Digital transformation in Banking: Past, Present and Future

Published January 3, 2018   |   

Regardless of how much people earn, the jobs they have or whether they’re part of the workforce, banking is a necessary routine.

It may not come to mind as one of the most technologically advanced industries, but has still undergone some significant advancements that make the industry at large ready to serve an increasingly digital society.

Some banks have no physical branches

Not so long ago, one of the first things people verified before switching to new banks is that those financial institutions had locations near their homes. Now, that’s no longer as necessary as it was, especially since numerous banks only operate online and don’t have facilities to visit.

In addition to the convenience of not having to find the appropriate banking brand when traveling, these online-only banks typically provide excellent customer service.

They’re also known for other perks, such as low fees and the option to choose familiar names such as Capital One, which has an online-based business arm.

The rise of 24/7 mobile banking

Typical business hours don’t always suit people who work night jobs and sleep during the day or are sole caregivers for family members who can’t leave home or stay somewhere unattended. However, thanks to the increased prevalence of banking apps, it’s possible for people to deal with finances whenever their schedules suit.

In addition to the banks above that exist in the digital world — and usually have their own apps — most of today’s leading banks know that to compete in the industry, they must cater to emerging customer needs.

That means designing feature-rich apps that help people use their time productively. Customers can transfer money, check their accounts, and talk to customer service agents with just a few taps on their smartphones or tablet screens.

Also a few years ago, people often raised their eyebrows at the thought of banking online, especially if they had security concerns. However, things have changed. The Mobile Ecosystem Forum conducted its Mobile Money Report study and found 61% of respondents engage in banking via their smartphones, and nearly half of respondents (48%) use mobile banking apps.

However, as mobile banking continues to gain strength and recognition in the marketplace, it’ll be perpetually necessary for providers to keep their platforms secure. Apps could become tempting targets for hackers, and if they become compromised, people won’t be so willing to use them.

A diversification of accepted currencies

Silver and gold are two of the longest-standing forms of currency, with the latter considered by some as the only metal that universally symbolizes wealth. Also, silver mining has occurred since as far back as 500 B.C. People can find references to both these valuable metals in Greek mythology, books of the Bible and other ancient texts. Back then, banking often occurred in temples.

Today, there are still various accepted forms of currency, with certain kinds being more popular than others depending on trends, geographic locations and so on. Paying with a debit or credit card offers a widely established way to buy things without carrying cash.

People are also exploring cryptocurrencies, such as Bitcoin, an entirely digital form of payment. They appreciate the advantages it offers, such as sending money anywhere and at any time.

Bitcoin does not have a single governing body determining usage. That fact appeals to people who prefer being in full control of their money.

Although Bitcoins are one of the most well-known cryptocurrencies, there are hundreds of others to consider as well. Litecoin, Ripple and Ethereum are a few of them.

Traditional ATMs are losing popularity

There was a time when the concept of getting money dispensed from a hole in the wall seemed like something straight out of a science-fiction novel. But now, that’s commonplace as people use ATMs.

However, in some places, such as India, digital money transfers are so popular that banking institutions are removing ATMs from the country. In the future, people may see them as fixtures as relevant to the modern world as dinosaurs.

The machines are often located in urban areas where people can easily rely on other ways to get money. That makes sense, especially because digital means are more private in the right circumstances and do not include the safety risk of a thief snatching the money immediately before a person reaches to retrieve it.

Banks have also looked at more diverse uses for ATMs. Returning to the example of India, there are some banks there evaluating ways of presenting ATMs as platforms for money transfers. In Ireland, people regularly use ATMs to purchase credit for mobile phones.

Also, Wells Fargo recently unveiled cardless ATM technology, which is ideal for people who realize they forgot their wallets during evenings out. Individuals use a corresponding app that distributes numerical passwords authorizing access to the ATM. Other banking entities use QR codes to verify identities.

As the banking sector keeps pace with people’s needs and desires associated with managing their finances, it’ll be interesting to see how opportunities continue to evolve.

The industry has already come a long way and obviously understands the need to continually deliver up-to-date capabilities for stakeholders.