Preparing for the future of banking
While banks have made great strides in their use of technology, more changes are on the horizon that will reshape the way we manage our money and the resulting user experience.
Not so long ago, dealing with your bank was a very different process. Gone are the days of having to walk into a branch to hand over a check, transfer money with the help of a clerk, or have a long chat to open a savings account, giving way to a focused experience on the technology that has made banking so much faster and more convenient.
Technological advancements over the past 20 years have made life – and banking – easier for all of us in many ways. Telephone and online banking came first, followed by mobile banking, alongside the emergence of digital payment options and contactless payment technology. Digital advancements and improved support from call centers and chat services now make it largely redundant to visit a branch, with 24/7 access available across all channels.
While banks have made great strides in their use of technology, more changes are on the horizon that will reshape the way we manage our money and the resulting user experience. Modern banking is increasingly a technology business, and in the coming years the industry is moving towards the cloud.
The Covid-19 pandemic has accelerated the use of cloud technology across the economy, and banks are building capacity. The future of banking is upon us, and lenders must adapt quickly – not only to stay relevant but also to thrive – as consumer tastes change.
Bank customers are demanding a smoother, faster and more user-friendly experience. According to Adrian Toynton, Head of Banking Solutions, APAC at FIS Global, New Zealand banks “will take a more incremental approach to adopting new cloud-based technology to modernize their core platforms”, while trying to meet the customer expectations.
As New Zealand banks have started using cloud services for edge applications such as customer relationship management, they will start using the cloud for their core systems in the coming years as they look to become scalable. .
Legacy bank systems need to be upgraded to better meet future customer needs, says Toynton.
“Most traditional banks have legacy systems at their core, and while these have been built over decades and are excellent at what they do, they have minimal flexibility,” he adds. “They can’t support emerging trends and technologies that are here to stay, such as real-time processing, advanced data analytics, and hyper-personalization to improve customer experience.”
Toynton says banks need to make changes now to provide reliable service to future consumers, as customers become accustomed to rapid technological advances and continuous improvements in their digital banking tools.
“With more than 70% of banking interactions now digital, customers are looking for banks that provide services that seamlessly fit into their lives and habits, especially when it comes to mobile banking, contactless payments and customer service options.
“Against this backdrop, banks need to modernize their infrastructure to meet basic customer expectations for a seamless, always-on experience and to stay competitive with their peers and emerging financial providers,” he adds.
According to Toynton, banks that adopt the cloud have several benefits, including a better customer experience, improved reliability and stronger cyber defenses, the latter being a key factor as hackers continually attempt to disrupt the global banking system.
“The cloud is rapidly changing from a competitive advantage to the benchmark of a successful bank, and it has many benefits for customers. For example, the cloud enables real-time processing with AI and advanced data analytics , which improves fraud detection and management.”
He calls on banks to adopt cloud technology as soon as possible to keep their customers in check.
“Those who don’t start to modernize will be left behind,” says Toynton. “Sooner or later, banking systems must be exposed to a growing, increasingly mobile and real-time open financial ecosystem. As banks strive to become more efficient and customer-centric, an approach in real time is needed. Time is running out.”
FIS is a leading global fintech provider that proudly supports some of the world’s most trusted financial institutions with the innovative technology of their FIS Modern Banking Platform. Take a look at the latest FIS report to learn about the latest technologies powering big banks.