April 14, 2024

In recent years, we’ve seen the banking industry innovate in several areas and incorporate the traits and practices that were once the trademark of fintech start-ups. Banks and credit unions are innovating faster by targeting, delivering proactive advice, expanding their services, re-configuring delivery channels, integrating payments and using blockchain technology.
The online banking sectors all over the world are becoming more focused strategically besides making huge advancement in technology. This can be helping them to meet customer expectations while also defending market share against increasing competition. New innovations and developing new solutions by taking advantage of information, advanced analytics, digital technologies and new delivery platforms have now become critical.

Blockchain technology, Instant pay, APIs, Chatbot, cardless ATM, Biometrics, European Union, financial, Non-traditional
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Some of the popular innovations within the Online banking sector so far includes;

  1. Customers taking more control of their data
  2. Application Programming Interfaces (APIs)
  3. Expanding Open Banking
  4. Commitment to Physical and Digital Delivery
  5. AI-Driven Predictive Banking
  6. Cardless ATM service

1. Customers Are Taking More Control Of Their Data

In the past and till date, banks, lending institutions and credit bureaus are selling and sharing consumers financial data without the consumers’ knowledge or consent while data aggregators gather information without the consent of monetary services providers. However these practices are set to disappear. A significant number of consumer banking accounts include controls that allow consumers to choose which third parties can access their data and the way. Some fintechs are also testing apps that allow customers greater control over how third parties access their data. Some innovative financial organizations are creating ways to enable their customers to sell their own information. Smaller banks are seeking to search out ways to permit consumers a say within the sharing of their data with third parties, with the cooperation of their core banking vendors. Finally, the European Union’s General Data Protection Regulation makes it mandatory for financial and other companies registered inside the European Union and foreign firms that operate in the European Union to ask consumers for explicit consent before using their data or sharing it with others.

2. Application Programming Interfaces (APIs)

It allows two software systems, apps, or other services to communicate with one another and share data. In our hyper-connected society, the growth or development of a bank will depend on its ability to create and participate in digital ecosystems. A major prerequisite is the ability of the bank to integrate both its products and services, internally and externally, with various 3rd-party services and applications. It allows bank products to communicate with each other or with 3rd-party products in real-time and in an exceedingly secure way. For example, it enables core banking systems to receive money transfer requests from customer mobile wallets, card systems, 3rd-party financial service providers, payment switches and many others. Other benefits of Application Programming Interfaces (APIs) that accelerate digital online banking transformation are,

  • Data insights
  • New revenue
  • Agility

3. Expanding Open Banking

An increasing number of regulatory bodies globally are making it mandatory for banking organizations to permit customers to share their data securely with third parties in a move to spice up new financial services and enhance the competition within the banking industry. Consumers have a lot of freedom and control when interacting with their financial service providers with account and payment data being made available through secure application programming interfaces (APIs). Open banking application programming interfaces (APIs) boost innovation and collaboration, and aid in growing banking ecosystems to shape consumer’s lifestyle better with a lot more than just financial services. There is an increased emphasis on consumer value proposition with the firms offering innovative solutions due to consumer consent being a core part of open banking strategy. The expansion of open banking will also push non-traditional financial firms to collaborate with traditional banks and innovate for the consumer.

4. Commitment to Physical and Digital Delivery

An increasing number of traditional financial services companies are introducing digital online banking entities, as many transactions are moving to digital channels and also to combat the high cost of a traditional branch network. From launching digital-only banks to collecting deposits, to using digital platforms for lending, investing and speciality services, banks and financial firms are focusing more on quality customer experiences and increased value for customers. These organizations are gunning to protect their current customer base, while others are attempting to expand their market share by introducing first-to-market products that are consumer-focused. Thus, the client expectations and also the cost of alternative means of delivery are factors that play a vital role in structuring the banking industry and bringing in innovative new delivery models.

5. AI-Driven Predictive Banking

For the very first time, the banking industry is consolidating all internal and external data and building predictive profiles of customers in real time. With rich, accurate and financially viable consumer data, financial institutions know their customers very well and are ready to offer advice for the longer term, while increasing security and efficiency. With robo-advisors and AI-driven chatbots, financial institutions offer the next course of action with personalized solutions in real time and also universal cash management solutions that address implicit needs in an integrated service. Information with insights and figures are contextually delivered with the aim of proactively changing customers behavioral patterns.

6. Cardless ATM service

A cardless banking service for ATMs allows customers to carry out ATM transactions effortlessly by using only their mobile numbers. For this service, customers must activate their mobile number through their bank or their mobile online banking app. Once verified, customers can visit the closest ATM and insert their mobile number, one-time pin(OTP) and they can also go through the banking app and perform their transaction. Cardless banking allows customers to pay bills, withdraw cash, request for cheque book, request for a mini statement and make balance inquiry.

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