COVID-19 has changed nearly every aspect of our lives. We are gradually adopting the ‘new normal.’ For example, virtual meetings are replacing in-person meetings; people are shifting to digital shopping, and much more.
Let me tell you; these changes don’t exclude banking, either. The industry noticed a significant shift to digital banking during the pandemic. McKinsey’s recent report states that our country has advanced five years ahead in consumer and business digital adoption in only eight weeks.
Wells Fargo Securities analyst Mike Mayo told American Banker, “What we’re seeing is the greatest acceleration of digital banking in history.”
Fintech has been an integral part of digital banking. But what exactly is that?
Well, it’s a combination of the term “financial technology.” Fintech refers to the implementation of various technologies to offer financial services to customers without any hassles.
A World Bank report shows that the fintech market reports rapid growth during the pandemic.
However, the customer satisfaction level has been reduced due to digital banking.
A 2020 study by J.D Power revealed that overall customer satisfaction of the banks declined due to the transition from branches to online banking.
So, banks need to use fintech in a more customer-friendly way after the pandemic. In this way, the satisfaction levels of customers won’t be affected.
Virtual voice assistants
Traditional banking rarely provides customer service 24/7. But artificial intelligence virtual assistants can offer customer service round the clock.
Most virtual assistants help you with tasks like checking your account balance, paying bills, managing credit and debit cards, etc.
But what if the banks implement virtual voice assistants?
You might have used voice-activated devices like Siri or Google Assistant to play music, get directions, call someone, etc.
Banks also need to use virtual voice assistants for offering services. By doing so, you can save time that you would have spent typing and finding the solutions to your questions.
But very few banks have voice-enabled virtual assistants. For example, in the U.S. Bank Mobile App, you will find U.S. Bank Smart Assistant. You can use various commands for making transactions, like “What is the balance in my account” to know your balance.
Detailed view of your finances
Virtual assistants mostly help you carry out transactions and other banking-related tasks. But if you want to gain control over your finances, you need to know where your money is going. Based on that, you may need to change your spending habits.
So, banks should use fintech that helps the customers understand their spending habits. For example, take a look at Bank of America’s virtual financial assistant, Erica. Apart from standard banking services, it helps you to:
- Get a weekly snapshot of your month-to-date spending.
- Monitor recurring charges.
- Receive notifications of the changes in your credit score.
In short, you can get a clear picture of your financial life. It helps you manage your money in a better way.
Fraud detection
Digital banking is indeed more convenient. So, more and more people are adapting to it. But, unfortunately, because of this, fraud is on the rise, too.
Ryan Leblond, manager of fraud prevention and investigations for ESL Federal Credit Union in New York, says, “Fraudsters are getting much more advanced in their approaches.”
But thanks to artificial intelligence (AI) can help to protect sensitive data. AI follows a set of rules. Based on that, it reviews transactions and spending behaviors. If the AI detects any irregularities, it can send an alert to the customer.
Let’s say you usually make purchases of small amounts. But suddenly, your account shows a purchase of a huge amount. Of course, AI would flag it as a fraud and contact you right away.
So, banks need to use fintech to offer robust security, so their customers feel comfortable using digital banking.
Convenient payment methods
During the pandemic, a huge number of people shifted to online shopping. People who visit stores for shopping are increasingly using cashless and contactless payments through digital payment platforms.
So, banks should use fintech to upgrade all the physical debit and credit cards and implement the ‘tap to pay’ technology. By doing so, you can make contactless payments and save time as it’s faster than swiping or inserting your card.
Banks should also implement e-wallets due to their immense popularity and usage. Many e-commerce platforms and brands like Amazon and Starbucks are coming up with their e-wallets. These companies offer attractive cashback and reward points for using their e-wallets.
So, banks need to partner with various brands to attract more customers. Also, the customers will find it beneficial to use e-wallets instead of using cash.
Biometric ATMs
Banks are installing biometric sensors and iris scanners to provide ATM (Automated Teller Machine) services. So, you don’t need to carry your physical card or have to worry about remembering your pin.
The biometric-enabled ATMs use fingerprint sensors along with eyes and palms to check authenticity. But the problem is, fraudsters can create synthetic fingerprints or use fake irises to breach security.
But thanks to fintech, banks can use finger and palm vein readers to authenticate their customers.
The vein scanner illuminates your finger or palm with infrared light. Then your hemoglobin absorbs it to create a profile. Its liveness detection helps to detect whether or not the fingerprint is accurate.
Conclusion
The bottom line is, fintech has brought a revolutionary change in the finance industry. Banks should use it to offer a wide range of services to their customers. During the pandemic, fintech provides various tools to help even tech-shy customers who are gradually learning to use apps to manage their finances.
So, once we return to our normal lives, some of our habits, like contactless payments, online banking, etc., are likely to remain. Fintech will play an essential role and become commonplace even after the pandemic.
Image Credit: anete lusina; pexels; thank you!
Lyle David Solomon
Lyle David Solomon has considerable litigation experience as well as substantial hands-on knowledge and expertise in financial analysis and writing. Since 2003, he has been a member of the State Bar of California. In 1998, he graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, and now serves as a principal attorney for the Oak View Law Group in Los Altos, California.
