COVID-19 outbreak has already brought a significant change to our lives. It has changed the way most of the developed world lives and works around us, including travel, healthcare, and food. The financial services industry is also facing challenges on multiple fronts such as shelter-in-place and social distancing, which means only a few customers will be able to visit the physical branch of the bank that will necessitate telephone support and media. However, the financial sector will see no major paradigm shift.
Several fintech companies are already placed to deal with digital demand and remote working requirements of a number of individuals. It is helping in dealing with some funding uncertainty, resources, and support crunch that walks alongside during the time of the pandemic. Read on how the financial services are dealing with the latest trends to uplift digital banking.
1. Overcoming legacy systems
Many financial systems are still not ready for digitization. They are build-up on the base of outdated and old systems while realizing the need to implement the latest fintech products. While some of the banks have led significant efforts to bring in digital transformation, a lot of them still have not transformed their back offices.
Financial services of a few developing countries such as India are way behind the rest of the world, which can create bigger problems for community banks, insurance companies, and other smaller players without IT and innovation budgets. Fortunately, several companies are helping in solving these problems, either by building a new system or bridging the gap between old and new digital tools. Then enters the technology layer that serves as an adapter between legacy systems and digital tools, allowing banks to overhaul their back offices. The OpenLegacy (API integration and API management) software claims that it can create API keys in just a few weeks for outdated systems.
2. Virtual customer experience
Now that there is a limited movement to offices and on-site meetings, financial institutions should work on the way they communicate with their customers. There are examples showing that this is possible where the company’s app is at the center of its customer service.
Many financial firms have chosen to adopt technology for rendering financial services and yet cannot do well when it comes to communicating with their customers. It includes conducting zoom calls, sending out emails, and keeping track of customer communications from customer success and regulatory standpoint. This is where Natural Language Processing (NLP) steps in, with many companies providing solutions that talk about categorizing conversations, emails, and other communication channels with customers. It is on the basis of many chatbots that help in providing quick answers to the queries of the customers.
3. Digital identity
Digital identity is the talk of the town. Suggestions are already made that air passengers will need to prove their medical well-being. With social distancing and closing of many government offices, digital solutions will require identification of papers, and share digital ID for further consideration. In the new era, customers will be able to open an account without even physically going to the branch. The financial institutions will have to authenticate that a user is actually who he claims to be despite he not having his ID card.
The security measures such as two-factor authentication, strong passwords, secure code encryption don’t really provide a digital identity for moving funds. To help and save the cause, there are two companies that help in providing validation of digital identities, namely, Trusona and BioCatch. They also specialize in identity theft protection and biometric profiling.
4. Robotic Process Automation (RPA)
RPA holds a number of capabilities, and therefore, it is highly adopted and accepted in the fintech industry. It is a term used for a virtual robotic workforce that automatically performs mundane and repetitive tasks without human involvement. If you are wondering what these tasks are that the robotic workforce can perform, here are a few to name—replace lost and stolen credit cards, reconciling scanned files with consultants’ timesheets, and monitoring new regulations.
During the COVID-19 crisis, RPA is becoming more important than ever. It is the time when companies are choosing to maximize employee efficiency, and thus, RPA works as a supplement with these workflows. The RPA market is well-established, and some of the renowned leaders of the market are Automation Anywhere, Blue Prism, and UiPath.
RPA technology is so powerful that every company would like to adopt as soon as it understands its incredible power.
5. Zero or no cash
We all have seen campaigns and emails talking about the importance of paperless money. Considering them plus the way social distancing is making the use of cash difficult, ergo the promotion continues. Paper cash can be a means of coronavirus transmission; thus, it is suggested to push contactless payments.
A country like Sweden is working on a plan to introduce its digital currency by 2021 and become cashless by 2023. This initiative of the digital dollar will allow the government to distribute funds to individuals and families with just a few keystrokes. Deposits won’t need to take place in person anymore; retail bank branches will see less movement of customers, if not eliminated.
Digital transactions will dramatically increase, putting even greater stress on anti-money-laundering compliance. So, the world of retail banking is going to change. Though there is no exact prediction on the speed of these changes, banks have to start preparing immediately and shift all the services to one-click on a smartphone.
Apart from the trends that financial companies need to follow, the situation requires constant and careful handling as these financial companies seek to reassure companies, respond to their concerns, and earn their trust during this volatile period. These trends portray a positive indication for your financial company if you adopt them. While working on these trends, do not forget to upgrade the digital infrastructure and services for handling the rising digital demand.