Read time - 02:39
It all started with the prolific use of smartphones, built upon by the increasing customers need for speed and convenience. It then spiralled into peer-to-peer banking and to some extent, eliminating the need for cash - epitomising a true modern way of banking. Experts say, however, that we are surprisingly not yet in the 'digital era of banking.'
They reckon what we see today is not necessarily digital banking but simply digitized banking: 'old financial products being adapted to the digital era and distributed via smartphones and the internet'. Nevertheless, the same cannot be said about the likes of Discovery Bank which describes itself as the 'world's first behavioural bank', a fully digital bank that anyone with a smartphone can join and Tyme Bank - which deems itself as SA's first digital-only bank. These digital only banks are definitely disrupting the banking industry.
Here are some trends shaping the banking industry as we know it:
Bankcards were designed in landscape because of the way old machine cards work, but we don't use ATM machines anymore or at least most of us and banks realised this hence the vertical card. Take for example how you hand over your card to a cashier, tap it to make Contactless payments or dip in into a point-of-sales machines you are likely holding the card vertically, right?
The same can be said about how we put our cards in our wallets and cell phone cardholders. Vertical cards are a growing trend among card issuers worldwide, who believe that the vertical orientation fits better with how we handle our cards these days.
You choose how you pay
Tech companies are now making it easier for their customers to make payments. Take Apple for example, they have made making a payment on Apple Pay as easy as sending a message. The same can be said about Samsung Pay, Google Pay, PayPal, Microsoft pay, WeChat pay et al.
Companies like Amazon, Uber and Starbucks are already starting to focus on prepay accounts that internalise payments by offering incentives to use their property app. So, will tech companies compete with banks in future? Probably. It's only a matter of time until they eliminate your bank altogether and give you a full-on service.
Imagine your bank letting you know if you are paying slightly more for utilities than your neighbour or if your rent repayments are seriously burdening you financially. Thanks to AI, this is possible. Banks will offer truer financial advice that you do not find irritating.
They will offer improved offer targeting which will lead to increased loyalty, improved profitability and increased engagement from customers. Moreover, as a customer, you will enjoy a better banking experience that saves you time and money.
Biometrics are methods of recognizing customers through their biological features like fingerprint, iris and voice recognition. It goes as far as finger vein patterns and heartbeat rate. At the moment, fingerprint is reigning supreme, followed by facial recognition - thanks to our devices.
Locally, FNB introduced an ATM that uses biometrics as a means of authentication. The TouchPoint on the ATM validates your identity by scanning your fingerprint, which is then verified with the Department of Home Affairs. Customers can also open new accounts using selfies - through biometric facial verification.
Most of us are frighten and feel like this technology is infringing on our privacy, but what's more secure between your password and finger vein pattern? Are fraudsters likely to forge your signature or heartbeat rate?
According to research, biometric authentications are more secure than traditional methods of authentication and will gain more traction in future.
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