What Are Some Technologies That Can Prove Beneficial For Retail Banking?
Financial institutions annually spend huge amounts running into billions of dollars a year on upgrading technology and undertaking system integration work. This is not a fad but an essential for their survival. But, in comparison to the newer banks and the capital market courses the technology of the new age is not only nimble and lightweight but is also more adaptable and faster than the older banks' legacy systems.
Some areas where technology definitely impacts the banking services can briefly be summarized as below.
A. Customer authentication: Imagine a dual-control process with multi-factor authentication taken care of in a bank. It is possible only when the technologies keep pace with the customer demands and is possible only with the application of the latest developments in big data analytics, AI and ML.
B. Data Security: Data is being generated by the fraction of a second and its sheer volumes are nowhere better known than in retail banking. Storage of data is another sector where banks need to tread carefully because of the increased KYC norms. Innovations in cybersecurity, cloud storage, and such areas are not only essential but mandatory for compliance or regulatory norms and to gain customer trust, loyalty and confidence. Such futuristic technologies suitable for retail banking can be learned in Capital Market Courses.
C. Legal and KYC requirements: With financial markets tightening the noose around fraudulent investors and borrowers the regulatory environment is much more stringent than ever before. The bank’s documentation, its process, and technology have all been under regular scrutiny in recent times. It would be impossible if not for Regtech innovators and technology stepping in to make it feasible.
D. Integration with legacy technology: Banks are big acquisition businesses and this means mergers of legacy technology of the two entities. When such legacy systems are to be transitioned to a newer uniform technological platform it involves huge costs. Technology can definitely help integrate the legacy systems at reduced costs and without changing the existing infrastructure.
The areas and developments that will see changes:
Citing a 2018 outlook report from SIFMA there are four trends that will definitely see benefits and change in retail banking. They are:
1. AI will aid and enhance the processes of decision-making and investments.
2. Automatic processing and AI will see a huge change.
3. Blockchains and capital market courses will lead to technological innovations to make retail banking and the capital markets more investor-friendly and efficient.
4. Data security and protection will increase in importance.
How do the banks benefit?
According to the experts, bankers, analysts, consultants, etc that spoke to The Financial Times, the top 5 areas that have the potential to be successfully transformed by blockchains are
Settlement and Clearing:
The bank network is a tangled network of securities, investments, and loans that need to be recorded, settled and cleared on a daily basis. And, this costs billions of dollars annually to run. Accenture says that this area of settlement and clearing could save investment banks up to USD 10bn if they use blockchain technology for efficient settlement and clearing operations.
Payments systems from the central banks globally are moving to explore blockchain technology and shifting payments system processes to blockchains and issue digital tokens that can be used on the stock markets and cashed in at the central banks. Commercial banks also have pushed forward with their own projects instead.
LCs, trade finance, bills of lading, etc are still paper-transactions sent through post or fax globally. According to the R3 MD, Charley Cooper, this is an obvious area where banks can benefit from blockchains.
Customer Identity Verification:
Lenders are in reality trusted custodians of investor's money and regulators will hold the banking agents responsible for authentication of records and checking the customer's identity. This area is a vital banking-risk that blockchain-processing can easily overcome. It is an era of start-ups in the KYC blockchain-enabled systems. Some of them are Blockstack, Cambridge Blockchain, Credits, and Tradle.
It takes a long 19 days for US companies to raise syndicated funds from banks. Early repayments and foreclosures are still done on paper. To address the efficiency of this area Credit Suisse and 19 similar-minded financial institutions formed a work-consortium with the blockchain enablers to put the syndicated loans Synaps on a blockchain framework.
Taking capital market courses at Imarticus Learning can help you learn and reskill on such futuristic technologies for retail banking. Hurry and enroll. For more detailed information regarding this and for further career counseling, you can also contact us through the Live Chat Support system or can even visit one of our training centers based in - Mumbai, Thane, Pune, Chennai, Banglore, Hyderabad, Delhi, Gurgaon, and Ahmedabad.