5 mobile banking and banking tech trends to know about

It now seems difficult to believe that mobile banking was introduced in a nascent form around 20 years ago. While it initially provided the option of carrying out transactions through SMS, mobile banking today is witnessing a rapid technological evolution. 

This evolution in banking technology was accelerated by the COVID-19 pandemic. As social distancing became the norm, mobile banking assumed renewed significance. During the peak of the pandemic, it was observed that 8 out of 10 Indian metropolitan citizens preferred mobile banking. IDFC FIRST Bank recognised this undercurrent of change, and its mobile banking app continues to be a flag-bearer in this banking revolution. 

While customer experience is an inherent benefit of the technology transformation in mobile banking, security is always a concern. Therefore, most of the future trends of mobile banking have customer experience and safety as key drivers. We look at some of the most prominent recent trends in banking shaping the field in the near future.

Biometrics
 

Biometrics will be strengthening digital security in a big way in mobile banking. While fingerprint authentication and facial recognition are already used in mobile technology, phone banking is also gradually adopting them. For instance, the IDFC FIRST Bank mobile app features a fingerprint unlocking option. Voice recognition and iris scan are other emerging identification systems, with vein pattern authentication as another option. All these technologies add uniqueness to one’s login credentials. They are expected to eventually replace existing security measures like PINs, passwords, and tokens. 

According to a study, the global banking and financial services industry is expected to invest $8.9 billion in biometrics by 2026. The study noted that money laundering accounts for 2%-5% of the global GDP. Technologies like biometrics are expected to reduce fraud and create a more effective audit trail. Biometrics act as a more intuitive layer of security around your mobile banking application while making the app easier to use. 

Chatbots
 

Customer experience is at the forefront of digital-only banking, with the impetus given to customer retention, personalisation, and better data-gathering initiatives. Chatbots are emerging as the technology of choice in this regard. Chatbots are Artificial Intelligence (AI) enabled platforms that provide a data-driven conversational experience for customers. They tick several important boxes for banks. They can resolve customer queries promptly, act as a data-collating tool, and subsequently help the bank provide personalised customer solutions and experiences.

Banking services involve a large amount of human interaction, and chatbots are ending up as the first line of communication for them. With better query resolution achieved through AI, banks can expect to cut costs drastically. A Juniper Research study expects this cost-saving to be roughly $8 billion by the end of this year. 

Big data
 

While personalisation is seen as an emerging mobile banking trend, the technology behind it is largely driven by big data. When it comes to collecting customer data, the use of big data is seen as a giant leap from data collection through traditional and other digital sources. Services like spend analysis, financial advice, saving tips, reminders for recurring payments, etc., are streamlined with big data. A personalised environment can help banks to improve customer retention. The IDFC FIRST Bank mobile banking app, for instance, provides a smart view of your upcoming spends. You can verify your expenses and manage them efficiently with the IDFC FIRST Bank mobile app.

Another aspect of big data use is safety. Through the use of AI algorithms, banks can understand transaction patterns and the banking history of customers. Detection of suspicious activities would be easier, and remedial measures will be more prompt. The use of an ATM card at multiple locations in close succession, for example, can get red-flagged.

Touch-free ATM transactions
 

This is evolving as the natural progression of the screen-based QR code technology already used in retail businesses. In banking technology, it is more than a user experience enhancement. Your mobile banking app will interact with the ATM screen by scanning its QR code. Thereafter, you will be able to withdraw the amount from the ATM through your phone. You can also carry out other ATM functions like changing the PIN, transferring funds, making payments, and so on. The COVID-19 outbreak only made contactless transactions universally preferred. 

Companies working in the fields of digital payments and automation are developing this technology for subsequent adoption by banks. Apart from avoiding physical contact with the ATM, this technology expects cash withdrawal to be quicker. There will be a lesser possibility of your PIN getting compromised or your ATM card getting skimmed. To carry out a contactless cash withdrawal, you will have to open the mobile application and select the QR cash withdrawal option. Enter the desired amount and scan the QR code from the ATM screen. After confirming the scan, you may be prompted for the mobile banking PIN. The ATM will then dispense the entered cash amount.

Blockchain
 

Blockchain is in the news as the technology behind the likes of Bitcoin and Ethereum. However, its use in mobile banking (and banking in general) is widely anticipated. In digital banks, blockchain is expected to facilitate faster payments, settlement and clearances, loan processing, etc. The use of blockchain in mobile banking will simplify P2P transactions, improve digital ID authentication, and enable faster payments and fraud detection. Blockchain will ensure that mobile banking users enjoy easier sign-ups, round the clock access, real-time updates etc. 

Blockchain is decentralised architecture so that a system failure won’t lead to a network-wide failure. An algorithm drives its network governance, and information within it is encrypted. Recorded data can be easily tracked in a blockchain environment, which reduces the scope of fraud and data loss. All of these features give a security advantage to online banking when run on a blockchain architecture. 

Conclusion
 

Mobile banking has made accessibility to banks easier. A customer can now access various banking information round the clock and not wait for banking hours. The speed of banking activities has increased too. As a result, you can now open a fixed deposit through the IDFC FIRST Bank mobile app in just two clicks compared to traditional methods and longer turnaround. Recent trends in banking have also enhanced security. Banks are redefining their role in the financial system while transforming the banking system with these tech innovations. As a result, the number of things you can do on your mobile banking app is changing for the better. 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.