Innovation Trends in Banking

Technology has become a key driver for the financial sector, but not all trends have taken off. Younes Haffane highlights five trends that have strong potential to make a transformative impact on the sector

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Innovation Trends in Banking Haffane: Innovation in channels helps banks to differentiate their services.
By  Younes Haffane Published  July 17, 2014

There is no doubt that innovation is becoming one of the top priorities for businesses, no matter what their industry is. Financial services in particular are using IT as a driver for business growth, market differentiation and profitability. To do so efficiently, they must put the customer in the centre of their attention.

Indeed, financial institutions are increasing their focus on client needs, moving from product-centric models to customer-centric ones. This evolution dictates the need to provide services on their channels of preference. Further more, banks are learning from the customers with every interaction they undertake and the insight gathered is used to enhance their user experience in the future, regardless of the channel. Customers are expecting a uniformity of services in the digital and physical worlds and this is where a consistent omni-channel strategy takes all its relevance.

But, while channel innovation remains the primary and most visible driver of market differentiation, banks must also strive to uplift the quality of their processes and services.

The drivers for change and evolution don’t exclusively emanate from within the bank. There is an increasing competition from non-financial players and new fintech companies with serious advantages compared to well-established financial institutions.

If we are to analyse the evolution of these drivers and tendencies, we’ll realise that, while some have been confirmed in recent years such as mobility, cloud and analytics, others have struggled to become mainstream. The following five trends have a real potential to see an uptake in the banking landscape:

Personalisation

It is well established that the customer must be put at the centre of attention. The bank-client relationship must be personalised and tailored to each customer. Customer authentication is probably the first step to personalisation.

Historically, this has been piloted using contactless badges, tokens or even credit cards. In these trials, the customer would go into a branch and swipe their badge in front of a scanner to announce their arrival. Recently, more seamless identification means have emerged as solid alternatives like facial recognition. Thanks to advanced video analytics algorithms, it is possible to identify clients coming into the branch or standing in front of a teller with high accuracy rates.

On the other hand, relationship managers are the face of the financial institution and should be equipped with efficient tools or tablets to service their customers. These devices would include the relevant simulators, financial calculators and analytical engines, enabling them to provide a personalised experience to the client.

Finally, some banks are very successful in creating emotional ties to their brands. For instance, a US bank is allowing its clients to customise their debit cards with a photo of their choosing using an online design solution. Very straightforward yet quite powerful!

Identity

Biometrics provides the possibility to authenticate a customer in an efficient and secure way. In call centres, voice authentication can dramatically improve a customer experience over the phone by being instantly identified. This technology coupled with voice control can lead to some interesting use cases on the mobile. For example, a customer can use voice recognition to enable money transfer to another account or use his voice to authorise larger-value cash transactions via mobile phone.

On the other hand, vein technologies are witnessing a great momentum of adoption. Unlike fingerprints, palm veins and finger veins rely on blood vessel patterns which make them trackless and thus more secure.

Beyond the personal physical attributes, the use of behavioural biometrics and electronic signature in particular, is also under investigation by financial institutions. Despite the legal and regulatory constraints, some banks are exploring the use of alternatives such as digital pen and pads, touch screens and even simple mouse interactions, to capture and authenticate customer signatures.

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