We can only move as fast as our money does; thus the banking industry must lead the way into our next technologically driven age.
Similar to nearly every other market in the world, the banking industry is going through a period of great change thanks in large part to a burgeoning wave of technological advances. Artificial intelligence and machine learning are granting banks and other financial players the power to operate more efficiently and more profitably than possible using just human brain power, while the advent of blockchain has improved network security and data privacy in large measure.
Modern advances are not just changing the ways in which we’ve always worked, but the very nature of the work we do. Banks should already have and must increasingly develop systems that are built to cater to the needs and rapid pace of transactions that happen every day in markets around the globe.
We can only move as fast as our money does; thus the banking industry must lead the way into our next technologically driven age. This necessarily important fact must lead to banking operations relying more on data, driving more real-time insights, personalizing every different banking experience, and building intuitive and simple interfaces that people and companies can use to integrate that information into their everyday lives.
A revolution in the way banks operate will coincide with one in the ways our economy operates as a whole, and that disruption will result in both sides of the coin feeling each other out as we move forward. For example, one massive development we have seen in the past several years is the rise of the cashless economy. More and more transactions are being made by swiping a card, or, even more recently, swiping your phone. And with the rise of the digital economy have come a host of financial business practices that change the way we approach everyday purchases.
• Chip and pin authentication on debit cards provides better security on cashless transactions
• Third-party payment platforms such as AliPay and WeChat Pay are becoming more popular, as they combine easy-to-use payment features with personalized lifestyle functions
• Account-to-account payment services are currently spreading across Europe
But the prospect of going cashless will put extra pressure on banks to drive the change from the cash-based markets that have driven the world economy for so long. Developing solutions that not only ease the process of ushering in the new digital economy, but make it accessible to those who may not otherwise be able to participate, will help create new markets that are equal and fairly open while also promoting growth from many different sectors.
There are several issues that must be confronted though as we transition away from cash-based transactions. The first is that this chance will most likely be harmful to some groups of people, such as the elderly or rurally located, who don’t have as much access to online networks and still rely very strongly on cash. As well, we must determine whether cash will have any role in society, and then what should be done to phase it out. Grand-scale questions about what will happen should there be a large network outage for even the shortest amount of time or who will control these networks or the creation of money must be addressed, as clarity on these major issues is crucial for the success of the endeavor as a whole.
As banking changes with a futuristic vision in mind, our financial institutions must change with an eye towards both maximizing the benefit of the new technologies we’re creating while also ensuring that in the process of modernizing we don’t create classes of haves and have-nots in the financial world. Banks should view this new era as a challenge of their capabilities to adapt with new processes and new business models, but also as an opportunity to redefine what our financial systems will look like going forward. Keep long-term goals in mind and pair them with the essence of your company to forge a vision for your bank and our markets in 2020 and beyond.