5 Innovation Technologies That Will Define Banking in 2019
Standing out from the crowd in the ever-competitive banking sector can be hard work.
And with so many new fintech players grabbing market share from traditional financial institutions and lenders, banking executives should embrace technological innovations if they want to remain relevant for the 21st-century consumer.
Below, we dive right into 5 technologies to consider for your financial business as we head into 2019.
One of the biggest opportunities in the banking sector is voice technology. If you’ve yet to invest in a voice strategy for your organization, you’re behind the times and should work to implement one as soon as possible to maximize brand awareness and give your customers what they want.
Some reports estimate that 50% of all searches will be conducted via voice by 2020, only a year from now. Meanwhile, the mass adoption of devices like Amazon Echo, Google Home, and Apple HomePod are at an all-time high with over 50M Americans owning at least one smart assistant device in their homes.
Given these stats, you cannot afford to put your head in the sand and ignore the fact that a voice search revolution is underway — it’s right in front of us and demands every banking executive’s attention.
Banks should embrace user engagement opportunities that voice search is bringing to the table. And they should find creative ways to deliver their financial services directly to their consumers, hands-free.
Developing Alexa Skills, for example, could help provide users with information about their finances and upcoming bills, or alert them to issues about their minimum payments. Offering easy, voice-controlled access to their accounts will empower users to stay on top of their finances.
The U.S. Bank, for example, was one of the first major players to launch an Alexa Skill that can check balances, read out payment due dates, share account transaction history details, and even make payments to other U.S. Bank customers without a touch of a button or smartphone screen. Capital One, on the other hand, took voice search to the next level, allowing users to ask questions such as, “How much did I spend last weekend?” or “Tell me what I spent on Tuesday”, personalizing and humanizing the interaction customers can have with this bank via an Alexa device.
Artificial Intelligence for Fraud Detection
When it comes to fraud, the banking sector is still struggling. Direly, I may add.
80% of declined transactions are not fraudulent, but with 14.2M credit card numbers exposed last year alone, banks have to tread carefully to ensure funds are not released without customers’ permission. At the same time, financial institutions must also provide a frustration-free service that keeps customers on their side and away from third-party vendors. PayPal, Venmo, and Apple Pay, for example, cut costs and encourage users to spend less on their credit and debit cards.
One technology that you should consider in 2019 is artificial intelligence for fraud prevention, allowing you to detect false positives and keep customers on your side.
We predict that there will be a rapid uptake of AI capabilities adoption across the banking sector to alleviate compliance-related manual efforts.
In an effort to cut costs and provide a personalized, immediate response to user questions, more and more banks are using chatbots as part of their customer service and onboarding processes. Whilst chatbots are nowhere near perfect, they’re closer to delivering a first-class service than ever before.
There are many chatbots in the financial industry designed to offer financial advice, open new accounts, provide support and improve the user journey, but not all were created equally.
The Bank of America, for example, launched its Erica chatbot last year that can send users notifications, offer credit report updates and provide suggestions on how to save money, while JPMorgan Chase launched COIN, which has reportedly saved the company over 360K hours of manual labor.
Cleo is another product that has caused shockwaves in the industry.
The artificial intelligence money-managing assistant works on Facebook Messenger and Amazon Alexa and offers a friendly and humorous way to manage money, using emojis, GIFs, and funny responses to engage and delight customers.
The application does not store banking login details and uses 256-bit encryption. It also offers endless value to millennial users and has so far generated more than $10M in Series A investment.
Passive Penny Savings
Barely a day goes by without millennials and their finances hitting the headlines — latest figures suggest that stagnant wages and rising house prices are making them poorer than previous generations.
One banking technology that is helping them to save money for their future is the ‘passive’ penny’ business model, designed to help millennials save a little every day, without having to commit to putting away hundreds or even thousands of dollars in a single transaction.
Acorns, for example, link to your debit card, round up the payments to the nearest dollar, and then invests the leftovers. If you spend $3.29 in Starbucks, for example, Acorns will take the 71¢ change and put it into a savings account, investing for future growth. The Bank of America has already cottoned on to the success of the scheme, launching its own Keep the Change program. Digit. co is another fintech technology that uses Artificial Intelligence to predict the amount of money that Millennials won’t see ‘disappearing’ from their accounts and into a savings account.
What do all these solutions have in common? Effortless savings. It may not be huge savings. But every 50 cents saved once every 2-3 days will add up for sure!
Smart Automated Investing
Many millennials consider the idea of investing risky or confusing, and only one in three young people have money invested in the stock market. However, new investment solutions are offering to ‘dumb down’ investment into simple, straightforward terms & practices and use sophisticated artificial intelligence to manage users’ portfolios. This means everyone, regardless of financial knowledge or personal circumstances, can invest.
Betterment, for example, is a ‘robo advisor’ that helps users figure out their financial goals and then offers advice and investment opportunities best suited to their attitude to risk and ambitions. The firm was declared the largest independent financial advisor on the planet by Barron’s at the end of 2018, with more than $15.5B under management and 40K global customers.
Don’t Let Innovation Pass You By
In the banking sector, you cannot afford to sit still and watch technological innovation take your customers away. Investing in technologies and user experiences in line with what modern customers expect to use will not only allow you to streamline operations and provide a consistent experience but give customers an all-around better service.
Brand loyalty is a thing of the past. Innovating your financial product and delivering new technologies and ideas to your customers is the only way to succeed in 2019. Don’t delay — invest in your financial digital product strategy today.