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Technology and its Impact on Banking

When was the last time you actually physically walked into your local retail bank? Days, weeks or in some cases months ago? So why is it that one of the biggest business sectors in the world is slowly becoming obsolete? One word: technology.  Yes, we all know that since its inception technology has made a huge impact on every area of our lives. In fact, it is the evolutionary trend that is continuously changing the way businesses operate. We are now equipped with alarms that can detect poisonous substances in our air, medical equipment that can identify life-threatening conditions, and the ability to monitor our homes via smartphones. As with other sectors, the financial world is currently undergoing technological advancements in a big way. Historically, the scope of banking was merely comprised of money storage and lending funds. As with everything, technology is revolutionizing the industry. Its evolution is something that we all benefit from today and it is only projected to rise. Financial Technology (FinTech) is becoming commonplace in the sector that incorporates technology in efforts of improving financial services activities.

banking technology

Below are some of the major ways that technology improves banking services:

Customer Service

The days of “Hello Sir/Ma’am welcome to….” are far behind us.  It has since been replaced with asking your smartphone to tell you your daily balance or waiting for your daily balance notification. In the past, a good customer service team was vital for any company involved in finance. Anything that involved the handling of money or financial matters required humanization and a trained staff to be able to help sort out problems and provide assistance. That notion has since been replaced with telebanking and chatbots.

Most ATM’s have been upgraded with an enhanced tele-assit feature. With the push of a button, customers can receive assistance from a banker via video conferencing. Now, I am not saying that these changes are automatically replacing personal meetings with virtual ones. There are still some functionalities that can only be done through human interaction inside of the branch like notarization, opening an account, changing personal information and loan applications.  For things as simple as cashing a check, making a deposit or transferring money, utilizing Artificial Intelligence is a great time saver.

Online Banking

Through gadgets and apps, access to funds and reports is easier than ever before. Online banking has allowed individuals the ability to perform basic functions that at one time were only available in a branch. People would go into their local branches to withdraw money, transfer funds, receive statements and sort out other financial questions. Oftentimes this would require someone using their lunch break to go to the bank, or even take time off from work.

The sophistication of online banking is evolving daily. One feature that is taking the world by storm is the ability to access the ATM through the banking app on your smartphone. Let me clarify, instead of digging for your card at the ATM, customers can now log in to their mobile apps and receive a temporary code to use at the ATM instead. The code serves as the means of identification. This process increases safety by reducing debit card theft at the ATM.

Financial exchanges like Zelle allows users to switch between banks and transfer money between individuals with the click of a button. We live in an age where we can access our bank accounts on phones, computers, and tablets. More recently, we have been able to open a digital bank account with online-only institutions.  This is the kind of thing that is disrupting the banking sector and is one of the bigger impacts on the industry and consumers.

Mobile Payment Application

Mobile payment applications such as Apple Pay and Google Wallet allows users to store their credit or debit card information for later use. This affords them the opportunity use their mobile device to pay for items rather than having to fumble through their purses or wallets to find their cards. At the point of sale, the individual chooses the card to pay with from the app menu and then touches the mobile device to the in-store reader.

Fraud Detection

Fraud identification and prevention is a matter that should be handled by both human and technology equally. The technological system provides advanced detection of suspicious activity and helps track potentially fraudulent transactions. Trained staff then looks through the information and confirms the activity. All in all, it takes a team effort to keep account and cardholders safe.

Of course, we’ve only scratched the surface of how technology is redefining banking. For consumers, these changes provide both speedy and more direct access to information and funds. Although technology provides efficiency, it remains the consumer’s (and the banking institution’s) responsibility to manage and protect account activity.

 

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Danielle Scott

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