For a long time, the banking industry has been regarded as one of the most conservative in terms of technology. However, the banking sector today is rapidly evolving.
There is an emergence of startups and neo-banks, which are changing the way people engage with their banks. Digitalization, customer demands and technology are also making an impact – Mobile Banking has become the norm as customers can access their accounts anywhere, anytime from any device with a mobile phone or tablet. According to a statistic shared by Think With Google, 73% of smartphone users have signed up for financial services and are using them regularly.
On top of that, the introduction of blockchain technology and other innovations are providing a completely new approach to banking. These changes are also affecting all aspects of banking including mobile apps, online payments and even ATMs. In this article, we’ll try to explain the most important trends of global development in banking technology in 2023.
Trends and technological development in banking sector
These days technology is playing a key role in the banking industry. With the increasing use of digital technologies, online and mobile banking has become easy and convenient for customers to perform their financial transactions. The transition from traditional banking to digital technology has opened up new opportunities for banks to serve customers better than ever before.
Currently, the latest development in banking industry includes:
- Artificial Intelligence: AI can help reduce the number of customer complaints by predicting consumer behavior based on past transactions and preferences in order to proactively alert customers about any potential risks or issues before they arise (e.g., fraud alerts). It could also improve customer service efficiency by using machine learning algorithms which optimize costs based on historical data such as hours when people normally call up banks versus weekends – giving agents better information, so they know when there isn’t much activity happening at certain times throughout weekdays/weekend days – thus allowing them more time off during those periods without impacting business.
- Cloud Computing: It’s a technological advancement that is having a significant impact on the banking industry. Cloud computing enables banks to access new business opportunities and deliver services more efficiently. Banks can decrease their operating costs and capital expenditures by using cloud-based systems, while also ensuring that customer data is protected. Banks also leverage cloud computing to provide online payments and other digital money transfers.
- Data Analytics: Data analytics helps analyze huge volumes of data generated by various sources such as mobile phones or sensors deployed throughout their locations so that they can make timely decisions based on customer feedback from social media platforms like Facebook or Twitter.
- Blockchain Technology: Banks are also adopting blockchain technology to enhance security, transparency and efficiency of their processes. For example, a few banks have developed their own cryptocurrencies that can be used for cross-border payments.
- Zero trust: Cybersecurity is a major concern for financial institutions. As attacks become more frequent and sophisticated, banks need to bolster their security measures. One approach that can help is “zero trust”. Zero trust assumes that no user, workload, device or network can be trusted. Every access request should be validated on all available data points, including user identity, device location and other variables. Banks should adopt a zero-trust architecture as part of their enterprise environment to effectively safeguard customer trust.
Mobile banking market in 2023
Mobile banking has already become a part of our life. The use of mobile apps to manage your personal finance is rapidly increasing, and a significant number of customers have already started using this service. According to a study by Insider Intelligences, a poll found that 89% of respondents use mobile banking. Younger generations are not the only ones who benefit from mobile banking; 79% of baby boomers and 91% of Gen Xers also stated that they use it. It’s a convenient way to access your bank account when you don’t have the time or ability to visit a physical branch. With mobile banking, you can perform basic tasks such as checking your balance, transferring funds between accounts, paying bills and more. You can even deposit checks using your smartphone!
As reported in ConsumerAffairs, banks that provide mobile banking services can gain a competitive advantage over their competitors because it’s easier to reach customers via their smartphones than through physical branches or other channels. On top of that, online and mobile banking platforms are among the most effective customer retention tools for banks because 82% of account holders mention these services as an important reason they have not switched institutions.
Statista forecastsmobile app revenue to reach $438 billion in 2022. Furthermore, the revenue of in-app purchases will probably climb to $203 billion. An annual growth rate is estimated around 6.58%, which can turn the market growth to $565 billion by 2026.
Mobile banking apps are evolving from information-only platforms to robust transactional ecosystems. Today’s customers want their banks to provide convenient, fast, and secure transactions via multiple channels, including mobile devices with an intuitive design and user experience.
Latest mobile banking trends
Let’s look at the main trends of mobile banking that are gaining popularity:
- Mobile banking applications: Banking services available on mobile devices have become a necessity for many consumers. Mobile banking applications have been developed to optimize the customer experience, with many providing added value services such as push notifications, self-service options and real-time alerts.
