, business advice, improved lending rates, etc.) to their customers without making a mistake of, say, scaling a wrong customer higher than they should be. With automation by their side, it becomes easier to analyze such a customer's historical data which will help in offering them customized packages.
● Enhanced security – Hackers are not resting on their oars, and they will keep targeting bank accounts for as long as they can. A bank that doesn't employ digital models of predicting security breaches, spurious emails and such potential attacks risks exposing its customers to advanced attack mechanisms from sophisticated hackers.
What the Future Holds for Banking Automation
There are different perspectives to what the future of baking automation looks like. The perspectives depend on what side of the bank-customer-bankers triangle an individual or body finds themselves on.
For the bankers, this is a very interesting time. They get to:
● Save money – At the end of every day, a bank is also a business like any other. This means they will be interested in maximizing their profits while minimizing overhead costs. With automation, they can save millions and billions of dollars that would have been spent elsewhere. For one, an intelligent assistant can now hold intelligible conversations with thousands of people at the same time, helping them make sense of their inquiries and assisting to the best of its capabilities. This is what the banks would have had to contract thousands of support workers for otherwise.
● Gain more customers – Automation means things doesn't have to be onsite anymore. Thus, interested users can open a bank account from anywhere in the world, all from the comfort of their digital units.
● Improved service – Among other things, about 60% of bankers believe more peer to peer lending operations will be completed via banking platforms in the future. This is surely one of the many services that banks are not offering yet. If automation could usher in, there is no limit to the newness of innovations we could be looking at too.
On the part of the customers, there are unlimited advantages to be unravelled as the technology matures. Lumping them up as a whole, some of these are:
● Time-saving – No one likes to join seemingly endless queues in banks. With digital platforms, you might have to be on a waiting list, but that would not be the only thing you were doing. After all, you could keep attending to personal business while waiting your turn – if you ever have to join a digital queue at all.
● Convenience – Imagine not having to go to the bank every time you needed to do something. Making everything – from opening an account to requesting a card and performing basic banking operations – available digitally is a dream come true for many customers. Perhaps the most concerned set of individuals would be the bankers.
A report by McKinsey already shows that up to 30% of the work at banks can be done by robots. This puts fear of the computer uprising into the hearts of all workers who hear such.
Interestingly, this does not mean all those workers – which will be in the millions – get laid off. The most concerned bunch would be the numbers working as bank tellers, loan officers, brokers, financial analysts, etc.
In fact, allowing robots to handle those jobs will give way to budget reduction while allowing teams/ individuals to focus on more important tasks within the baking industry. A banker will, for example, not be needed to handle all of the deposit collection, management, loan processing and such tasks at the counter anymore. Once they have a digitized platform handling that, they can focus more on building a better customer relationship for those who still find the need to come into the bank.
In another capacity, support staff and customer care agents will only handle important and very pressing needs which have been directed to them by the digital assistants. This beat having to manage a ton of routine inquiries from customers every day.
Keeping Safe in The Digital World
It is much harder for anyone who is not you to walk into your bank and request your funds. They would most likely be found out before they could even get their teller stamped. This is not the same as the digital space.
As much as digitization brings all that fun and fanfare with it, the end-users have to make sure they keep enjoying it, not fall on the other business end of things. While the bank will do everything in its capacity to prevent breaches and leaks, the most important task lies with you – the end-user.
Fortunately, it doesn't take spending several thousands of dollars or employing a security firm in keeping with e-banking security best practices. Applying simple, yet efficient, tactics like those below will get you out of harm's way more times than not.
● Make passwords unique – Never use the same passwords for more than one account, especially when your bank accounts are involved.
Hackers are in the habit of running a single leaked password across all other accounts to see where else they can get in, and that does not leave your banking platforms out of it all. It doesn't help to use the same password with slight variations (e.g., September 2012 and September2013) either. Password hackers can usually get around these in mere minutes to hours. It is recommended that you generate long, safe and secure passwords. You don't have to remember them either since you can always download a password manager for that.
● Enable 2FA – Although no two 2FA are ever the same, it makes sense to have them on your accounts. This ensures a person with only your account password can't get in without the other form of identification. This could be an OTP sent to your phone number, a hard token key, etc.
● Avoid phishing – Phishing scams have been around for long, and they are still one of the top attacks launched to steal sensitive details like bank account passwords.
If you receive messages/ emails from your bank, refrain from clicking the links in them. This is especially recommended when such emails ask for sensitive information like your bank account password, PIN, etc.
If you must check out your bank account after getting emails from them, type in the address in your browser address bar yourself.
● Lockdown your account – Besides digital platforms, USSD banking is also a great way to access your account from your mobile device. Many do not give this a lot of thought, but it could be dangerous too.You can contact your bank to disable USSD banking so it's not easy for anyone to bypass all other protections in place.
REFERENCES
● Computer Weekly - https://www.computerweekly.com/news/4500278575/Retail-banking-will-be-fully-automated-by-2020-say-bankers, date accessed 24/7/2019
● ExpressVPN – https://www.expressvpn.com/blog/protect-online-banking/, date accessed 24/7/2019
● Quartz - https://qz.com/1034873/mckinsey-robots-can-do-about-30-of-the-work-at-banks-but-they-wont-necessarily-take-jobs/, date accessed 24/7/2019
● Entrepreneur - https://www.entrepreneur.com/article/335230, date accessed, 24/7/2019
Jack is an accomplished cybersecurity expert with years of experience under his belt at TechWarn, a trusted digital agency to world-class cybersecurity companies. As a passionate digital safety advocate himself, Jack frequently contributes to tech blogs and digital media sharing expert insights on cybersecurity and privacy tools. Disclaimer: This article is a guest post from Jack at TechWarn.com.
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