Technological Innovations to Transform the Banking Sector

Banking CIO Outlook | Tuesday, November 23, 2021

Fremont, CA: Banks have always been early adopters of technology, and the pandemic has hastened the digital initiative even more. However, more technological blows to the banking sector are expected in 2021.

Predictions about the dissapearance of banks due to the increasing adoption of technology and substitute solutions have been greatly exaggerated. But one cannot deny that technology is taking over banking, but not for the worse and that it will not push it over the edge. Technology has enabled banks to generate additional revenue, cut expenses, and manage risk exposure more effectively. The pandemic hit the banking industry hard at a time when it was delaying the full-fledged deployment of technology in the routine working system. If there were any doubts about the importance of rapidly scaling digital transformation in banking, the lockdown dispelled them. Despite the fact that 2021 is primarily concerned with returning to normalcy, it has invited more technology to follow suit.

Let us look at some banking trends that will dominate the industry in 2021:

An Increase in Digital Regulation

The year 2020 laid the foundation for digital technology and its regulators. Digital financial services are clearly impacting banks, and they are forcing banks to rethink and restructure their approaches to becoming resilient, adopting new technologies, leveraging data, and constructing agile operating models due to security concerns. Henceforth, digital regulators will step in and overview the digital economy. They are expected to ensure a clean and trusted financial system by protecting end customers and facilitating market competition.

Reimaging of Business Models

The reason we go after technologies is to minimize human labor and utilize the sophistication it provides. The banking industry also induced people to do the same. Emerging banking business models like mobile apps for transactions and financial handling is stealing the banking sector. Now, the entire banking system is moved online, allowing consumers to access several critical services from anywhere worldwide. The new business model has allowed customers to interact with the products and services from the banks through mobile apps or websites.

Information Security to Become More Popular

When everything goes online and digital, it surmounts the trouble on security concerns. All the critical details, including sensitive information, especially financial data between banks and customers, are now on the cloud. Unfortunately, this opens the door to leaking pivotal information to cybercriminals even though the exchange usually takes place through a bank's backend system or via a third-party player. Henceforth, in 2021, cybersecurity and access management will take center stage to address the emerging security issues. It will ensure that the information is shared securely with verified customers. Besides, blockchain technology is also enabling a secure platform for data sharing.

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