- No Code/Low Code development: With the increase in digital transformation, no code (or low code) development has become popular among developers as it allows them to quickly develop apps and build prototypes without having any prior coding skills. No code platforms allow users to create their own apps using drag-and-drop features, while also allowing them to use pre-built components or templates that can be customized easily without requiring any coding knowledge whatsoever.
- Open Banking API: This is a trend that has been disrupting the industry for the last few years. Open banking allows banks to share their banking information with third parties, who can use it to build products for financial analytics. It’s a hot topic for many countries, as many governments have begun to introduce open banking legislation in order to streamline this process. For example, the EU and India have passed open banking regulations, while the US is merely in the beginning stages of passing such laws. Regardless, it is expected that these mobile banking trends will shape financial services for years to come.
- ABCD verification: It’s a step up from the two-factor authentication currently in use by most banks. Advances in biometrics and device data are making it possible for banks to verify your identity more accurately than ever before. The ABCD verification process is a four-step process that uses biometrics, behavioral data, and device data. Banks can use this new technology to verify your identity through voice recognition (A), facial recognition (B), typing patterns (C), or location data (D). The more information you give about yourself when you log into mobile banking apps, the better the bank can verify your identity accurately without having access to sensitive financial information like credit card numbers or bank account logins.
- Biometric authentication: It’s a secure way to use your mobile banking app. It uses your fingerprint, voice or face to identify you, so it’s more secure than entering a password. You can use biometric authentication in many apps such as Google Pay, Samsung Pay and Apple Pay. It’s easy to set up and can be used on your mobile phone, laptop or tablet. You’ll need to make sure that the device you’re using has a fingerprint reader, camera for facial recognition and/or microphone for voice recognition.
- Virtual assistants: Users are increasingly connected 24/7 via mobile devices and demand instant access to services from anywhere at any time. This makes it important for banks to develop an online presence that ensures quick response times and convenient access to information about products and services through multiple channels such as social media, email or even live chat on websites or apps. Customers don’t want to wait around while someone reads through their queries over the phone before getting an answer; they need answers now – preferably within minutes! AI can be used in mobile banking to provide AI-supported customer service. It’s a real game changer for the financial services industry and its role will only grow with time. In 2023, it is expected that over half of all banks will have adopted AI into their operations, with more than two thirds offering it as a core product or service by 2024.
- Robo-advisors: It’s another trend that is gaining popularity. These tools use algorithms to make investment decisions based on customer information such as age, financial goals and risk tolerance.
- Gamification: It’s the process of adding game elements to an experience, in order to engage users and increase engagement. Using gamification techniques in mobile banking is a trend that has been gaining momentum over the past few years, and will continue to do so into 2024. The use of gamification in mobile banking allows banks to keep users engaged while they are not actively using their apps or interacting with other online channels. Gamification can help banks to increase loyalty, improve customer service and reduce the cost of acquiring new customers.
- Cardless ATM withdrawals: One of the most popular future trends in mobile banking is cardless ATM withdrawals. Some banks have already introduced this feature into their ATMs. Using this feature will reduce or eliminate the need for debit cards in the future. With the usage of a banking app, users will be able to log in to their bank account and do transactions without using physical debit cards. According to a report by Small Business Trends, about 70,000 banks in the U.S. will offer cardless withdrawals in the future.
There are many factors that will contribute to shaping the future of technology development in the banking sector. The trends show that more and more people are getting comfortable with technology, and it is becoming a crucial part of their lives. With the introduction of new technologies like AI, blockchain etc., it has become easier for banks to offer innovative solutions to customers by leveraging these emerging technologies.
Mobile banking is a rapidly growing market with great potential. It provides consumers with a convenient, secure way of managing their finances in an increasingly digital world. The future success of mobile banking depends on making it more interactive and easy-to-use, while also improving security measures to protect users from fraud and cyber crime. Mobile banking is a very popular service among consumers. In fact, the majority of people in developed countries use their smartphones to access financial services.
The recent report by Market Research Future (MRFR)predicts that the mobile banking market will reach USD 3.47 billion by 2030, growing at a compound annual growth rate (CAGR) of 15.4%. This is a huge market opportunity, and many businesses are now trying to get a piece of it.
All this points towards an exciting future of mobile banking where we can expect new products and services which enhance our lives at every step!
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