Digital innovations in banking and financial services
The banking sector is constantly evolving, new technology is continuously being introduced into banking systems and leaders in the banking industry are continuing to implement ground-breaking financial products and services. There has been strategic investment in banking innovations through crowdsourcing, piloting, collaborations and partnering to develop revolutionary banking solutions. With the ever-changing banking sector new regulations and revised banking standards have been developed. Digital-only banking is perhaps the most significant change that has happened in the financial industry in the last few years.
Innovation in online banking
Public buying behavior and modes of payment have changed dramatically over the past decade, and they are rapidly phasing out paper-based and cash dependencies, and moving to online, mobile and internet business. Banks and financial institutions are reacting by providing a wide range of appropriate new features and facilities. This new ‘cashless economy’ now works electronically using the internet as a gateway. Account owners can manage most aspects of their accounts over the internet, rather than having to visit a ‘bricks-and-mortar’ local branch or speaking to someone the telephone.
- Digital banking extends all of the online features offered by regular banks to include the activities undertaken by the business world directly, like booking travel tickets and purchasing a product or service online – everything that falls under the heading of ‘e-commerce’.
- Smartphone applications – AKA mobile banking – adds a lot of scope in the virtual banking space and encompasses transactions through mobile wallets, digital payment modes, prepaid debit cards etc. These are easier to design, build and sell, which means that they are more flexible, offer a wider range of features, and are generally cheaper than traditional computer-based applications. There are many mobile apps which offer safe and secure transactions and many financial institutions are committed to further development of cutting-edge services.
New banking technology innovations
Allowing a customer access to full banking services in real time, through any channel they choose is one of the results coming out of EU legislation known as the second Payment Services Directive (PSD2). Whether it’s from an online terminal in a bank branch, an ATM, a voice call or online it allows customers the freedom of choice to access their accounts whenever and from wherever they choose.
Traditional banks are spending vast amounts of money to develop new systems and features so that they can keep up with the rapidly changing demands of their customers. As well, the institutions are looking for ways to streamline their own operations, improve performance and reduce overheads – any bank that fails to do this will quickly lose out in the face of competition both from traditional banks and from the new fintech players.
Completely ‘digital only’ financial institutions also provide customers with seamless access to the whole range of activity, even though these banks do not compete with traditional banks in regular business fields such as credit, overdrafts, mortgages and so on. They can generally offer several distinct advantages over brick-and-mortar banks in the form of reduced costs, user friendly interfaces, wider range of features and easy account openings.