In the past twenty years, banking has changed completely due to technological advancements and the demands of living in a digital-first world. Brick-and-mortar banks are getting adapted into the modern world, while online banking continues to grow in both influence and importance, changing the way we manage our money. Looking to the future, we will see a continuation of more trends and innovations that will forever change the way we bank online. In addition, these improvements will also make online banking feel more like an extension of our everyday lives.
1. Enhanced Security Measures
Certainly security has, and will continue to be, a large area of investment when it comes to online banks, especially since cybercrime is getting increasingly sophisticated. Future online bank portals are likely to incorporate more biometrics, like face and fingerprint scanning, to protect users’ account information. The principle of MFA will continue to grow, especially when it evolves to incorporate more dynamic challenges, such as behavioral biometrics, which assess the unique ways people interact with a device.
2. Artificial Intelligence and Machine Learning
Technologies such as Artificial Intelligence (AI) and Machine Learning (ML) will be instrumental in this change, helping banks to offer personalized services by enabling tailored financial advice and customized product interest to each client. AI-based chatbots and virtual assistants will evolve further and their solutions will swiftly answer some of the most common questions clients face. AI will also help prevent fraud by detecting non-standard behavior and reporting it virtually in real-time.
3. Blockchain and Cryptocurrencies
While blockchain and cryptocurrencies are the most visible use cases now, if the banking industry can offer seamless integration of digital currencies, the customer’s experience will change dramatically. Thanks to blockchain, which offers commitment and consensus without a trusted third party, transactions will be more secure than what currently exists in the industry. This technology will also revolutionize how books are kept, bringing about an unparalleled level of transparency. The use of cryptocurrencies has been volatile and is still too new to gain widespread acceptance from governments, but it’s slowly moving to the mainstream. One of the most important developments that will emerge is the integration of cryptocurrency wallets in online banking portals. Users will quickly be able to shift between traditional currencies and digital currencies.
4. Open Banking and APIs
Open banking is a movement that push banks to share their data with third-party developers who use Application Programming Interfaces – or APIs – to build new services and applications and improve the banking experience. Consumers stand to benefit from more integrated financial service offerings available through a single banking hub, which will make it easier to organize and control one’s money.
5. Increased Accessibility and Inclusion
With online banking becoming a reality, barriers to access will eventually be broken, raising participation across multiple segments who may have been excluded from using banking services or who may be disabled and less tech-savvy. Financial inclusion initiatives would also reach out to the underprivileged in unbanked, underserved regions to provide access to banking services through their mobile devices, helping them transition from the informal to the formal financial ecosystem.
6. Hyper-Personalization
As more prevalent, hyper-personalisation will become the new norm. Banks will use data analytics to learn more than ever before about customers’ financial habits and preferences. This will allow banks to provide highly tailored services and products, such as personalized savings plans, investment suggestions and spending insights. Customers will receive more proactive guidance from their banks based on their specific financial contexts.
7. Seamless Integration with Daily Life
I think online banking will be more and more included in users' everyday life and it will be easier for them to talk with their banks using some IoT devices like smartwatch, home assistant and others. For example, users can ask their smart devices these questions " what's my balance?" and "please transfer this amount to my mom", they will see the answers in the smart devices. Also, some users can get some tips about finance from the banks via the smart devices.
8. Sustainability and Ethical Banking
As consumers’ awareness of environmental and ethical concerns grows, so too will the shape and direction of online banking. Banks will become more environmentally friendly, offering green financial products. These products can take various forms as banks compete to be the industry’s ‘green leader’. This could involve everything from offering eco-friendly small-business loans to producing ethical investment products that back sustainable development. Meanwhile, another way of promoting bank ‘sustainability’ is through ethical banking. As a recent Forbes article highlights, ‘Ethical banking aims to be transparent and socially and environmentally responsible.’ To this end, banks would promote their position as leaders in ‘socially and environmentally responsible’ banking – both through promoting relevant products and marketing that portrays themself as a caring and concerned establishment with a genuine dedication to positively impacting people and the environment as a whole.
9. Advanced Data Analytics
As well, online banking will become more and more reliant on data analytics to produce information, to promote decision-making and to formulate business strategies. Big data will be managed and analyzed; customer travels, behaviors and financial risks will be carefully assessed to provide more competitive and relevant products. Predictable analytics and pattern recognition will be used to anticipate customer’s needs before they arise. The purpose of this technique is to correctly identify potential breaches before they happen.
10. Regulatory Changes and Compliance
Online banking regulations will also need to adapt quickly as technology evolves. Future regulation will focus on issues of consumer data privacy, competition and prevention of financial crimes. Banking institutions will have to continue investing in compliance systems capable of processing regulations to allow them to continue to rescue, innovate and grow with a joint effort from regulators and banks.
Conclusion
Our prognosis for the future of online banking: exciting, busy, challenging, and ultimately positive, as technology gets better faster and more progressive thinking takes root. Benefits of new applications of artificial intelligence (AI), distributed ledger technology (blockchain) and open banking will create a more frictionless banking experience for customers, but one that is also more secure, inclusive and sustainable. By seeing the signals emerging now, the path forward should be manageable for banks that want to remain relevant. We can foresee substantial innovation, but also huge rewards, for those that embrace the change and anticipate customer needs.
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