June 18, 2024

Digital Banking status quo in 2020


With the evolution of Mobile, Internet and Open Banking, the whole of Banking Industry has undergone a tremendous dynamic change and with the advancement of the whole new way of technology and disruptive forces like AI, Machine learning, Robotics, and AI-powered gadgets, cryptocurrencies it’s all set to only rapidly surge the demanding real-time interaction and personalized services, as well as new regulations.

With the consumers turning tech-savvy and accessing the vital bank transactional statistics on the go becoming a usual trend with the emergence of the 4th Industrial revolution is definitely turning the heat on for most of the lead financial institutions as well the Banking arena globally.

The emergence of a complete tech-savvy era alongside the new year 2020 witnessed race to get the digital banking license worldwide especially in Singapore, UK, European territory, etc wherein digitally sound start-up banks like Monzo, Revolut and N26 have emerged, adding to the competitive landscape.

With the emergence of the latest trending “Neobanks” concept that is completely digital-based direct banks offering relatively younger generation-next to perform their pivotal banking transactional data to be accessed on the go without necessarily needing them to go around the banks with huge space and old aged physical locations.

The following are the major digital banking trends that appear quite obvious to be doing the bulk of talking during 2020 and in the upcoming years.

  1. The emergence of Fintech and its success driving more Banks to join the race: – As per the latest EY’s “Global FinTech Adoption Index 2019” report, the optimal utilization of financial technology services amongst the technology-savvy users have nearly doubled within past two years’ time period. As per the latest 2019 trends, the data estimates that 64% of digitally active consumers worldwide that also includes 27 core markets utilize the latest trending tool FinTech.

With the support of latest series of innovative services and targeted financial products, the majority of the core financial technology companies have been utilizing the disrupting traditional banking and challenging financial and banking institutions to rethink on its banking products by rolling out services like in-store mobile phone payment platforms or offering nonbank money transfers.

  1. Emergence and Adoption of NeoBanks: – During 2020, with the consumers more drifting towards the ease of digital-only platforms, NeoBanks pose a definitive challenge towards the traditional banking methodology still prominent in the banking arena.

This latest technology equipped NeoBanks primarily and strategically target specifically the unbanked population and tech-savvy millennials with their cost-effective structures (no monthly fees, no withdrawal or overdraft costs), along with offering personalized customer experiences (budgeting and money-tracking tools, real-time balances).

  1. Continuing the AI Evolution: – Although the AI has just slowly evolved and adopted globally, the banking arena is completely looking forward to AI to improve drastically all their business operations as well as an enhancer for the User experiences utilizing live Chatbots as well as fraud- and risk detection features. With the statistics from April 2019 IHS Markit Report, the net business value of AI in global banking will reach $300 billion by 2030. Within 2019-2023, North America is expected to become the largest market for AI in the Banking arena reaching an estimated $79billion. The report also confirmed that the Asia-Pacific, Europe, and other global regions will roll out more AI solutions in the banking sector between 2024 and 2030.

As well the interaction and lead financial transaction through chatbots is going to surge ahead and it will make 79% of chat-driven customer interactions in 2023. As well its also estimated according to an early 2019 report from Juniper Network that with the optimal Chatbot Utilization, the economical value of the banking arena will reach an estimated $7.30 billion worldwide by 2023 and would surge ahead from $209 million as recorded during 2019.

  1. Rejuvenating Blockchain Technology: – Disruptive technological force like Blockchain supports off largely the financial and Banking arena and crept up from being a slow starter to an innovative tool as it allows for the decentralization of data storage. That means there will be safer transactions and greater asset transparency.

As predicted by The World Economic Forum, the financial sector will increasingly experiment with hybrid blockchain models, while the public sector will increase its use of smart contracts.  Major banking pioneers like Standard Chartered, American Express, and Banco Santander, have already got in close, deep association with Ripple (a global blockchain remittance network) to facilitate cross-border payments using blockchain.

According to data compiled from a PwC data from June 2019, when most of the primer global financial institutions were asked about the continuation and its right implementing of emerging technology—like blockchain and AI—37% said they had fintech-based products or services available to their customers.

More than a fifth (22%) of these companies said they had products or services in the pilot stage. There is no doubt that there would be a dynamic boom in the digital banking landscape in the upcoming years and that it would surely transform the Banking, Asset Management and Financial arena to a completely different level.



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