—TechRound does not recommend or endorse any financial, investment or gambling advice. All articles are purely informational—
FinTech has already changed the face of online banking for good. Online banking sites still provide core banking services, such as loans and deposits, but they come with special benefits, such as secure authentication.
Although modern FinTech only started to emerge between 2009 and 2014, digital banks have since increased massively in terms of customer base, market share, and asset size. The coronavirus pandemic sped things along even further and resulted in the number of licensed digital banks reaching 235 in 2023, a number that’s expected to grow in the coming years.
With such a huge number of competitors, digital banks must embrace new trends to stay relevant. The following seven trends are currently shaping the future of the digital banking industry.
Secure Authentication
With more consumers shopping and spending money online, authentication technology has advanced massively. Not only is this evident in the world of FinTech, but also in other areas. For example, two-factor authentication (2FA) and biometric data have not only become the norm for logging into your online financial account but also in other online platforms.
When logging into Facebook or X from an unknown device, the platform typically requests that you provide 2FA. Similarly, when completing an online payment using Apple Pay, you normally have to provide a face ID. This is no different from some online gambling sites, including those like Golden Panda, which strives to make deposits and withdrawals as easy and as safe as possible. To do this, they support robust cyber security features.
Clearly, comprehensive security authentication is essential for keeping your financial transactions safe. With extensive security measures in place, users get to enjoy complete privacy while controlling their personal data.
More advanced and impressive authentication methods will likely emerge in the near future. These will make FinTech activities more seamless than ever.
Environmental, Social and Governance Compliance
Environmental, social, and governance (ESG) compliance is a set of rules that are used to screen potential investments. As the name suggests, it prioritises environmental and social issues, as well as corporate governance.
Banks know that sustainable practices drive long-term profitability; it also helps them attract environmentally-conscious clientele. Banks are also making more of a conscious effort to employ a diverse workforce, consisting of people from all backgrounds. In terms of governance, banks are now expected to be more transparent with their practices to prove that they’re operating as environmentally friendly and ethically as possible.
With how big of an impact this trend can have on the banking sector, all digital banking providers now have current and future ESG regulations in mind. By showing that they have a good ESG strategy in place, digital banks can make themselves stand apart as the most inclusive and green choice on the market, which will earn them points with users.
Generative AI and Chatbots
The start of the 2020s brought many technological advancements, but very few have had as big of an impact as the release of ChatGPT 3.0. With it, the possibilities of generative artificial intelligence (AI) became realised for the first time.
While both traditional AI and generative AI are used in the FinTech sector, the focus has mostly been on the latter. Specifically, it helps organise and simplify complex processes, such as credit scoring and risk management, but it also positively impacts customer satisfaction.
With AI, digital banks can collect and process large amounts of data, and then use it to gain insights into customer behaviour. Based on this, banks can provide personalised product recommendations and services, and even predict future customer behaviour.
Due to generative AI, customer service is more accessible than ever, given that most businesses are moving in the direction of Chatbots. With a Chatbot, a business can process a large volume of inquiries that can come at any point of day or night. The best part is they can do all of that without using the energy of the human staff, freeing up their time for more important work.
Given this, it’s no wonder that more and more digital banks are harvesting the potential of generative AI and Chatbots. With it, they can provide personalised banking services without a lot of effort, so they should become a basic tool in every digital bank’s arsenal.
Open Banking
Unlike some other tech breakthroughs that happened quite recently, Open Banking isn’t a new concept. However, its ground-breaking benefits came into the spotlight just recently, which is why there’s been a growing number of banks that have since adopted it.
Open banking is basically the practice of securely sharing financial information with your main bank as well as other financial institutions of your choosing. These third parties can review your financial activities and make personalised lending solutions. Not only are more banks now offering this service, but more people are using it. In January 2024, active consumers using open banking grew to 1 in 7.
With Open Banking, it can be easier for banks and FinTech companies to work together, as they can access customer data through APIs. It also allows the entire financial sector to become one open-source place that’s oriented to customer needs.
—TechRound does not recommend or endorse any financial, investment or gambling advice. All articles are purely informational—
