New technologies to improve the banking industry’s value proposition

The technological and cultural transformation of banking crosses a physical-digital model that improves the sector’s value proposition

The industry is undergoing one of the most radical transformations affecting every dimension because it has spent more than 10 years immersed in constant change.

There seems to be no end in sight for this transformation since it is digital as well as cultural. The latter is because in-person bank transactions are deeply rooted in the day-to-day life of older generations, which means that for the time being, the sector must maintain a hybrid physical-digital model to ensure the value proposition covers all types of customers.

Some of the key technologies that will make these technological and cultural transformations feasible include:

• Cognitive and artificial intelligence (AI)

Artificial intelligence is a reality, and companies that fail to integrate tools equipped with this technology in their key transactions will struggle to survive in the future.

The transformation we refer to requires going one step further because the AI of the future should be closer to how people think and act. These cognitive technologies already exist and make it possible to offer services as if our banking agent is always by our side.

• Robotization for process automation

Banks should be swift, flexible and highly efficient organizations. This requires bringing in robots that detect, automate and improve internal processes.

• Biometrics for digital authentication

In an environment where customers are digital, secure authentications are needed to certify our identity before performing certain bank transactions. This is why biometric technology will play a key role in unambiguously and unequivocally identifying people online.

• Cybersecurity and the fight against fraud

In a digital world, banks are more exposed than ever to criminals, who in turn will pose increasingly greater threats. As a result, computer systems, transactions and private user data must be completely safeguarded.

Highly evolved and sophisticated tools already exist to fight against cyberattacks and protect all computer systems. However, artificial intelligence tools will be needed to proactively help detect fraud in real time. This article explains a proof of concept being carried out in Mexico using machine learning.

• Data privacy

This refers to using millions of interconnected data entries from which to extract conclusions for several purposes, but always ensuring user privacy.

It may seem contradictory and even a great handicap for the future development of the banking industry. However, smart algorithms capable of truly making data anonymous without losing information along the way will play a key role in ensuring its use and improving the sector’s value proposition.

• Internal collaborative tools

The transformation must be fast and efficient, ensuring that everyone feels involved and works together. Knowledge must be shared across departments and reach the entire company equally.

Innovation should be company-wide and form part of people’s day-to-day work. As a result, collaborative tools will play an important role in this transformation process.

• Talent through gamification

People will be key in this transformation, so there must be a focus on talent. However, traditional learning methods have become obsolete in helping employees evolve at the same speed as technological advances.

The best way to learn skills and aptitudes, in addition to knowledge, is through experience. Gamification tools (using games as well as interactive online or shared challenges with colleagues) have proven to affect and retain concepts, with success rates above 70% compared to traditional training methods.

• Analytics

It is important to be present and close to customers, and accompany them on a day-to-day basis. This requires analysis technologies that help provide in-depth information about every customer. As a result, banks will be able to anticipate their needs and offer better products and services (such as consumer loans or transactional/financial management for their business).

Technology is changing the world and will further modify how banks make their value proposition reach customers, along with their products and services (many of which do not currently exist).