5 Digital Transaction Trends To Follow This Year
The last decade has resulted in the phenomenal evolution of digital transactions, with Fintech companies emerging as the early adopters. With artificial intelligence, blockchain and biometrics now coming into play, the digital transaction technologies have a new look. Robust, fool-proof and fast, capable of adapting to the ever-changing environment of the banking sector, digital transaction trends will continue to transform in the years to come. More than 60% of today’s banks focus on the development of new skills. They believe success hinges on these abilities; therefore, it’s necessary to leverage technology to live up to their customers’ expectations.
Financial institutons across the globe are rapidly adopting digital technologies. In 2018, five of these innovations will likely penetrate deep within the industry, resulting in minimal disruption for retail banking and a seamless payment mechanism.
Below are the five digital transaction trends for 2018:
1. Integration of project management and invoicing tools.
Financial institutions stress accuracy and speed to keep pace with the competition. Integrating project management and invoicing tools can help eliminate licensing fees and enable a single platform for all their project management needs. Most banks are using QuickBooks or alternativeinvoicing tools that enable them to be more efficient.
These tools allow for personalized invoices along with a logo. The format is clean and easy-to-access, allowing for faster processing of data. The invoices can be emailed to clients directly. The tools enable users to record estimates, track expenses and completed tasks within a project. Users can also use the tools to work directly in the cloud, making the documents shareable and accessible. The data remains encrypted within the system so sensitive information can be protected.
2. Embracing blockchain technology to enhance data management and security.
Online data thefts pose a severe threat to banks and other institutions across the globe. Blockchain technology is being widely-adopted as a means of keeping the data secure. It remains distributed within the decentralized digital ledger. Integrating blockchain technology strengthens security and enables more efficient management of data.
The primary hurdle in adopting blockchain technology is the banks’ need to educate its customers about its benefits. Most importantly, the transparency of the technology keeps the system free from corruption. Although blockchain is still in its infancy, it has come a long way since the inception of bitcoin. Embracing blockchain technology allows banks to reduce infrastructural costs by 30%.
Global financial institutions have begun integrating the technology into their systems, but they still have a long way to go. Large-scale incorporation of blockchain into digital transactions is likely in 2018.
3. Digital ID enhancement of transactions security.
Digital identification technologies have gotten a boost since biometrics-based solutions began creeping into the banking sector. Financial institutions are using voice recognition; facial recognition; and iris, vein and fingerprint scanners to authenticate customer details. These solutions are one of the most important strategies in mitigating fraudulent behaviour. Banks are keen on adding fresh security layers to their infrastructure and digital ID is a key weapon in neutralizing fraudulent behaviour.
Banks today strive to develop a ‘digital trust’ in their customers. A study shows that next generation authentication model expenditures will increase by 20% in 2018. Most users acknowledge a time crunch, as people opt for thumbprint payment through their smartphones. Remembering passwords is difficult when using multiple payment mechanisms; therefore, facial recognition and voice print use can be an effective solution to meeting customer demands. They simplify the payment process and significantly save time.
4. More effective AI in digital transactions.
Artificial intelligence and robotic process automation (RPA) will make a great impact in digital transactions, allowing banks to deliver customized services to their clients. By 2018, it’s likely that robots will be sold that can deliver $19.6 billion in professional services. AI-based banking systems will penetrate the market with great intensity in the months to come and repeated tasks can be automated using RPA; a key step towards banks’ digital transformation. The cost of these technologies will likely be optimized in 2018 with the financial institutions focused on their operational efficiency.
Incorporating AI makes operations cost effective and provides users with new benefits. 86% of today’s bank professionals believe AI provides them with a competitive advantage in business, beyond cost; however, executive managers need comprehensive knowledge about the operational mechanisms of the system.
5. More investment in digital transformation by banks.
Digitization of the business infrastructure remains the banking sector’s top priority, despite pathbreaking technologies coming into play. Certain technologies are ready and awaiting integration into business models by their first adopters. Banks in 2018 are likely to invest in digital transformation. A study carried out by HSBC reveals that 74% of banks focus on providing support to their customers in case technology goes wrong. As a result, they need to work on alternative remedies before incorporating new co-browsing technologies. They also need to collaborate with customers, educating them on their use of the new technologies in fulfilling their needs.
Banks and FinTech institutions are looking forward to developing an IT-based payment mechanism. Mobile banking has already made its mark in digital transaction with 70% of Gen-Z using mobile banking applications. Payment mechanisms will become more simplified in 2018 and digital laggards will lose out to the industry’s competition. Reach out to the established players within the industry and leverage your infrastructure. A user-friendly, fast and efficient digital transactions mechanism can streamline your business.
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