IoT, Big Data and Blockchain are just some of the technologies changing retail banking. IoB looks at how these newer technologies are transforming how we exchange and save money.
Mobile retail banking
Almost all banks now claim to be ‘mobile-ready’, and some would even say they are ‘mobile-first’, with challenger banks like Mondo, Tandem and Starling reaping the benefits of banking entirely through a mobile application.
However, while Mondo and others are seen as the disruptors in this space for their user-friendly iPhone and Android apps, legacy banks are also looking to drive mobile app innovation.
For example, 30-year-old Cypriot bank Hellenic Bank has been widely praised for rolling out its highly-rated iPhone app within just six months.
The Internet of Things remains a niche concept in retail banking, and is arguably more widespread in insurance.
However, some partnerships have already been established in payments, such as MasterCard bringing payments to Samsung’s Internet-connected Family Hub refrigerator.
It is clear that this is just the start, with IoT quite possibly enabling payments from other devices in future too, such as the car.
Artificial intelligence has the potential to transform the in-branch experience for retail banking customers – and lessen the burden on existing staff.
In March this year, RBS announced it was running a two-month trial of an advanced human AI, with this system being rolled out to support branch employees.
Piloted among 1,200 staff who manage relationships with SMEs, ‘Luvo’ is able to understand questions and then filter through large amounts of information in a split second before responding with an answer.
If Luvo is unable to find the answer, and answer the customer’s query, it passes this request onto a member of staff who can solve the more complex problems.
UK’s Clydesdale and Yorkshire have also launched a digital service using artificial intelligence, and many other banks are looking at doing something similar in the coming months.
Bitcoin + Blockchain
Bitcoin and Blockchain have been hugely talked up for varying reasons; Cryptocurrency Bitcoin is seen as a seamless, real-time payment method, while Blockchain is the centralised ledger system enabling super secure peer-to-peer payments. Blockchain can allow banks to track payments from start to finish.
In 2014, Fidor Bank announced plans to launch the first specialised bank for cryptocurrencies, along with currency exchange Kraken.
Blockchain is apparently being trialled at as many as 40 banks worldwide – including Bank of Ireland for trade reporting. The technology is also being used in the energy and insurance sectors.
Biometrics is increasingly being used in banks to improve online accessibility, whilst also reducing fraud.
Through the use of fingerprint sensors, for example, passwords and PINs are often redundant, a move which significantly reduces the chances of cyber-criminals looking to hack into banking accounts.
MasterCard is reportedly preparing for the launch of a new contactless card with an embedded fingerprint sensor, creating a more secure transaction method, while HSBC is stepping up its security procedures with voice and touch recognition security services in the UK.
Barclays offered finger vein scanning for authentication of large transactions back in 2014, with building society Nationwide also trialling the technology.
Spanish bank CaixaBank created the first mobile banking app that could be accessed while driving, using voice control functionality.
Using Ford’s SYNC with AppLink system, drivers are able to check their account balance and transfer funds, as well as locating nearby branches and ATMs.
The launch of the Apple Watch saw the introduction of a plethora of banking apps, although it must be said that these have been less popular on Google’s Android platform.
There has also been, albeit limited, uptake of the Google Glass, with Caixa Bank having previously trialled a Google Glass application. This application allowed the user to get directions to, and contact details for, nearby branches.
Robotics isn’t solely confined to manufacturing production lines; indeed, when used in conjunction with AI, they can improve customer service.
This was the case at certain branches of Japan’s Bank of Tokyo Mitsubishi UFJ, where they have been using 58-centimetre-tall robots called ‘Nao’.
These robots answer basic customer service questions in 19 different languages and analyse customer facial expressions and behaviour.
Augmented reality (AR) is a growing trend, especially for wearables used in manufacturing and healthcare, but is starting to find its place in banking too.
For instance, last year, Australian bank Westpac announced the release of an augmented reality (AR) app for mobile devices.
The 3D imaging software provides visualisations of the customers balances and transaction history, as well as overlaying details on nearby Westpac branches.
Big data analytics
Big data analytics means banks are able to rely on artificial intelligence (AI) more than ever before.
In 2014, Swiss banking giant UBS entered into a commercial agreement with software vendor Sqreem, which crunches huge volumes of information about a client’s behaviour to offer them detailed, personalised information.
The Internet of Banking is the two-day conference for senior European banking executives seeking to find out what the future of their industry looks like – and how they can adapt.
Taking place in London this November and featuring high-level speakers from Atom, Barclays, Citi, Fidor, Hellenic, Mondo, RBS and many overs, the retail banking summit tackles everything from strategic change, business transformation and new and existing regulation (such as PSD2) to new technology developments like Blockchain, IoT and mobile payments. Click here for details.