How FinTech Makes Traditional Banking a Better Place for Humans

Weaknesses of the current banking system

difficulties with international transfers and depositing cash into accounts;

transaction fees;

the need for a personal presence in the bank to perform certain operations;

lots of paperwork for opening a bank account;

Why users switch to applications

Money transfer apps vs. banks

Application of AI and machine learning

Checklist for banks

First, it’s about customer service and its enhancement through the development of machine learning and artificial intelligence technologies. Perhaps, now it is more convenient for many banks to hire an entire staff to form a call center and support online chats, but the future belongs to smart chatbots that will learn in the process of communication with customers.

Reduce the fees for cross-border transfers and the level of complexity of the client identification procedure. Otherwise, it will make a lot more people looking in the direction of mobile applications for transfers.

Despite the fact that some giants of the banking sector may not realize that the Age of Offline has passed, it makes perfect sense to develop mobile banking. So instead of investing in the opening of new branches, it is better to invest in mobile development.

Enter the blockchain. Sure enough, due to ICOs hype with its stream of fraudulent projects , opinions on the technology have changed. However, do not underestimate its ability to improve banking services. Blockchain has a huge potential for banking, where technology can be used to increase the security of financial transactions, decentralize services and increase the speed of market launch of new products. A blockchain can be used to securely store customer identities or process international payments. Analysts predict that 77% of FinTech companies will adopt the blockchain by 2020. Besides, according to a new study by the World Economic Forum (WEF), about 40 central banks around the world are considering the possibility of issuing their own digital currencies (CBDC). Some banks are already testing this opportunity. Among the most interesting prospects of CBDC is the deprivation of commercial banks of a monopoly on deposits and the transfer of alternatives to private payment solutions.

The rise of APIs. Open API models allow trusted partners to create new interface layers for customers and implement new fascinating products and services based on the platform for financial service providers. By the way, o pen banking was made official in the UK .

The development of p2p-loans by creating special marketplaces. Fair enough: the main business offering of banks is classic lending. However, with the development of the financial services market, it is worth thinking about something new, more customer-oriented.

Fintech startups. Despite the widespread theory that large companies have more opportunities for in-house development, it is sometimes easier to take a ready-made solution under the wing. The founders of a startup will really burn with their idea, and employees of the IT department of the bank will not be the fact that they share the enthusiasm for the introduction of innovations, especially if the initiative is imposed by top management. Of course, the banking sector is still far from ideal. But perhaps in the near future, we will see a collaboration of advanced application technologies for money transfer and banking system reliability.

Final Words