The banking industry has been completely crossed over by technology.
There is no more room to “stay in line” but to “stay online”. Paperwork is dying worldwide with the eco-preservation initiatives and the speed demands.
How will the industry respond and evolve in the near future?
We asked the banking experts to enlighten us about what to expect for the next decade.
This is what they believe is coming up…
Jason J Hogg, Former President of American Express Serve & Bluebird Divisions & CEO of Revolution Money
“Explaining what a retail branch or bank teller was to a new born by the time she’s a teenager will be contained in the same conversation where you explain how you used to go to Blockbuster to rent a movie or Sam Goody to buy a CD. It’s called the “things that don’t exist anymore” conversation. Retail branches are already struggling to find their way in the consumer financial ecosystem with the onset of remote check capture, direct deposit, mobile transfers, prolific ATM’s and Docusign. The upcoming generations don’t want face-to-face interaction- I mean, come on, they text back and forth while sitting next to each other. The proliferation of AI based technologies will handle with aplomb the regulatory alphabet (KYC, AML, OFAC, etc.) required to remotely onboard a customer in a secure and compliant manner through online and mobile consumer interfaces. Blockchain based crypto currency tied to your bank account will eliminate the existence of checks and, when combined with point of sale capable mobile wallets, will also cannibalize cash usage. In short, having a relationship with your customer will change from shaking their hand, to handling their service needs in the lowest friction, fastest, form factor agnostic digital manner possible.”
Scott Ogle, CEO at Sageworks
“We’ve heard from our banking clients that, to really engage in small business loans, they need faster turnaround times and lower origination costs. So, banks will rely more on digital online solutions aka Commercial Loan Origination Systems. Essentially the beginning part of the loan process (sourcing the loan, application of the loan, receiving the loan and sending it to the credit department) will be handled from an online portal.
A digital commercial LOS is a combination of Online applications ( OLA) , Workflow, and Credit Analysis all at once. After a customer submits the application via OLA, we can immediately send it to credit analysis and/or Workflow, thus connecting the front office with the back office in essentially a couple button clicks. Small businesses and millennials much prefer want less paper work, faster turnaround times, and a quick answer to their credit applications.”
Dennis Gada, Global Client Partner & Sales Head for Financial Services at Infosys
“Banks are facing two primary technology-driven issues in 2017: big data and blockchain:
- Banks don’t have to be intimidated by big data if they know how to chop it down to size. Then that data becomes all the more manageable and potent to revving up business processes.
- One of the key challenges for all banks – no matter at what stage of their IT journey – is how to deal with the promise of big data against a backdrop of enormous and often ungainly legacy mainframes that a company might have a difficult time retiring.”
Robin Smith, Co-founder & CEO of WeGoLook
“As fintech continues disrupting traditional financial services practices, in the next 10-15 years banks will be operating fundamentally differently.
WeGoLook’s mobile app utilized by 30,000+ crowdsourced workers is an innovative technology displacing multiple vendors in the financial sector and delivering data on-demand to fit the clients needs through API integration. This increase in data availability allows for 67% faster turnaround times and a reduction in lag time waiting on a customer to get to the bank during business hours. In the end, what we have is a smarter and faster process, which is important, particularly when a loan rate guarantee is in place. I have also seen a shift in financial institutions going from brick and mortar to strictly digital with the efficiencies the WeGoLook platform can provide. Banks don’t have a choice but to embrace the use of technology and innovate.”
Ken Yager, President of Newpoint Advisors Corporation
“While digital banking may help with that from a cost perspective there are some elements of business support that we have to be careful about. The biggest risk for businesses is that they inevitably make mistakes. Some of them can be big and hurt the business. The question of survival does not come down to interest rates or even covenants, but rather relationships. If an individual banker can act as a strong advocate over time and be willing to lose some customers over it, long term they will gain more respect from the business community for consistency and partnership than any submission to ticker symbols. Banking is not a trading game – it is a long term process of building on consistent strong advice and support. 15 years from now, bankers should morph into more advisory work.”
G. Scott Paterson, Chairman & CEO of FutureVault
“FinTech is not always the enemy; in fact it can be the opposite if approached strategically. In order for technologies to take hold, new companies need to partner with established firms. Financial services firms are entrusted with the care and management of money, and that’s a very high barrier to entry, one that most FinTech companies have yet to overcome. At the same time, banks and financial institutions are not in the business of innovating and creating new technology solutions to improve record keeping or security. When financial service firms and FinTech companies work together, however, they can disrupt the industry for their mutual benefit. Financial technology can level the playing field for banks and credit unions, allowing those that embrace technology to grow and enter new markets, and use innovative digital offerings to expand beyond their traditional customer base.”
Drew P. Moffitt, Business Design Lead at Applico
“Over the next decade, a large portion of banking will become automated, specifically the analysts, with open source Python libraries and off-the-shelf SaaS modeling tools. This will be accelerated by the fact, as platform business model economics begin to disrupt the sector and put downward pressure on pricing, turnaround time, and transparency.”
Fred Schebesta, CEO & Co-founder of Finder.com
“At finder.com we compare international money transfers and forecast that the next 10-15 years will see the banking industry catch up to this age of instant gratification, and enable instantaneous money transfers. No longer will we have to wait days for money we’ve received or sent to clear, we’ll be able to move cash around freely and immediately.
In the wake of instant payment systems, cash, credit and debit cards will be done away with and all you’ll need to transfer money is a cell number. Purchases will be instant and consumers won’t even need to queue in store but simply select their purchases, make the payment through their smartphone and leave. We’re already seeing this kind of technology being tested by retailers. These systems will not only improve convenience but also security with the removal of cards also decreasing instances of fraud.”